UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2008 or oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	~~QUARTERLY REPORT PURSUANT TO~~ ~~SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

	~~For the quarterly period ended September 30, 2007~~

	or

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

For the Transition Period from to

Commission File No. 1-32525

AMERIPRISE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

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

551099 Ameriprise Financial Center, Minneapolis, Minnesota		55474
(Address of principal executive offices)		(Zip Code)

~~Registrant’s telephone number, including area code~~

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

~~(612) 671-3131~~

~~Not Applicable~~

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx

No x Noo

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

Large Accelerated Filer x		Accelerated Filer x ~~Accelerated Filer~~ o ~~Non-Accelerated Filer~~ o

Non-Accelerated Filer (Do not check if a smaller reporting company) o		Smaller reporting company o

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

Yeso

No o Nox

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

Class		Outstanding at ~~October 29, 2007~~ April 25, 2008
Common Stock (par value $.01 per share)		~~231,896,538~~222,152,272 shares

AMERIPRISE FINANCIAL, INC.

FORM 10-Q

INDEX

Part I.	Financial Information:

	Item 1.	Financial Statements

		Consolidated Statements of Income – Three months ended March 31, 2008 and ~~nine months ended September 30,~~ 2007 ~~and 2006~~	3

		Consolidated Balance Sheets – ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006~~2007	4

		Consolidated Statements of Cash Flows – ~~Nine~~Three months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~	5

		Consolidated Statements of Shareholders’ Equity – ~~Nine~~Three months ended ~~September 30,~~March 31, 2008 and 2007 ~~and 2006~~	7

		Notes to Consolidated Financial Statements	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1921

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4038

	Item 4.	Controls and Procedures	4038

~~PART~~Part II.	Other Information:

	Item 1.	Legal Proceedings	4139

	Item 1A.	Risk Factors	4139

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4139

	Item 6.	Exhibits	4139

	Signatures		4240

	Exhibit Index		E-1

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in millions, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2007		2006		2007		2006		2008		2007
Revenues
Management, financial advice and service fees	$	878	$	720	$	2,532	$	2,151
Management and financial advice fees									$	791	$	722
Distribution fees	352		300		1,111		926		433		418
Net investment income	552		542		1,555		1,638		460		532
Premiums	246		244		725		693		265		257
Other revenues	174		171		524		571		157		167
Total revenues	2,202		1,977		6,447		5,979		2,106		2,096
Banking and deposit interest expense									20		69
Total net revenues									2,086		2,027

Expenses
Compensation and benefits	855		756		2,602		2,261
Interest credited to account values	282		317		872		948
Distribution expenses									541		478
Interest credited to fixed accounts									178		217
Benefits, claims, losses and settlement expenses	383		233		832		685		407		251
Amortization of deferred acquisition costs	128		87		387		368		154		134
Interest and debt expense	29		32		93		83		26		29
Separation costs	60		87		208		238		—		85
Other expenses	248		248		775		802
General and administrative expense									585		617
Total expenses	1,985		1,760		5,769		5,385		1,891		1,811
Income before income tax provision	217		217		678		594
Pretax income									195		216
Income tax provision	19		43		119		134		4		51
Net income	$	198	$	174	$	559	$	460	$	191	$	165

Earnings per Common Share:
Earnings per common share
Basic	$	0.84	$	0.71	$	2.35	$	1.86	$	0.84	$	0.69
Diluted	0.83		0.71		2.32		1.85		$	0.82	$	0.68

Weighted average common shares outstanding:
Basic	235.4		244.5		237.8		247.6		228.4		240.7
Diluted	239.2		246.4		241.4		249.3		231.5		244.1

Cash dividends paid per common share	$	0.15	$	0.11	$	0.41	$	0.33	$	0.15	$	0.15

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

	September 30, 2007			December 31, 2006			March 31, 2008			December 31, 2007
	(unaudited)						(Unaudited)
Assets
Cash and cash equivalents	$	3,972		$	2,717		$	3,904		$	3,836
Investments	31,161			35,553			29,808			30,625
Separate account assets	62,371			53,848			58,442			61,974
Receivables	3,079			2,960			3,441			3,441
Deferred acquisition costs	4,502			4,499			4,549			4,503
Restricted and segregated cash	1,206			1,236			1,142			1,332
Other assets	3,563			3,359			3,616			3,519
Total assets	$	109,854		$	104,172		$	104,902		$	109,230

Liabilities and Shareholders’ Equity
Liabilities:
Future policy benefits and claims	$	28,051		$	30,033		$	27,164		$	27,446
Separate account liabilities	62,371			53,848			58,442			61,974
Customer deposits	6,029			6,707			6,307			6,201
Debt	2,197			2,225			2,018			2,018
Accounts payable and accrued expenses	1,688			1,788			836			1,187
Other liabilities	1,760			1,646			2,554			2,594
Total liabilities	102,096			96,247			97,321			101,420

Shareholders’ Equity:
Common shares ($.01 par value; shares authorized,1,250,000,000; shares issued, 255,684,444 and 252,909,389, respectively)	3			3
Common shares ($.01 par value; shares authorized,1,250,000,000; shares issued, 256,136,864 and 255,925,436, respectively)							3			3
Additional paid-in capital	4,593			4,353			4,637			4,630
Retained earnings	4,591			4,268			4,938			4,811
Treasury shares, at cost (23,267,227 and 11,517,958 shares, respectively)	(1,180		)	(490		)
Treasury shares, at cost (32,741,622 and 28,177,593 shares, respectively)							(1,710		)	(1,467		)
Accumulated other comprehensive loss, net of tax:
Net unrealized securities losses	(226		)	(187		)	(282		)	(168		)
Net unrealized derivatives losses	(5		)	(1		)	(6		)	(6		)
Foreign currency translation adjustment	(15		)	(18		)
Foreign currency translation adjustments							(25		)	(19		)
Defined benefit plans	(3		)	(3		)	26			26
Total accumulated other comprehensive loss	(249		)	(209		)	(287		)	(167		)
Total shareholders’ equity	7,758			7,925			7,581			7,810
Total liabilities and shareholders’ equity	$	109,854		$	104,172		$	104,902		$	109,230

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

	Nine Months Ended September 30,						Three Months Ended March 31,
	2007			2006			2008			2007
Cash Flows from Operating Activities
Net income	$	559		$	460		$	191		$	165
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Capitalization of deferred acquisition and sales inducement costs	(682		)	(647		)	(189		)	(228		)
Amortization of deferred acquisition and sales inducement costs	423			406			171			150
Depreciation and amortization	126			134			45			41
Deferred income taxes	48			16			(36		)	(42		)
Share-based compensation	110			83			37			35
Net realized investment gains	(28		)	(25		)	(8		)	(9		)
Other-than-temporary impairments and provision for loan losses	(21		)	2			32			—
Premium and discount amortization on Available-for-Sale and other securities	84			94			24			29
Changes in operating assets and liabilities:
Segregated cash	107			152			42			67
Trading securities and equity method investments in hedge funds, net	(10		)	145			81			(73		)
Future policy benefits and claims, net	281			(40		)	161			23
Receivables	(128		)	(286		)	(90		)	(91		)
Brokerage deposits							(42		)	(42		)
Accounts payable and accrued expenses	(114		)	188			(389		)	(213		)
Other, net	(20		)	34			157			78
Net cash provided by operating activities	735			716

Net cash provided by (used in) operating activities							187			(110		)
Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	3,021			2,125			92			828
Maturities, sinking fund payments and calls	2,139			2,552			983			699
Purchases	(982		)	(2,233		)	(584		)	(362		)
Open securities transactions payable and receivable, net	83			34
Proceeds from sales and maturities of commercial mortgage loans	410			381			61			116
Funding of commercial mortgage loans	(338		)	(308		)	(73		)	(51		)
Proceeds from sale of AMEX Assurance	115			—
Proceeds from sales of other investments	106			109			14			31
Purchase of other investments	(56		)	(116		)	(102		)	(12		)
Purchase of land, buildings, equipment and software	(238		)	(115		)	(44		)	(59		)
Proceeds from sale of land, buildings, equipment and other	8			66			—			8
Change in policy loans, net							(9		)	(4		)
Change in restricted cash	(82		)	(54		)	150			(6		)
Acquisition of bank deposits and loans, net	—			951
Other, net	(5		)	(2		)	(1		)	(10		)
Net cash provided by investing activities	4,181			3,390			487			1,178

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

(in millions)

	Nine Months Ended September 30,						Three Months Ended March 31,
	2007			2006			2008			2007
Cash Flows from Financing Activities
Investment certificates and banking time deposits:
Proceeds from additions	647			1,239			$	327		$	240
Interest credited to account values	152			153
Maturities, withdrawals and cash surrenders	(1,612		)	(2,431		)	(249		)	(401		)
Change in other customer deposits	135			(164		)
Change in other banking deposits							71			(21		)
Policyholder and contractholder account values:
Consideration received	795			980			350			222
Interest credited to account values	720			795
Net transfers from (to) separate accounts							14			(102		)
Surrenders and other benefits	(3,736		)	(3,620		)	(804		)	(991		)
Proceeds from issuance of debt, net of issuance costs	—			516
Principal repayments of debt	(28		)	(252		)
Dividends paid to shareholders	(98		)	(82		)	(34		)	(27		)
Repurchase of common shares	(690		)	(438		)	(277		)	(386		)
Exercise of stock options	30			11			6			16
Excess tax benefits from share-based compensation	40			24			3			13
Policy loans:
Repayments	85			71
Issuances	(115		)	(96		)
Other, net	2			2			(13		)	51
Net cash used in financing activities	(3,673		)	(3,292		)	(606		)	(1,386		)

Effect of exchange rate changes on cash	12			21			—			2
Net increase in cash and cash equivalents	1,255			835
Net increase (decrease) in cash and cash equivalents							68			(316		)
Cash and cash equivalents at beginning of period	2,717			2,474			3,836			2,760
Cash and cash equivalents at end of period	$	3,972		$	3,309		$	3,904		$	2,444

Supplemental Disclosures:
Interest paid	$	75		$	63
Income taxes paid	$	92		$	185
Interest paid on debt							$	—		$	4
Income taxes paid, net							30			19

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2008 AND 2007 ~~AND 2006~~

(in millions, except share ~~amounts)~~amounts)

	Number of Outstanding Shares		Common Shares		Additional Paid-In Capital		Retained Earnings			Treasury Shares				Accumulated Other Comprehensive Loss			Total			Number of Outstanding Shares		Common Shares		Additional Paid-In Capital			Retained Earnings			Treasury Shares			Accumulated Other Comprehensive Loss			Total

Balances at December 31, 2005	249,875,554		$	2	$	4,091	$	3,745		$		—		$	(151	)	$	7,687
Comprehensive income:
Net income	—		—		—		460			—				—			460
Change in net unrealized securities losses	—		—		—		—			—				(74		)	(74		)
Change in net unrealized derivative gains	—		—		—		—			—				(5		)	(5		)
Foreign currency translation adjustment	—		—		—		—			—				4			4
Total comprehensive income	—		—		—		—			—				—			385
Dividends paid to shareholders	—		—		—		(82		)	—				—			(82		)
Treasury shares	(10,335,108	)	—		—		—			(438			)	—			(438		)
Share-based compensation plans	2,572,936		1		200		—			—				—			201
Balances at September 30, 2006	242,113,382		$	3	$	4,291	$	4,123		$		(438	)	$	(226	)	$	7,753

Balances at December 31, 2006	241,391,431		$	3	$	4,353	$	4,268		$		(490	)	$	(209	)	$	7,925		241,391,431		$	3	$	4,353		$	4,268		$	(490	)	$	(209	)	$	7,925
Change in accounting principles	—		—		—		(138		)	—				—			(138		)	—		—		—			(138		)	—			—			(138		)
Comprehensive income:
Net income	—		—		—		559			—				—			559			—		—		—			165			—			—			165
Change in net unrealized securities losses	—		—		—		—			—				(39		)	(39		)	—		—		—			—			—			66			66
Change in net unrealized derivatives losses	—		—		—		—			—				(4		)	(4		)	—		—		—			—			—			(1		)	(1		)
Foreign currency translation adjustment	—		—		—		—			—				3			3			—		—		—			—			—			1			1
Total comprehensive income	—		—		—		—			—				—			519			—		—		—			—			—			—			231
Dividends paid to shareholders	—		—		—		(98		)	—				—			(98		)	—		—		—			(27		)	—			—			(27		)
Treasury shares	(11,749,269	)	—		—		—			(690			)	—			(690		)
Repurchase of common shares																				(6,339,537	)	—		—			—			(375		)	—			(375		)
Share-based compensation plans	2,775,055		—		186		—			—				—			186			1,527,548		—		64			—			—			—			64
Other, net	—		—		54		—			—				—			54			—		—		51			—			—			—			51
Balances at September 30, 2007	232,417,217		$	3	$	4,593	$	4,591		$	(1,180		)	$	(249	)	$	7,758
Balances at March 31, 2007																				236,579,442		$	3	$	4,468		$	4,268		$	(865	)	$	(143	)	$	7,731

Balances at December 31, 2007																				227,747,843		$	3	$	4,630		$	4,811		$	(1,467	)	$	(167	)	$	7,810
Change in accounting principle																				—		—		—			(30		)	—			—			(30		)
Comprehensive income:
Net income																				—		—		—			191			—			—			191
Change in net unrealized securities losses																				—		—		—			—			—			(114		)	(114		)
Foreign currency translation adjustment																				—		—		—			—			—			(6		)	(6		)
Total comprehensive income																				—		—		—			—			—			—			71
Dividends paid to shareholders																				—		—		—			(34		)	—			—			(34		)
Repurchase of common shares																				(5,675,599	)	—		—			—			(290		)	—			(290		)
Reissuance of treasury shares																				1,111,570		—		(47		)	—			47			—			—
Share-based compensation plans																				211,428		—		54			—			—			—			54
Balances at March 31, 2008																				223,395,242		$	3	$	4,637		$	4,938		$	(1,710	)	$	(287	)	$	7,581

See Notes to Consolidated Financial Statements.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.Basis of Presentation

The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc. (“Ameriprise Financial”), companies in which it directly or indirectly has a controlling financial interest, variable interest entities (“VIEs”) in which it is the primary beneficiary and certain limited partnerships for which it is the general partner (collectively, the “Company”). All material intercompany transactions and balances between or among Ameriprise Financial and its subsidiaries and affiliates have been eliminated in consolidation. Ameriprise Financial is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and services that are designed to offer solutions for clients’ asset accumulation, income management and insurance protection needs. The Company’s foreign operations in the United Kingdom are conducted through its subsidiary, Threadneedle Asset Management Holdings Limited (“Threadneedle”).

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications of prior period amounts have been made to conform to the current presentation. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature.

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

Reclassifications

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Changes to the Company’s reportable operating segments and certain reclassifications of prior year amounts, including new income statement captions, have been made to conform to the current presentation, and are described in Note 1, Note 2 and Note 26, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission (“SEC”) on February 29, 2008 (the “2007 10-K”). These reclassifications were made to enhance transparency and to better align the financial statement captions with the key drivers of the business. The Company did not change its revenue and expense recognition policies and the reclassifications did not result in any changes to consolidated net income or shareholders’ equity. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes ~~which are incorporated by reference~~ in the ~~Annual Report on Form 10-K~~Company’s 2007 10-K.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table shows the impact of ~~Ameriprise Financial, Inc. for~~ the ~~year ended December 31, 2006, filed with~~new captions and the ~~Securities and Exchange Commission (“SEC”) on February 27, 2007.~~reclassifications made to the Company’s previously reported Consolidated Statements of Income:

	Three Months Ended March 31, 2007
	Previously Reported		Reclassified
	(in millions)
Revenues
Management and financial advice fees	$	791	$	722
Distribution fees	344		418
Net investment income	518		532
Premiums	236		257
Other revenues	174		167
Total revenues	2,063		2,096
Banking and deposit interest expense	—		69
Total net revenues		2,063		2,027

Expenses
Compensation and benefits		842		—
Distribution expenses	—		478
Interest credited to fixed accounts	287		217
Benefits, claims, losses and settlement expenses	219		251
Amortization of deferred acquisition costs	134		134
Interest and debt expense	32		29
Separation costs	85		85
Other expenses	248		—
General and administrative expense	—		617
Total expenses	1,847		1,811
Pretax income	216		216
Income tax provision	51		51
Net income	$	165	$	165

2. Recent Accounting Pronouncements

In June 2007, the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (“SOP”) 07-1, “Clarification of the Scope of the Audit and Accounting Guide ‘Investment Companies’ and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”). SOP 07-1 provided clarification on the definition of an investment company. In October 2007,March 2008, the Financial Accounting Standards Board (“FASB”) indefinitely deferred the effective date of SOP 07-1 with the intention of re-deliberating the guidance provided. The Company will delay evaluating the impact of adopting SOP 07-1 until after the FASB finalizes its deliberations.

In May 2007, the FASB issued FASB Staff Position (“FSP”) FASB Interpretation No. (“FIN”) 46(R)-7, “Application of FIN 46(R) to Investment Companies” (“FSP 46(R)-7”). FSP 46(R)-7 is dependent upon clarification of the definition of an investment company as provided in SOP 07-1 and is effective upon the adoption of that SOP. The Company will delay evaluating the impact of adopting FSP 46(R)-7 until after the FASB finalizes its deliberations.

~~In February 2007, the FASB~~ issued Statement of Financial Accounting Standards (“SFAS”) No. ~~159, “The Fair Value Option for Financial Assets~~161 “Disclosures about Derivative Instruments and ~~Financial Liabilities – Including~~ Hedging Activities—an amendment of FASB Statement No. ~~115”~~133” (“SFAS ~~159”~~161”). SFAS ~~159 gives entities the option to measure certain financial instruments and other items at fair value that are not currently permitted to be measured at fair value. The objective of SFAS 159 is~~161 intends to improve financial reporting about derivative instruments and hedging activities by ~~providing entities with~~requiring enhanced disclosures about their impact on an entity’s financial position, financial performance, and cash flows. SFAS 161 requires disclosures regarding the ~~opportunity to mitigate volatility in reported earnings caused by measuring~~objectives for using derivative instruments, the fair values of derivative instruments and their related ~~assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 requires entities to report unrealized~~ gains and losses, ~~on items~~and the accounting for ~~which the fair value option has been elected in earnings at each subsequent reporting date.~~derivatives and related hedged items. SFAS ~~159 also establishes presentation and disclosure requirements. SFAS 159~~161 is effective ~~as of the~~for fiscal years and interim periods beginning ~~of an entity’s first fiscal year that begins~~ after November 15, ~~2007.~~2008, with early adoption permitted. The Company is currently evaluating ~~whether~~the impact of SFAS 161 on its disclosures. The Company’s adoption of SFAS 161 will not impact its consolidated results of operations and financial condition.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in an acquiree, and goodwill acquired. SFAS 141(R) also requires an acquirer to disclose information about the financial effects of a business combination. SFAS 141(R) is effective prospectively for business combinations with an acquisition date on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, with early adoption prohibited. The Company will apply the standard to any business combinations within the scope of SFAS 141(R) occurring after December 31, 2008.

In December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes the accounting and reporting for ownership interest in subsidiaries not ~~it will elect~~attributable, directly or indirectly, to ~~adopt~~a parent. SFAS ~~159~~160 requires that noncontrolling (minority) interests be classified as equity (instead of as a liability) within the consolidated balance sheet, and net income attributable to both the

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

parent and the noncontrolling interest be disclosed on the face of the consolidated statement of income. SFAS 160 is effective for ~~certain assets~~fiscal years beginning after December 15, 2008, and ~~liabilities.~~interim periods within those years with early adoption prohibited. The provisions of SFAS 160 are to be applied prospectively, except for the presentation and disclosure requirements which are to be applied retrospectively to all periods presented. The Company is currently evaluating the impact of SFAS 160 on its consolidated results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an Amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). As of December 31, 2006, the Company adopted the recognition provisions of SFAS 158 which require an entity to recognize the overfunded or underfunded status of an employer’s defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The Company’s adoption of this provision did not have a material effect on the consolidated results of operations and financial condition. Effective for fiscal years ending after December 15, 2008, SFAS 158 also requires an employer to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position. As of December 31, 2008, the Company will adopt the measurement provisions of SFAS 158 which the Company does not believe will have a material effect on its consolidated results of operations and financial condition.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~2. Recent Accounting Pronouncements (continued)~~

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”)~~, which~~. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, SFAS 157 does not require any new fair value measurements. ~~SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.~~ The provisions of SFAS 157 are required to be applied prospectively as of the beginning of the fiscal year in which SFAS 157 is initially applied, except for certain financial instruments as defined in SFAS 157 ~~which will~~that require retrospective application. Any retrospective application ~~of SFAS 157. The transition adjustment, if any,~~ will be recognized as a ~~cumulative-effect~~cumulative effect adjustment to the opening balance of retained earnings for the fiscal year of adoption. The Company adopted SFAS 157 effective January 1, 2008 and recorded a cumulative effect reduction to the opening balance of retained earnings of $30 million, net of deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) amortization and income taxes. This reduction to retained earnings was related to adjusting the fair value of certain derivatives the Company uses to hedge its exposure to market risk related to certain variable annuity riders. The Company initially recorded these derivatives in accordance with Emerging Issues Task Force (“EITF”) Issue No. 02-3 “Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities” (“EITF 02-3”). SFAS 157 nullifies the guidance in EITF 02-3 and requires these derivatives to be marked to the price the Company would receive to sell the derivatives to a market participant (an exit price). The adoption of SFAS 157 also resulted in adjustments to the fair value of the Company’s embedded derivative liabilities associated with certain variable annuity riders. Since there is ~~currently evaluating~~no market for these liabilities, the Company considered the assumptions participants in a hypothetical market would make to determine an exit price. As a result, the Company adjusted the valuation of these liabilities by updating certain policyholder assumptions, adding explicit margins to provide for profit, risk, and expenses, and adjusting the rate used to discount expected cash flows to reflect a current market estimate of the Company’s risk of nonperformance specific to these liabilities. These adjustments resulted in an adoption impact of a $4 million increase in the current quarter’s earnings, net of DAC and DSIC amortization and income taxes, at January 1, 2008. The nonperformance risk component of the adjustment is specific to the risk of RiverSource Life Insurance Company (“RiverSource Life”) and RiverSource Life Insurance Co. of New York not fulfilling these liabilities. As the Company’s estimate of this credit spread widens or tightens, the liability will decrease or increase. If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to net income would be approximately $26 million, net of DAC and DSIC amortization and income taxes based on March 31, 2008 credit spreads.

In accordance with FSP FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”), the Company will defer the adoption of SFAS 157 until January 1, 2009 for all nonfinancial assets and nonfinancial liabilities, except for those that are recognized or disclosed at fair value in the financial statements on a recurring basis. In January 2008, the FASB published for comment Proposed FSP FAS 157-c “Measuring Liabilities under FASB Statement No. 157” (“FSP 157-c”). FSP 157-c would amend SFAS 157 to clarify the accounting principles on the fair value measurement of liabilities. The Company is monitoring the impact ~~of adopting SFAS 157~~that this proposed FSP could have on its consolidated results of operations and financial ~~condition.~~condition. See Note 5 for additional information regarding the Company’s adoption of SFAS 157.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

and transition. The Company adopted FIN 48 as of January 1, 2007 and recorded as a cumulative change in accounting principle resulting in an increase in the liability for unrecognized tax benefits and a decrease in beginning retained earnings of $4 million.

In ~~February 2006,~~the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments” (“SFAS 155”). SFAS 155 amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) and SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (“SFAS 140”). SFAS 155: (i) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; (ii) clarifies which interest-only and principal-only strips are not subject to the requirements of SFAS 133; (iii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (iv) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (v) amends SFAS 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. The Company adopted SFAS 155 as of January 1, 2007. The effect of adopting SFAS 155 was not material.

In September 2005, the AICPA issued ~~SOP~~Statement of Position (“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 clarifying guidance on accounting for ~~deferred acquisition costs (“DAC”)~~DAC associated with an insurance or annuity contract that is significantly modified or is internally replaced with another contract. Prior to adoption, the Company accounted for many of these transactions as contract continuations and continued amortizing existing DAC against revenue ~~from~~for the new or modified contract. Effective on January 1, 2007, the Company adopted SOP 05-1 resulting in these transactions being prospectively accounted for as contract terminations. Consistent with this, the Company now anticipates these transactions in establishing amortization periods and other valuation assumptions. As a result of adopting SOP 05-1, the Company recorded as a cumulative change in accounting principle ~~a pretax charge of~~ $206 million, reducing DAC by $204 million, ~~deferred sales inducement costs (“DSIC”)~~DSIC by $11 million and liabilities for future policy benefits by $9 million. The after-tax decrease to retained earnings for these changes was $134 million. ~~The adoption of SOP 05-1, among other things, has resulted in an increase to DAC and DSIC amortization in 2007.~~

3. Separation and Distribution from American Express

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 Ameriprise Financial (the “Separation”) through a tax-free distribution to American Express shareholders. 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”).

American Express ~~has~~ historically provided a variety of corporate and other support services for the Company, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal ~~procurement~~ and other services. Following the Distribution, American Express provided the Company with many of these services pursuant to transition services agreements for transition periods of up to two years or more, if extended by mutual agreement of the Company and American Express. ~~As of September 30, 2007, the~~The Company ~~has~~ terminated all of these service agreements and ~~has~~ completed ~~the~~its separation from American ~~Express.~~

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~3. Separation and Distribution from American~~ Express ~~(continued)~~in 2007.

The Company ~~has~~ incurred significant non-recurring separation costs in 2007 as a result of the Separation. These costs ~~have~~were primarily ~~been~~ associated with establishing the Ameriprise Financial brand, separating and reestablishing the Company’s technology platforms and advisor and employee retention programs.

~~As of September 30, 2005,~~ we ~~entered into an agreement to sell the~~ ~~AMEX Assurance Company~~ ~~(“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. The sale was completed on September 30, 2007 for a sale price of $115 million.~~

4. Investments

The following is a summary of investments:

	September 30, 2007		December 31, 2006		March 31, 2008		December 31, 2007
	(in millions)				(in millions)
Available-for-Sale securities, at fair value	$	26,564	$	30,880	$	25,186	$	25,931
Commercial mortgage loans, net	3,007		3,056		3,109		3,097
Trading securities, at fair value, and equity method investments in hedge funds	596		579		428		504
Policy loans	683		652		713		706
Other investments	311		386		372		387
Total	$	31,161	$	35,553	$	29,808	$	30,625

~~Realized~~Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2007			2006			2007			2006			2008			2007
	(in millions)												(in millions)
Gross realized gains from sales	$	16		$	15		$	50		$	38		$	10		$	16
Gross realized losses from sales	(1		)	—			(22		)	(13		)	(2		)	(7		)
Other-than-temporary impairments	—			(1		)	(2		)	(2		)	(32		)	—

InThe $32 million of other-than-temporary impairments for the ~~third quarter of 2007, the Company recorded a $23 million decrease~~three months ended March 31, 2008 primarily related to ~~the allowance for loan losses on commercial mortgage loans.~~three Alt-A mortgage-backed securities.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5. ~~Deferred Acquisition Costs~~Fair Values of Assets and Liabilities

Effective January 1, ~~2007,~~2008, the Company adopted ~~SOP 05-1. SOP 05-1 provides clarifying guidance~~SFAS 157, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is exchanged in an orderly transaction; it is not a forced liquidation or distressed sale.

Valuation Hierarchy

Under SFAS 157, the Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on ~~accounting~~the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

Level 1		Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
Level 2		Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3		Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Determination of Fair Value

The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Assets

Cash Equivalents

Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value (“NAV”) and classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and are measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Investments (Trading Securities and Available-for-Sale Securities)

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are measured using independent pricing models from nationally-recognized pricing services, broker quotes, or other model-based valuation techniques such as the present value of cash flows. Level 1 securities include U.S. Treasuries and seed money in funds traded in active markets. Level 2 securities include: agency mortgage-backed securities; certain non-agency mortgage-backed securities, asset-backed securities, municipal and corporate bonds; certain U.S. and foreign government and agency securities; and seed money and other investments in certain hedge funds. Level 3 securities include certain non-agency mortgage-backed securities, asset-backed securities, and corporate bonds.

Separate Account Assets

The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV represents the exit price for ~~DAC~~the separate account. Level 1 measurements are assigned to active funds and Level 2 measurements are assigned to those funds that are considered less active.

Derivatives

Derivatives that are measured using quoted prices in active markets, such as foreign exchange forwards, or derivatives that are exchanged-traded are classified as Level 1 measurements. The fair values of derivatives that are traded in less active over-the-counter markets are generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include interest rate

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

swaps and options. Derivatives that are valued using pricing models that have significant unobservable inputs are classified as Level 3 measurements. Structured derivatives that are used by the Company to hedge its exposure to market risk related to certain variable annuity riders are classified as Level 3.

Consolidated Property Funds

The Company records the fair value of the properties held by its consolidated property funds within other assets. The fair value of these assets is determined using discounted cash flows and market comparables. Given the significance of the unobservable inputs to these measurements, the assets are classified as Level 3.

Liabilities

Embedded Derivatives

Variable Annuity Riders – Guaranteed Minimum Accumulation Benefit and Guaranteed Minimum Withdrawal Benefit

The Company values the embedded derivative liability attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value by discounting expected cash flows from benefits plus margins for profit, risk, and expenses less embedded derivative fees. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to policyholder behavior assumptions and margins for risk, profit and expenses that the Company believes an exit market participant would expect. The fair value of these embedded derivatives also reflects a current estimate of the Company’s nonperformance risk specific to these liabilities. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivative liability attributable to these provisions is recorded in future policy benefits and claims.

Equity Indexed Annuities and Stock Market Certificates

The Company uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with ~~an insurance or annuity contract that is significantly modified or internally replaced with another contract. Prior~~the provisions of its equity indexed annuities and stock market certificates. The inputs to ~~adoption, the Company accounted for many of~~ these transactions as contract continuations and continued amortization of existing DAC against revenue from the new or modified contract. The Company’s adoption of SOP 05-1 resulted in these transactions being prospectively accounted for as contract terminations.calculations are primarily market observable. As a result, these measurements are classified as Level 2. The embedded derivative liability attributable to the provisions of ~~adopting SOP 05-1,~~ the ~~Company~~Company’s equity indexed annuities and stock market certificates is recorded asin future policy benefits and claims and customer deposits, respectively.

The following table presents the balances of assets and liabilities measured at fair value on a ~~cumulative change~~recurring basis:

	March 31, 2008
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	210	$	3,158	$	—	$	3,368
Trading securities	218		158		43		419
Available-for-Sale securities	74		22,384		2,728		25,186
Separate account assets	3,577		54,865		—		58,442
Other assets	4		83		678		765
Total assets at fair value	$	4,083	$	80,648	$	3,449	$	88,180

Liabilities
Future policy benefits and claims	$	—	$	37	$	295	$	332
Customer deposits	—		13		—		13
Other liabilities	—		57		—		57
Total liabilities at fair value	$	—	$	107	$	295	$	402

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table provides a summary of changes in ~~accounting principle~~Level 3 assets and liabilities measured at fair value on a ~~pretax reduction~~recurring basis:

	Three Months Ended March 31, 2008
	Trading Securities			Available- for-Sale Securities			Other Assets			Future Policy Benefits and Claims
	(in millions)
Balance, January 1	$	44		$	2,908		$	629		$	(158	)
Total gains (losses) included in:
Net income	(1		)(1)	(29		)(1)	43		(2)	(124		)(3)
Other comprehensive income	—			(178		)	—			—
Purchases, sales, issuances and settlements, net	—			27			6			(13		)
Transfers in (out)	—			—			—			—
Balance, March 31	$	43		$	2,728		$	678		$	(295	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31	$	(1	)(1)	$	(31	)(1)	$	43	(2)	$	(124	)(3)

(1) Included in net investment income in the Consolidated Statements of ~~$204 million.~~Income.

(2) Represents a $52 million gain included in net investment income and a $9 million loss included in other revenues in the Consolidated Statements of Income.

(3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

During the reporting period, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

6. Deferred Acquisition Costs

The balances of and changes in DAC were as follows:

2007

2006

(in millions)

Balance at January 1

$
4,499

$
4,182

Cumulative effect of SOP 05-1 adoption

(204
)
—

Capitalization of acquisition costs

585

554

Amortization, excluding impact of changes in assumptions

(383
)
(384
)
Amortization, impact of annual third quarter changes in DAC-related assumptions

(16
)
38

Amortization, impact of other quarter changes in DAC-related assumptions

12

(22
)
Impact of change in net unrealized securities losses

9

55

Balance at September 30

$
4,502

$
4,423

	2008			2007
	(in millions)
Balance at January 1	$	4,503		$	4,499
Cumulative effect of accounting change	36			(204		)
Capitalization of acquisition costs	165			196
Amortization	(154		)	(134		)
Impact of change in net unrealized securities gains and losses	(1		)	(20		)
Balance at March 31	$	4,549		$	4,337

10Effective January 1, 2008, the Company adopted SFAS 157 and recorded as a cumulative change in accounting principle a pretax increase to DAC of $36 million. See Note 2 and Note 5 for additional information regarding SFAS 157.

Effective January 1, 2007, the Company adopted SOP 05-1 and recorded as a cumulative change in accounting principle a pretax reduction to DAC of $204 million.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

6.7. Future Policy Benefits and Claims and Separate Account Liabilities

Future policy benefits and claims consisted of the following:

	September 30, 2007		December 31, 2006			March 31, 2008		December 31, 2007
	(in millions)					(in millions)
Fixed annuities	$	14,968	$	16,841		$	13,929	$	14,382
Equity indexed annuities accumulated host values	255		267			249		253
Equity indexed annuities embedded derivatives	60		50
Equity indexed annuities embedded derivative						37		53
Variable annuities fixed sub-accounts	5,542		5,975			5,389		5,419
Guaranteed minimum withdrawal benefits variable annuity guarantees	76		(12		)	215		136
Guaranteed minimum accumulation benefits variable annuity guarantees	12		(5		)	83		33
Other variable annuity guarantees	27		31			26		27
Total annuities	20,940		23,147			19,928		20,303
Variable universal life (“VUL”)/universal life insurance	2,565		2,562
Other life, disability income and long-term care insurance	4,041		3,852
Auto and home insurance	400		381
Variable universal life (“VUL”)/universal life (“UL”) insurance						2,575		2,568
Other life, disability income and long term care insurance						4,173		4,106
Auto, home and other insurance						390		378
Policy claims and other policyholders’ funds	105		91			98		91
Total	$	28,051	$	30,033		$	27,164	$	27,446

Separate account liabilities consisted of the following:

	September 30, 2007		December 31, 2006		March 31, 2008		December 31, 2007
	(in millions)				(in millions)
Variable annuity variable sub-accounts	$	51,587	$	43,515	$	49,056	$	51,764
VUL insurance variable sub-accounts	6,446		5,772		5,752		6,244
Other insurance variable sub-accounts					57		62
Threadneedle investment liabilities	4,338		4,561		3,577		3,904
Total	$	62,371	$	53,848	$	58,442	$	61,974

7.8. Customer Deposits

Customer deposits consisted of the following:

September 30,
2007

December 31,
2006

(in millions)

Fixed rate certificates

$
2,745

$
3,540

Stock market based certificates

1,038

1,041

Stock market embedded derivative reserves

46

48

Other

80

91

Less: accrued interest classified in other liabilities

(37
)
(42
)
Total investment certificate reserves

3,872

4,678

Brokerage deposits

1,101

1,176

Banking deposits

1,056

853

Total

$
6,029

$
6,707

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~8. Debt~~

~~Debt and the stated interest rates were as follows:~~

September 30,
2007

December 31,
2006

Outstanding
Balance

Stated
Interest Rate

Outstanding
Balance

Stated
Interest Rate

(in millions)

(in millions)

Senior notes due 2010

$
800

5.4
%
$
800

5.4
%
Senior notes due 2015

700

5.7

700

5.7

Junior subordinated notes due 2066

500

7.5

500

7.5

Fixed and floating rate notes due 2011:

Floating rate senior notes

56

5.9

84

5.9

Fixed rate notes

86

8.6

86

8.6

Fixed rate senior notes

46

7.2

46

7.2

Fixed rate notes

9

13.3

9

13.3

Total

$
2,197

$
2,225

On November 23, 2005, the Company issued $1.5 billion of unsecured senior notes (“senior notes”) including $800 million of five-year senior notes, which mature November 15, 2010, and $700 million of 10-year senior notes, which mature November 15, 2015, and incurred debt issuance costs of $7 million. Interest payments are due semi-annually on May 15 and November 15.

In June 2005, the Company entered into interest rate swap agreements totaling $1.5 billion, which qualified as cash flow hedges related to planned debt offerings. The Company terminated the swap agreements in November 2005 when the senior notes were issued. The related gain on the swap agreements of $71 million was recorded to accumulated other comprehensive income and is being amortized as a reduction to interest expense over the period in which the hedged cash flows are expected to occur. Considering the impact of the hedge credits, the effective interest rates on the senior notes due 2010 and 2015 are 4.8% and 5.2%, respectively.

On May 26, 2006, the Company issued $500 million of unsecured junior subordinated notes (“junior notes”), which mature June 1, 2066, and incurred debt issuance costs of $6 million. For the initial 10-year period, the junior notes carry a fixed interest rate of 7.5% payable semi-annually in arrears on June 1 and December 1. From June 1, 2016 until the maturity date, interest on the junior notes will accrue at an annual rate equal to the three-month LIBOR plus a margin equal to 290.5 basis points, payable quarterly in arrears.

The fixed and floating rate notes due 2011 are non-recourse debt of a collateralized debt obligation (“CDO”). The debt will be extinguished 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. The related interest expense on these notes is reflected in net investment income.

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. As of September 30, 2007 and December 31, 2006, no borrowings were outstanding under this facility. Outstanding letters of credit issued against this facility were $6 million and $5 million as of September 30, 2007 and December 31, 2006, respectively. 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 September 30, 2007 and December 31, 2006.

	March 31, 2008			December 31, 2007
	(in millions)
Fixed rate certificates	$	2,698		$	2,616
Stock market based certificates	1,032			1,031
Stock market embedded derivative reserve	13			32
Other	75			78
Less: accrued interest classified in other liabilities	(4		)	(23		)
Total investment certificate reserves	3,814			3,734
Brokerage deposits	1,058			1,100
Banking deposits	1,435			1,367
Total	$	6,307		$	6,201

9. Share-Based Compensation

The Company’s share-based compensation plans consist of the amended and restated Ameriprise Financial 2005 Incentive Compensation Plan (the “2005 ICP”) and the Deferred Equity Program for Independent Financial ~~Advisors.~~

Advisors (“P2 Deferral Plan”). The ~~Ameriprise Financial~~ 2005 ~~Incentive Compensation Plan (“2005 ICP”) as~~ICP, which was amended and ~~restated effective as of~~approved by shareholders on April 25, 2007, ~~allows~~provides for the grant of ~~stock~~cash and ~~cash~~equity incentive awards to directors, employees ~~directors~~ and independent contractors, including stock options, ~~stock appreciation rights,~~ restricted stock awards, restricted stock units, stock appreciation rights, performance shares and similar awards designed to comply with the applicable federal regulations and laws of jurisdiction.

The ~~Deferred Equity Program for Independent Financial Advisors (“~~P2 Deferral ~~Plan”) adopted as of September 30, 2005,~~Plan gives certain advisors the option to defer a portion of their commissions in the form of share-based awards, which are subject to forfeiture based on future service requirements. The Company provides a match of the share-based awards.

1215

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

~~9. Share-Based Compensation (continued)~~

For the three months ~~and nine months~~ ended ~~September 30,~~March 31, 2008 and 2007, the Company recognized expense of ~~$35~~$37 million and $110 million, respectively, related to awards under these share-based compensation plans. For the three months and nine months ended September 30, 2006, the Company recognized expense of $27 million and $83$35 million, respectively, related to awards under these share-based compensation plans.

As of ~~September 30, 2007,~~March 31, 2008, there was ~~$199~~$235 million of total unrecognized compensation cost related to non-vested awards under the Company’s share-based compensation plans. That cost is expected to be recognized over a weighted-average period of ~~2.5~~2.3 years.

10. ~~Other Expenses~~

~~Other expenses consisted of the following:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

2007

2006

2007

2006

(in millions)

Professional and consultant fees

$
123

$
84

$
328

$
260

Information technology and communications

45

40

109

141

Facilities and equipment

41

47

131

141

Advertising and promotion

24

22

76

84

Legal and regulatory

16

27

64

98

Travel and meetings

23

22

74

61

Printing and distribution

20

23

75

74

Minority interest

(3
)
35

24

63

Other

41

27

149

112

Other expenses capitalized as DAC

(82
)
(79
)
(255
)
(232
)
Total

$
248

$
248

$
775

$
802

~~11.~~ Income Taxes

The Company’s effective tax rates were 8.8% and 17.6% for the three months and nine months ended September 30, 2007, respectively. The Company’s effective tax rates for the three months and nine months ended September 30, 2006 were 19.8% and 22.6%, respectively. The effectiveincome tax rate decreased to 2.1% for the three months ended September 30, 2007 was impacted by a $21 million tax benefit related to our plan to begin repatriating earnings of certain Threadneedle entities through dividends and a $7 million tax benefit related to the finalization of the prior year tax return. ~~The effective tax rate~~March 31, 2008 from 23.6% for the three months ended ~~September 30, 2006 was impacted by a $13~~March 31, 2007 primarily due to $38 million of tax ~~benefit~~benefits related to changes in the ~~finalization~~status of current audits and closed audits and the ~~prior year tax return. The effective tax rates are also impacted by the levels~~level of ~~pretax income relative to~~ tax advantaged items ~~including the dividends received deduction, in each period.~~relative to pretax income.

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 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. ~~Additionally, the Company has $45 million in capital loss carryforwards that expire December 31, 2009 as a result of the 2005 first short period tax return filed with American Express.~~ 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 ~~was~~has been established as of ~~September 30, 2007~~March 31, 2008 and December 31, ~~2006.~~2007.

~~Effective January 1,~~As of March 31, 2008 and December 31, 2007, the Company ~~adopted the provisions of FIN 48. As a result of the implementation of FIN 48 the Company recognized a $4~~had $137 million ~~increase in the liability for unrecognized tax benefits, which was accounted for as a reduction to the January 1, 2007 balance of retained earnings. As of the date of adoption the Company had $113~~and $164 million, respectively, of gross unrecognized tax benefits. If recognized, approximately ~~$57~~$35 million and $84 million, net of federal tax benefits, of the unrecognized tax benefits as of March 31, 2008 and December 31, 2007, respectively, would affect the effective tax rate. As of September 30, 2007, the Company had $109 million of gross unrecognized tax benefits. If recognized, approximately $42 million, net of federal tax benefits, would affect the effective tax rate.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~11. Income Taxes (continued)~~

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized noa net ~~change~~reduction of $5 million in interest and penalties for the three months ended ~~September 30, 2007 and a net reduction of interest and penalties of $7 million for the nine months ended September 30, 2007.~~March 31, 2008. The Company had ~~$16~~$7 million and $9$12 million for the payment of interest and penalties accrued at ~~January 1, 2007~~March 31, 2008 and ~~September 30,~~December 31, 2007, respectively.

It is reasonably possible that the total amounts of unrecognized tax benefits will change in the next 12 months. Based on the current audit position of the Company it is estimated that the total amount of unrecognized tax benefits ~~and interest~~ may decrease by ~~$15~~$50 million to ~~$18~~$60 million in the next 12 months.

The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 1997. The Internal Revenue Service (“IRS”), as part of the overall examination of the American Express Company consolidated return, commenced an examination of the Company’s U.S. income tax returns for 1997 through 2002 in the third quarter of 2005. In the first quarter of 2007, the IRS expanded the period of the ~~exam~~examination to include 2003 through 2004. The ~~Company~~Company’s or certain of its ~~subsidiaries~~subsidiaries’ state income tax returns are currently under examination by various jurisdictions for years ranging from 1998 through 2005.

On September 25, 2007, the IRS issued Revenue Ruling 2007-61 in which it announced that it intends to issue regulations with respect to certain computational aspects of the Dividends Received Deduction (“DRD”) related to separate account assets held in connection with variable contracts of life insurance companies and has added the project to the 2007-2008 Priority Guidance Plan. Revenue Ruling 2007-61 suspended a revenue ruling issued in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time, but they may result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. Management believes that it is likely that any such regulations would apply prospectively only.

The Company’s ~~Tax Allocation Agreement~~tax allocation agreement with American Express (the “Tax Allocation Agreement”), dated as of September 30, 2005, 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. In addition, this Tax Allocation Agreement ~~provides for certain restrictions~~addresses other tax-related matters.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

11. Contingencies

The Company and ~~indemnities~~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 ~~tax treatment~~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 it 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. Uncertain economic conditions and heightened volatility in the financial markets, such as those which have been experienced particularly since the summer of 2007, may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the ~~Distribution~~Company or the financial services industry generally. Relevant to these current market conditions, the Company has been advised by a client of a potential breach of contractual investment guidelines, which management is evaluating. The outcome of this matter is uncertain at this time.

As with other financial services firms, the level of regulatory activity and ~~addresses~~inquiry concerning the Company’s businesses remains elevated. From time to time, the Company receives requests for information from, and have been subject to examination by, the SEC, the Financial Industry Regulatory Authority (“FINRA”) (formerly known as the National Association of Securities Dealers), OTS, state insurance regulators, state attorneys general and various other ~~tax-related matters.~~governmental and quasi-governmental authorities concerning the Company’s business activities and practices, including: sales and product or service features of, or disclosures pertaining to, financial plans and other advice offerings, the Company’s mutual funds, annuities, insurance products and brokerage services; non-cash compensation paid to the Company’s field leaders and financial advisors; supervision of the Company’s financial advisors; and sales of, or brokerage or revenue sharing practices relating to, other companies’ real estate investment trust (“REIT”) shares, mutual fund shares or other investment products. Other open matters relate, among other things, to the administration of death claims to multiple beneficiaries under the Company’s variable annuities, the portability (or network transferability) of the Company’s RiverSource mutual funds, supervisory practices in connection with financial advisors’ outside business activities, sales practices associated with the sale of fixed and variable annuities, the suitability of product recommendations made to retail financial planning clients, the delivery of financial plans, and the suitability of particular trading strategies. The number of reviews and investigations has increased in recent years with regard to many firms in the financial services industry, including Ameriprise Financial. The Company has cooperated and will continue to cooperate with the applicable regulators regarding their inquiries.

These legal and regulatory proceedings and disputes 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 financial condition or results of operations.

Certain legal and regulatory proceedings are 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, and was later transferred to the United States District Court for the District of Minnesota. The plaintiffs alleged that they were investors in several of the Company’s mutual funds and they purported to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs alleged that fees allegedly paid to the defendants by the funds for investment advisory and administrative services were excessive. On July 6, 2007, the Court granted the Company’s motion for summary judgment, dismissing all claims with prejudice. Plaintiffs appealed the Court’s decision, and the appellate argument took place on April 17, 2008. The U.S. Court of Appeals for the Eighth Circuit is now considering the appeal.

The Company previously reported two adverse arbitration awards issued in 2006 by FINRA panels against Securities America, Inc. (“SAI”) and former registered representatives of SAI. Those arbitrations involved customer claims relating to suitability, disclosures, supervision and certain other sales practices. Other clients of those former registered representatives have presented similar claims.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

12. Earnings per Common Share

The computations of basic and diluted earnings per common share are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2007		2006		2007		2006		2008		2007
	(in millions, except per share amounts)								(in millions, except per share amounts)
Numerator:
Net income	$	198	$	174	$	559	$	460	$	191	$	165

Denominator:
Basic: Weighted-average common shares outstanding	235.4		244.5		237.8		247.6		228.4		240.7
Effect of potentially dilutive nonqualified stock options and other share-based awards	3.8		1.9		3.6		1.7		3.1		3.4
Diluted: Weighted-average common shares outstanding	239.2		246.4		241.4		249.3		231.5		244.1

Earnings per Common Share:
Basic	$	0.84	$	0.71	$	2.35	$	1.86	$	0.84	$	0.69
Diluted	0.83		0.71		2.32		1.85		0.82		0.68

Basic weighted average common shares for the three months ~~and nine months~~ ended ~~September 30,~~March 31, 2008 and 2007 included ~~1.4~~2.3 million and 1.7 million, respectively, of vested, nonforfeitable restricted stock units and ~~3.5~~3.2 million and 3.6 million, respectively, of non-vested restricted stock awards and restricted stock units that are forfeitable but receive nonforfeitable dividends. Basic weighted average common shares for the three months and nine months ended September 30, 2006 included 1.4 million and 1.8 million, respectively, of vested, nonforfeitable restricted stock units and 3.7 million and 3.7 million, respectively, of non-vested restricted stock awards and restricted stock units that are forfeitable but receive nonforfeitable dividends. Potentially dilutive securities include nonqualified stock options and other share-based awards.

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

13. ~~Segment Information~~

~~The Company’s two main operating segments, Asset Accumulation and Income (“AA&I”) and Protection, are aligned with the financial solutions the Company offers to address clients’ needs.~~

The AA&I segment offers products and services, both the Company’s and other companies’, to help retail clients address identified financial objectives related to asset accumulation and income management. Products and services in this segment are related to asset management, brokerage and banking, and include mutual funds, wrap accounts, variable and fixed annuities, brokerage accounts and investment certificates. This operating segment also serves institutional clients by providing investment management services in separately managed accounts, sub-advisory and alternative investments. The Company earns revenues in this segment primarily through fees it receives based on managed assets and annuity separate account assets. These fees are impacted by both market movements and net asset flows. The Company also earns net investment income on owned assets, principally supporting the fixed annuity and certificate businesses and capital supporting the business, and distribution fees on sales of mutual funds and other products. This segment includes the results of Securities America Financial Corporation, which through its operating subsidiary, Securities America, Inc. (“SAI”), operates its own separately branded distribution network.

The Protection segment offers a variety of protection products, both the Company’s and other companies’, including life, disability income, long-term care and auto and home insurance to address the identified protection and risk management needs of retail clients. The Company earns revenues in this operating segment primarily through premiums, fees and charges that the Company receives to assume insurance-related risk, fees the Company receives on assets supporting variable universal life separate account balances and net investment income on owned assets supporting insurance reserves and capital supporting the business.

The Corporate and Other (“Corporate”) segment consists of income derived from financial planning fees, investment income on corporate level assets including unallocated equity and unallocated corporate expenses. This segment also includes non-recurring separation costs.

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 and expenses, 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. The Company allocates certain non-recurring items, such as separation costs, to the Corporate segment.

~~The following is a summary of assets by segment:~~

September 30,
2007

December 31,
2006

(in millions)

Asset Accumulation and Income

$
86,439

$
83,308

Protection

19,812

17,360

Corporate and Other

3,603

3,504

Total assets

$
109,854

$
104,172

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~13. Segment Information (continued)~~

~~The following is a summary of segment operating results:~~

Asset
Accumulation
and Income

Protection

Corporate
and Other

Eliminations

Consolidated

(in millions)

Three Months Ended September 30,

2007

Revenue from external customers

$
1,615

$
510

$
77

$
—

$
2,202

Intersegment revenue

4

8

—

(12
)
—

Total revenues

$
1,619

$
518

$
77

$
(12
)
$
2,202

Income (loss) before income tax provision

$
259

$
73

$
(115
)
$
—

$
217

Income tax provision

19

Net income

$
198

2006

Revenue from external customers

$
1,418

$
492

$
67

$
—

$
1,977

Intersegment revenue

5

6

—

(11
)
—

Total revenues

$
1,423

$
498

$
67

$
(11
)
$
1,977

Income (loss) before income tax provision

$
192

$
151

$
(126
)
$
—

$
217

Income tax provision

43

Net income

$
174

Nine Months Ended September 30,

2007

Revenue from external customers

$
4,719

$
1,501

$
227

$
—

$
6,447

Intersegment revenue

13

25

—

(38
)
—

Total revenues

$
4,732

$
1,526

$
227

$
(38
)
$
6,447

Income (loss) before income tax provision

$
769

$
276

$
(367
)
$
—

$
678

Income tax provision

119

Net income

$
559

2006

Revenue from external customers

$
4,324

$
1,450

$
205

$
—

$
5,979

Intersegment revenue

14

17

—

(31
)
—

Total revenues

$
4,338

$
1,467

$
205

$
(31
)
$
5,979

Income (loss) before income tax provision

$
642

$
317

$
(365
)
$
—

$
594

Income tax provision

134

Net income

$
460

~~AMERIPRISE FINANCIAL, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~14. Related Party Transactions~~Shareholders’ Equity

The Company may engage in transactions in the ordinary course of business with significant shareholders or their subsidiaries, 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. Other than for thehas a share repurchase ~~from Berkshire Hathaway Inc. and subsidiaries (“Berkshire”) described below,~~program in place to return excess capital to shareholders. During the ~~transactions have not had a material impact on the Company’s consolidated results of operations or financial condition.~~

Davis Selected Advisors, L.P. or its affiliates (“Davis”) owned approximately 9% of the Company’s common stock at June 30, 2007. In the ordinary course of business, the Company obtains investment advisory or sub-advisory services from Davis. The Company, or the mutual funds or other clients to which the Company provides advisory services, pay fees to Davis for its services. In the ordinary course of business, Davis pays fees to the Company for distribution services of Davis’ products to the Company’s clients.

FMR Corp. or its affiliates (“FMR”) owned approximately 7% of the Company’s common stock at June 30, 2007. In the ordinary course of business, the Company pays fees to FMR for distribution services of RiverSource Funds to FMR’s clients and FMR pays fees to the Company for distribution services of FMR’s investment products to the Company’s clients.

On March 29, 2006, the Company entered into a Stock Purchase and Sale Agreement with Warren E. Buffett and Berkshire to repurchase 6.4 million shares of the Company’s common stock. The repurchase was completed on March 29, 2006 at a price per share equal to the March 29, 2006 closing price of $42.91 and reduced Berkshire’s ownership of the Company’s common stock to approximately 9.8% of common shares then outstanding. Berkshire’s ownership of the Company’s common stock was further reduced to approximately 1% at June 30, 2007.

The Company’s executive officers and directors may have transactions with the Company or its subsidiaries involving financial products and insurance services. All obligations arising from these transactions are in the ordinary course of the Company’s business and are on the same terms in effect for comparable transactions with the general public. Such obligations involve normal risks of collection and do not have features or terms that are unfavorable to the Company’s subsidiaries.

~~15. Common Share Repurchases~~

In January 2006, the Company’s Board of Directors authorized the repurchase of up to 2 million shares of the Company’s common stock. In March 2006, the Company’s Board of Directors authorized the expenditure of up to $750 million for the repurchase of additional shares throughthree months ended March 31, ~~2008. In March~~2008 and 2007, the Company’s Board of Directors authorized the expenditure of up to an additional $1.0 billion for the repurchase of shares through March 15, 2009. During the nine months ended September 30, 2007 and 2006, the Company repurchased a total of ~~11.1~~5.2 million ~~shares~~ and ~~9.7~~5.9 million shares, respectively, of its common stock ~~for~~at an ~~aggregate cost~~average price of ~~$665 million~~$51.55 and ~~$422 million,~~$59.76, respectively. As of ~~September 30, 2007,~~March 31, 2008, the Company had ~~purchased all shares under the January 2006 and March 2006 authorizations and had $701~~$148 million remaining under ~~the March 2007 authorization.~~share repurchase authorizations.

The Company may also reacquire shares of its common stock under its 2005 ICP related to restricted stock awards. Restricted shares that are forfeited before the vesting period has lapsed are recorded as treasury shares. In addition, the holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations. These vested restricted shares reacquired by the Company and the Company’s payment of the holders’ income tax obligations are recorded as a treasury share purchase. The restricted shares forfeited under the 2005 ICP and recorded as treasury shares were ~~0.2 million~~nil during both the ~~nine~~three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006.~~2007. For the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007, ~~and 2006,~~ the Company reacquired 0.4 million shares ~~and 0.4 million shares, respectively,~~ of its common stock in each period through the surrender of restricted shares upon vesting and paid in the aggregate ~~$25~~$20 million and ~~$16~~$23 million, respectively, related to the holders’ income tax obligations on the vesting date.

17During the three months ended March 31, 2008, the Company reissued 1.1 million treasury shares for restricted stock award grants and issuance of shares vested under the P2 Deferral Plan.

In April 2008, the Company’s Board of Directors authorized the expenditure of up to $1.5 billion for the repurchase of the Company’s common stock through April 2010.

14. Segment Information

On December 3, 2007, the Company announced a change in its reportable segments. The revised presentation of previously reported segment data has been applied retroactively to all periods presented in these financial statements. During the fourth quarter of 2007, the Company completed the implementation of an enhanced transfer pricing methodology and expanded its segment presentation from three to five segments to better align with the way the Chief Operating Decision Maker views the business. This facilitates greater transparency of the relationships between the businesses and better comparison to other industry participants in the retail advisor distribution, asset management, insurance and annuity industries. In addition, the Company changed the format of its consolidated statement of income and made reclassifications to enhance transparency. These reclassifications did not result in any changes to consolidated net income or shareholders’ equity. A summarization of the various reclassifications made to previously reported balances is presented in Note 1 to the Consolidated Financial Statements in the Company’s 2007 10-K.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company’s five segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other. Each segment records revenues and expenses as if they were each a stand-alone business using the Company’s enhanced transfer pricing methodology. Transfer pricing uses rates that approximate market-based arm’s length prices for specific services provided. The Company reviews the transfer pricing rates periodically and makes appropriate adjustments to ensure the transfer pricing rates that approximate arm’s length market prices remain at current market levels. Costs related to shared services are allocated to segments based on their usage of the services provided.

The largest source of intersegment revenues and expenses is retail distribution services, where segments are charged transfer pricing rates that approximate arm’s length market prices for distribution through the Advice & Wealth Management segment. The Advice & Wealth Management segment provides distribution services for proprietary and non-proprietary products and services. The Asset Management segment provides investment management services for the Company’s owned assets and client assets, and accordingly charges investment and advisory management fees to the other segments.

All costs related to shared services are allocated to the segments based on a rate times volume or fixed basis.

The Advice & Wealth Management segment provides financial advice and full service brokerage and banking services, primarily to retail clients, through the Company’s financial advisors. The advisors distribute a diversified selection of both proprietary and non-proprietary products to help clients meet their financial needs. A significant portion of revenues in this segment are fee-based, driven by the level of client assets, which is impacted by both market movements and net asset flows. The Company also earns net investment income on owned assets, from primarily certificate and banking products. This segment earns distribution fees for distributing non-proprietary products and earns intersegment distribution fees for distributing the Company’s proprietary products and services to its retail clients. Intersegment expenses for this segment include expenses for investment management services provided by the Asset Management segment.

The Asset Management segment provides investment advice and investment products to retail and institutional clients. Threadneedle predominantly provides international investment advice and products, and RiverSource Investments predominantly provides domestic products and services. Domestic retail products are primarily distributed through the Advice & Wealth Management segment, and also through third-party distribution. International retail products are primarily distributed through third parties. Products accessed by consumers on a retail basis include mutual funds, variable product funds underlying insurance and annuity separate accounts, separately managed accounts and collective funds. Asset Management products are also distributed directly to institutions through an institutional sales force. Institutional asset management products include traditional asset classes, separate accounts, collateralized loan obligations, hedge funds and property funds. Revenues in this segment are primarily earned as fees based on managed asset balances, which are impacted by both market movements and net asset flows. This segment earns intersegment revenue for investment management services. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management, Annuities and Protection segments.

The Annuities segment provides RiverSource Life variable and fixed annuity products to the Company’s retail clients, primarily distributed through the Advice & Wealth Management segment, and to the retail clients of unaffiliated distributors through third-party distribution. Revenues for the Company’s variable annuity products are primarily earned as fees based on underlying account balances, which are impacted by both market movements and net asset flows. Revenues for the Company’s fixed annuity products are primarily earned as net investment income on underlying account balances, with profitability significantly impacted by the spread between net investment income earned and interest credited on the fixed account balances. The Company also earns net investment income on owned assets supporting annuity benefit reserves and capital supporting the business. Intersegment revenues for this segment reflect fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource Funds under the variable annuity contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment.

The Protection segment offers a variety of protection products to address the identified protection and risk management needs of the Company’s retail clients including life, disability income and property-casualty insurance. Life and disability income products are primarily distributed through the Advice & Wealth Management segment. The Company’s property-casualty products are sold direct, primarily through affinity relationships. The primary sources of revenues for this segment are premiums, fees, and charges that the Company receives to assume insurance-related risk. The Company earns net investment income on owned assets supporting insurance reserves and capital supporting the business. The Company also receives fees based on the level of assets supporting variable universal life separate account balances. This segment earns intersegment revenues from fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource Funds under the variable universal life contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment.

AMERIPRISE FINANCIAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ~~(continued)~~

~~16. Contingencies~~

The ~~Company~~Corporate & Other segment consists of net investment income on corporate level assets, including unallocated equity 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 Companyother revenues from various investments as well as ~~proceedings generally applicable to business practices~~unallocated corporate expenses. This segment also includes non-recurring separation costs in the industries in which it 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.

As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. From time to time, the Company receives requests for information from, and has been subject to examination by the SEC, Financial Industry Regulatory Authority (“FINRA,” formerly known as “NASD”), Office of Thrift Supervision, state insurance regulators and various other governmental and quasi-governmental 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 field leaders and financial advisors; supervision of its financial advisors; and sales of, or brokerage or revenue sharing practices relating to, other companies’ real estate investment trust (“REIT”) shares, mutual fund shares or other investment products. Other open matters relate, among other things, to the administration of death claims to multiple beneficiaries under the Company’s variable annuities, the portability (or network transferability) of the Company’s RiverSource mutual funds, supervisory practices in connection with financial advisors’ outside business activities, sales practices2007 associated with the sale of variable annuities, the suitability of product recommendations made to retail financial planning clients and the delivery of financial plans, and the suitability of particular trading strategies. 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.

These legal and regulatory 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 financial condition or results of operations.~~

~~Certain legal and regulatory proceedings involving the Company are described below.~~

~~In June 2004, an action captioned John E. Gallus et al. v.~~separation from American Express Financial Corp. and American Express Financial Advisors Inc., was filed in the United States District Court for the District of Arizona, and was later transferred to the United States District Court for the District of Minnesota. The plaintiffs alleged that they are investors in several of the Company’s mutual funds and they purported to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs alleged that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. On July 6, 2007, the Court granted Ameriprise’s motion for summary judgment, dismissing all claims with prejudice. Plaintiffs have appealed the Court’s decision.Express.

The ~~settlement~~accounting policies of the ~~class action lawsuit filed in October 2004 called “In re American Express Financial Advisors Securities Litigation” was approved by~~segments are the ~~Court on July 18, 2007. The Court issued an Order and Final Judgment that dismissed~~same as those of the ~~Class Action Complaint with prejudice, released the defendants from all liability~~Company, except for the ~~claims asserted~~method of capital allocation and ~~any other claims~~the accounting for gains (losses) from intercompany revenues and expenses, which are eliminated in consolidation. The Company allocates capital to each segment based upon ~~the same core allegations, and enjoined class members from asserting such claims in the future. In August 2007~~ an ~~objector filed an appeal, primarily contesting the attorney’s fees allocation. The settlement will not be implemented until the appeal is resolved.~~

In March 2006, a lawsuit captioned Good, et al. v. Ameriprise Financial, Inc. et al. (Case No. 00-cv-01027) was filed in the United States District Court for the District of Minnesota. The lawsuit has been brought as a putative class action and plaintiffs purport to represent all of the Company’s advisors who sold shares of REITs and tax credit limited partnerships between March 2000 and March 2006. Plaintiffs seek unspecified compensatory and restitutionary damages as well as injunctive relief, alleginginternal capital allocation method that allows the Company ~~incorrectly calculated commissions owed advisors for~~to more efficiently manage its capital. The Company evaluates the ~~sale~~performance of ~~these products. In September 2007,~~each segment based on pretax income from continuing operations. The Company allocates certain non-recurring items, such as separation costs, to the ~~Company moved for summary judgment on all claims and is awaiting the Court’s ruling on the motion.~~Corporate segment.

The ~~Company previously reported two adverse arbitration awards issued in 2006~~following is a summary of assets by FINRA (then known as the National Association of Securities Dealers) panels against Securities America, Inc. and former registered representatives of SAI. Those arbitrations involved customer claims relating to suitability, disclosures, supervision and certain other sales practices. Other clients of those former registered representatives have presented claims.segment:

	March 31, 2008		December 31, 2007
	(in millions)
Advice & Wealth Management	$	8,016	$	8,146
Asset Management	6,280		6,661
Annuities	68,060		71,556
Protection	20,226		20,347
Corporate & Other	2,320		2,520
Total assets	$	104,902	$	109,230

~~In October 2007, the State~~

The following is a summary of New Hampshire commenced an action against the Company captioned In the Matter of Ameriprise Financial, Inc., Ameriprise Financial Services, Inc. & Larry Post. The action includes claims of New Hampshire statutory violations related to the alleged failure to deliver financial plans sold to clients, instances of forgery and failure to supervise.segment operating results:

	Three Months Ended March 31, 2008
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Eliminations			Consolidated
	(in millions)
Revenue from external customers	$	729	$	351	$	537	$	482	$	7		$	—		$	2,106
Intersegment revenue	227		6		27		10		3			(273		)	—
Total revenues	956		357		564		492		10			(273		)	2,106
Banking and deposit interest expense	20		2		—		—		1			(3		)	20
Net revenues	936		355		564		492		9			(270		)	2,086
Pretax income (loss)	$	64	$	18	$	42	$	102	$	(31	)	$	—		195
Income tax provision															4
Net income															$	191

	Three Months Ended March 31, 2007
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Eliminations			Consolidated
	(in millions)
Revenue from external customers	$	702	$	407	$	502	$	469	$	16		$	—		$	2,096
Intersegment revenue	268		8		24		12		—			(312		)	—
Total revenues	970		415		526		481		16			(312		)	2,096
Banking and deposit interest expense	64		4		—		—		2			(1		)	69
Net revenues	906		411		526		481		14			(311		)	2,027
Pretax income (loss)	$	56	$	46	$	118	$	120	$	(124	)	$	—		216
Income tax provision															51
Net income															$	165

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with the “Forward-Looking Statements” that follow and our Consolidated Financial Statements and Notes presented in Item 1. ~~We believe it is useful to~~Our Management’s Discussion and Analysis should be read ~~our MD&A~~ in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2006,~~2007, filed with the Securities and Exchange Commission (“SEC”) on February ~~27,~~ 29, 2008 (“2007 10-K”), as well as our current reports on Form 8-K and other publicly available information.

Overview

We are ~~the leading~~engaged in providing financial planning, products and services ~~company~~that are designed to be utilized as solutions for our clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs with ~~approximately 12,000~~a network of more than 11,600 financial advisors and registered representatives ~~that provides solutions for clients’~~(“affiliated financial advisors”). Our asset ~~accumulation, income~~ management, annuity, and ~~insurance~~auto and home protection ~~needs.~~ products are also distributed outside of our affiliated financial advisors, through third party advisors and affinity relationships.

We ~~seek~~strive to deliver solutions to our clients through ~~a comprehensive~~an approach focused on building long term personal relationships. We offer financial planning ~~approach built on a long-term client relationship with a knowledgeable financial advisor~~ and advice that aims to ~~help clients~~be responsive to our clients’ evolving needs and helps them achieve their identified financial goals by ~~providing~~recommending to clients actions and a range of product solutions consisting of investment, annuities, insurance, banking and other financial products that ~~position~~help them ~~to realize their financial goals~~achieve a positive return or form of protection while accepting what they ~~are accepting~~determine to be an appropriate range and level of risk. The financial product solutions we offer through our affiliated advisors include our own products and services and products of other companies. Our financial planning and advisory process is designed to provide comprehensive advice, when appropriate, to address our clients’ cash and liquidity, asset accumulation, income, protection, and estate and wealth transfer needs. We ~~specialize~~believe that our focus on personal relationships, together with our strengths in ~~meeting the retirement-related~~financial planning and product development, allows us to better address our clients’ financial needs, including the financial needs of our primary target market segment, the mass affluent and ~~affluent. We~~affluent, which we define as households with investable assets of more than $100,000. This focus also ~~offer asset management products~~puts us in a strong position to capitalize on significant demographic and ~~services~~market trends, which we believe will continue to ~~institutional clients.~~drive increased demand for our financial planning and other financial services.

We have ~~two~~four main operating segments: Advice & Wealth Management, Asset ~~Accumulation and Income (“AA&I”)~~Management, Annuities and Protection, as well as aour Corporate ~~and~~& Other ~~(“Corporate”)~~ segment. Our ~~two~~four main operating segments are aligned with the financial solutions we offer to address our clients’ needs. The products and services we provide retail clients and, to a lesser extent, institutional clients, are the primary source of our revenues and net income. Revenues and net income are significantly impacted by the relative investment performance and the total value and composition of assets we manage and administer for our retail and institutional clients as well as the distribution fees we receive from other companies. These factors, in turn, are largely determined by overall investment market performance and the depth and breadth of our individual client relationships.

It is ~~our~~ management’s priority to increase shareholder value over a multi-year horizon by achieving our on-average, over-time financial targets. We measure progress against these goals excluding the impact of non-recurring separation costs related to our separation from American Express Company (“American Express”)~~, specifically, non-recurring separation costs.~~ which was completed in 2007. Our financial targets, adjusted to exclude this impact, are:

•· ~~Annual~~Net revenue growth of 6% to 8%,

•· ~~Annual earnings~~Earnings per diluted share growth of 12% to 15%, and

•· Return on equity of 12% to 15%.

Our net revenues infor the ~~third quarter of 2007~~three months ended March 31, 2008 were ~~$2.2~~$2.1 billion, an increase of ~~11% over~~3% from the ~~same period last year. The increase in revenues primarily~~three months ended March 31, 2007. This revenue growth reflected ~~growth in our fee-based businesses, including growth~~increases in management and financial advice ~~and services~~ fees and ~~distribution fees, primarily driven~~a decrease in banking and deposit interest expense, partially offset by ~~continued strong~~a decline in net ~~inflows in wrap accounts~~investment income due to market declines and ~~annuity variable accounts~~lower certificates and ~~market appreciation.~~fixed annuities balances.

Our consolidated net income for the three months ended ~~September 30, 2007~~March 31, 2008 was ~~$198~~$191 million, up ~~$24~~$26 million, or ~~14%~~16%, from net income of ~~$174~~$165 million for the three months ended ~~September 30, 2006.~~March 31, 2007. Our adjusted earnings, which exclude after-tax non-recurring separation costs ~~rose 3%~~in 2007, declined 13% to ~~$237~~$191 million for the three months ended ~~September 30, 2007~~March 31, 2008 from ~~$231~~$220 million for the three months ended ~~September 30, 2006. Our earnings~~March 31, 2007.

Earnings per diluted share for the ~~third quarter of 2007~~three months ended March 31, 2008 were ~~$0.83, an increase of 17%~~$0.82, up $0.14, or 21%, from ~~$0.71 for the third quarter of 2006. Our adjusted~~ earnings per diluted share ~~were $0.99~~of $0.68 for the three months ended ~~September 30,~~March 31, 2007. Adjusted earnings per diluted share, which exclude after-tax non-recurring separation costs in 2007, ~~up 5%~~declined 9% from ~~$0.94~~$0.90 for the three months ended ~~September 30, 2006.~~March 31, 2007.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Return on equity for the trailing twelve months ended ~~September 30, 2007~~March 31, 2008 was ~~9.4%~~10.9% compared to ~~7.6%~~8.6% for the trailing twelve months ended ~~September 30, 2006.~~March 31, 2007. Adjusted return on equity for both the trailing twelve months ended ~~September 30,~~March 31, 2008 and March 31, 2007 ~~rose to 12.4% from 11.2% for the trailing twelve months ended September 30, 2006.~~was 12.2%.

We continue to establish Ameriprise Financial as a financial services leader as we focus on meeting the financial needs of the mass affluent and affluent, as evidenced by ~~growth~~our continued leadership in financial planning, gains in advisor productivity, and our ~~mass affluent and affluent~~strong corporate foundation. Our client ~~groups, cash sales and owned, managed and administered assets. Our mass affluent and affluent client groups as of September 30, 2007 increased 11% since September 30, 2006. The~~retention percentage ~~of our clients with a financial plan~~remained strong at ~~September 30, 2007 was 45% compared to 44% at September 30, 2006.~~94%. While ~~our franchisee advisors increased 2%,~~ the total number of financial advisors decreased 3%6% from the ~~prior year quarter, as we hired fewer employee advisors and continued to focus on further strengthening employee~~year-ago period, advisor ~~productivity and distribution economics. Advisor~~ productivity increased from the year-ago period as reflected by ~~a 14%~~an 11% growth in ~~total gross dealer concession (“GDC”) compared to the third quarter of 2006, primarily driven by continued strength in variable annuity sales, wrap account~~ net ~~inflows and growth in sales of direct investments.~~revenue per advisor. Our franchisee advisor retention ~~rate~~ as of ~~September 30, 2007 remained high at~~March 31, 2008 increased to 94% as compared to the annual retention rate of 93%~~, which was consistent with~~ in the year-ago period.

Our owned, managed and administered (“OMA”) assets ~~increased~~declined to ~~$491.6~~$450.7 billion at ~~September 30, 2007,~~March 31, 2008, a net ~~increase~~decrease of ~~12%~~6% from ~~September 30, 2006~~December 31, 2007 OMA assets of ~~$440.0~~$480.2 billion. For the ~~third quarter of 2007,~~three months ended March 31, 2008, we had net inflows in ~~RiverSource annuity variable accounts of $1.3 billion and net inflows in Ameriprise Financial and Securities America, Inc. (“SAI”)~~ wrap accounts of ~~$2.6~~$1.4 billion, ~~which reflects our clients increasingly choosing fee-based products within their portfolios.~~offset by market declines of $5.6 billion. RiverSource variable annuities had net inflows of $0.9 billion, offset by market declines and lower interest credited of $3.6 billion. Our ~~certificate and annuity~~ fixed ~~accounts~~annuities had total net outflows of ~~$1.3~~$0.5 billion reflecting clients’ preferences for ~~the three months ended September 30, 2007, reflecting~~other products in the current ~~interest rate~~economic environment ~~and our strategy to focus on less capital-intensive products.~~. RiverSource ~~managed retail funds~~Funds had ~~net inflows of $0.4 billion in the third quarter of 2007 compared to~~ net outflows of $0.6 billion in the same period of 2006. This improvement in net flows resulted from increased mutual fund and annuity variable account sales, with sales of long-term mutual funds increasing 84% compared to the prior year period. Administered assets increased over the year-ago period primarily due to increased brokerage activitythree months ended March 31, 2008 and market ~~appreciation.~~declines of $6.0 billion. Threadneedle Asset Management Holdings Limited (“Threadneedle”) managed assets had net outflows of $2.5 billion, primarily related to low-margin Zurich-related assets.

~~Significant Factors Affecting our Results of Operations and Financial Condition~~Share Repurchase

~~Share Repurchase~~

During the three months ended March 31, 2008 and 2007, we purchased 5.2 million shares and 5.9 million shares, respectively, for an aggregate cost of $270 million and $352 million, respectively. As of March 31, 2008, we had $148 million remaining under share repurchase authorizations. In ~~March 2007,~~April 2008, our Board of Directors authorized the expenditure of up to $1$1.5 billion for the repurchase of ~~shares of~~ our common stock through March 15, 2009. This authorization was in addition to a Board authorization in March 2006 for the expenditure of up to $750 million for the repurchase of shares through the end of March 2008 and a Board authorization in January 2006 to repurchase up to 2 million shares by the end of 2006. Through September 30, 2007, we have purchased 21.8 million shares under these programs for an aggregate cost of $1.1 billion. As of September 30, 2007, we had purchased all shares under the January 2006 and March 2006 authorizations and had $701 million remaining under the March 2007 authorization.April 2010.

~~Sale of our Defined Contribution Recordkeeping Business~~

On June 1, 2006, we completed the sale of our defined contribution recordkeeping business and recognized $66 million of revenues and $30 million of expenses in connection with the sale. In addition, the buyer of the business is subject to a contingent payment to be paid to us based on the level of client revenues retained by the buyer after 18 months from the sale closing date. While we believe the payment is likely, it will not be determined or paid until December 2007. The administered assets transferred in connection with this sale were approximately $16.7 billion. Although our defined contribution recordkeeping business generated approximately $60 million in annual revenue, we experienced expense savings related to this sale, and the sale has not had a material impact on pretax income. We continue to manage approximately $11.1 billion of defined contribution assets under investment management only contracts, as of September 30, 2007.

~~Launch of Ameriprise Bank, FSB and Acquisition of Bank Deposits and Loans~~

In September 2006, we obtained our federal savings bank charter and launched Ameriprise Bank, FSB (“Ameriprise Bank”), a wholly owned subsidiary. In the second half of 2006, Ameriprise Bank acquired $493 million of customer loans and assumed $963 million of customer deposits from American Express Bank, FSB, a subsidiary of American Express, and received cash of $470 million in connection with these transactions. Ameriprise Bank offers a suite of borrowing, cash management and personal trust products and services, primarily through our branded advisors. We are currently building our banking platform, and do not expect it to be a significant contributor to earnings in the near term.

~~Financing Arrangements~~

On May 26, 2006, we issued $500 million principal amount of junior subordinated notes due 2066 (“junior notes”). These junior notes carry a fixed interest rate of 7.518% for the first 10 years and a variable interest rate thereafter. These junior notes receive at least a 75% equity credit by the majority of our credit rating agencies for purposes of their calculation of our debt to total capital ratio. The net proceeds from the issuance were for general corporate purposes.

Separation from American Express

~~Our separation from American Express resulted in specifically identifiable impacts to our consolidated results of operations and financial condition.~~

~~Separation and Distribution~~

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 (the “Separation”) through a tax-free distribution to American Express shareholders. Effective as of the close of business on September 30, 2005, American Express completed the Separation of our company and the distribution of our common shares to American Express shareholders (the “Distribution”). Prior to the Distribution, we had been a wholly owned subsidiary of American Express. Our separation from American Express resulted in specifically identifiable impacts to our 2007 consolidated results of operations and financial condition.

~~Separation Costs~~

~~Since the Separation announcement through September 30, 2007, we have~~We incurred ~~$862~~a total of $890 million of non-recurring separation ~~costs.~~costs as part of our separation from American Express. These costs ~~are~~were primarily associated with establishing the Ameriprise Financial brand, separating and reestablishing our technology platforms and advisor and employee retention programs. ~~We expect to incur approximately $25 million to $30 million in costs in the fourth quarter of 2007, reflecting all remaining costs from the Separation, which was completed as of September 30, 2007.~~

~~Services and Operations Provided by American Express~~

American Express has historically provided us a variety of corporate and other support services, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal, procurement and other services. Following the Distribution, American Express provided us with many of these services pursuant to transition services agreements for periods of up to two years or more, if extended by mutual agreement between us and American Express. As of September 30, 2007, the Company has terminated all of these service agreements and has completed theOur separation from American ~~Express.~~

~~Sale of AMEX Assurance Company (“AMEX Assurance”)~~

~~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 for a fixed price equal to the net book value of AMEX Assurance as of the Distribution. The sale~~ was completed ~~on September 30, 2007 for a sale price of $115 million.~~

~~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 and other asset-based fees we earn, the “spread” income generated on our annuities, banking and deposit products and universal life (“UL”) insurance products, the value of deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) assets associated with variable annuity and variable UL products, the values of liabilities for guaranteed benefits associated with our variable annuities and the values of derivatives held to hedge these benefits.

~~For additional information regarding our sensitivity to equity risk and interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk.”~~in 2007.

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.

~~Non-GAAP~~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 non-recurring separation costs. ~~Our~~Certain of our key non-GAAP financial measures ~~which we view as important indicators of financial performance,~~ include:

•· ~~expenses excluding non-recurring separation costs;~~

• adjusted earnings or net income excluding non-recurring separation costs;

•· adjusted earnings per diluted share; and

•· adjusted return on equity, using as the numerator adjusted earnings for the last 12 months and as the denominator a five-point average of equity excluding 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 best reflects the underlying performance of our ~~ongoing~~2007 operations and facilitates a more meaningful trend analysis. These non-GAAP measures ~~are~~were 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.

2122

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

A reconciliation of non-GAAP measures is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2007		2006		2007		2006		2008		2007
	(in millions, except per share amounts)								(in millions, except per share amounts)
Consolidated Income Data
Net income	$	198	$	174	$	559	$	460	$	191	$	165
Add: Separation costs, after-tax	39		57		135		155		—		55
Adjusted earnings	$	237	$	231	$	694	$	615	$	191	$	220

Weighted average diluted shares	239.2		246.4		241.4		249.3		231.5		244.1
Adjusted earnings per diluted share	$	0.99	$	0.94	$	2.87	$	2.47	$	0.82	$	0.90

Separation costs	$	60	$	87	$	208	$	238	$	—	$	85
Less: Tax benefit attributable to separation costs	21		30		73		83		—		30
Separation costs, after-tax	$	39	$	57	$	135	$	155	$	—	$	55

	Twelve Months Ended September 30,						Twelve Months Ended March 31,
	2007			2006			2008			2007
	(in millions, except percentages)						(in millions, except percentages)
Return on Equity
Return on equity	9.4		%	7.6		%	10.9		%	8.6		%

Net income	$	730		$	571		$	840		$	651
Add: Separation costs, after-tax	215			236
Add: Separation costs, after-tax⁽¹⁾							99			246
Adjusted earnings	$	945		$	807		$	939		$	897

Equity	$	7,753		$	7,550		$	7,696		$	7,597
Less: Equity allocated to expected separation costs	102			336			29			215
Adjusted equity	$	7,651		$	7,214		$	7,667		$	7,382

Adjusted return on equity	12.4		%	11.2		%
Adjusted return on equity⁽²⁾							12.2		%	12.2		%

(1)For this non-GAAP presentation of separation costs, after-tax is calculated using the statutory tax rate of 35%.

(2)Adjusted return on equity is calculated using adjusted earnings (income excluding non-recurring separation costs) in the numerator, and equity excluding equity allocated to expected non-recurring separation costs as of the last day of the preceding four quarters and the current quarter in the denominator.

Owned, Managed and Administered Assets

Owned assets include certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-proprietary funds held in the separate accounts of our life insurance subsidiaries, as well as restricted and segregated cash and receivables.

Managed assets include managed external client assets and managed owned assets. Managed external client assets include client assets for which we provide investment management services, such as the assets of the RiverSource family of mutual funds, assets of institutional clients and client assets held in wrap accounts. Managed external client assets also include assets managed by sub-advisors selected by us. Managed external client assets are not reported on our Consolidated Balance Sheets. Managed owned assets include certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees, such as the assets of the general account and RiverSource Variable Product funds held in the separate accounts of our life insurance subsidiaries.

Administered assets include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ 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.

We earn management fees on our owned separate account assets based on the market value of assets held in the separate accounts. We record the income associated with our owned investments, including net realized gains and losses associated with these investments and other-than-temporary impairments ofon these investments, as net investment income. For managed assets, we receive management fees based on the value of these assets. We generally report these fees as management and financial advice ~~and service~~ fees. We may also receive distribution fees based on the value of these assets. We generally record fees received from administered assets as distribution fees.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Fluctuations in our owned, managed and administered assets impact our revenues. Our owned, managed and administered assets are impacted by net flows of client assets and market movements. ~~Owned~~Managed owned assets are also affected by changes in our capital structure. During the ~~third quarter of~~three months ended March 31, 2008 and 2007, RiverSource ~~retail funds~~managed assets had ~~$0.4~~$2.6 billion in net ~~inflows~~outflows for both periods. Threadneedle managed assets had $2.5 billion in net outflows in the three months ended March 31, 2008 compared to net outflows of ~~$0.6~~$2.4 billion during the ~~prior year quarter. Overall, during the third quarter of 2007, we~~three months ended March 31, 2007. Our wrap accounts had net inflows ~~in our managed assets~~ of ~~$2.0~~$1.4 billion in ~~Ameriprise Financial wrap accounts, $0.6~~the three months ended March 31, 2008 compared to net inflows of $3.4 billion in SAI wrap accounts and $0.3 billion in RiverSource institutional funds, and had $1.3 billion in net inflows in our owned RiverSource annuity variable accounts. In addition, we had net outflows in our owned certificate and fixed annuity assets of $1.3 billion during the ~~third quarter of 2007, reflecting a continued trend of net outflows in these assets as clients choose other products in the current interest rate environment and as we focus on fee-based products.~~three months ended March 31, 2007.

~~Threadneedle Asset Management Holdings Limited (“Threadneedle”) acquired Convivo Capital Management Limited on October 1, 2007, improving our alternative investment capabilities.~~

The following table presents ~~information~~detail regarding our owned, ~~assets, which are included in our Consolidated Balance Sheets, and our~~ managed and administered ~~assets, which are not recorded on our Consolidated Balance Sheets:~~assets:

September 30,

2007

2006

% Change

(in billions, except percentages)

Owned Assets:

Separate accounts⁽¹⁾

$
62.4

$
48.8

28
%
Investments

31.2

36.2

(14
)
Other⁽²⁾

9.2

7.7

19

Total Owned Assets

102.8

92.7

11

Managed Assets:

Managed Assets—Retail

RiverSource Mutual Funds

63.2

57.6

10

Threadneedle⁽³⁾ Mutual Funds

18.4

15.6

18

Ameriprise Financial Wrap Account Assets

79.6

59.9

33

SAI Wrap Account Assets

13.3

10.2

30

Total Managed Assets—Retail

174.5

143.3

22

Managed Assets—Institutional

RiverSource

29.7

26.8

11

Threadneedle⁽³⁾

111.5

108.0

3

Total Managed Assets—Institutional

141.2

134.8

5

Managed Assets—Retirement Services

RiverSource Collective Funds

9.3

11.0

(15
)
Managed Assets—Eliminations⁽⁴⁾

(9.6
)
(5.7
)
(68
)
Total Managed Assets

315.4

283.4

11

Administered Assets

73.4

63.9

15

Total Owned, Managed and Administered Assets

$
491.6

$
440.0

12

	March 31, 2008			December 31, 2007			Change
	(in billions, except percentages)
Owned Assets	$	36.8		$	39.6		(7	)%
Managed Assets⁽¹⁾:
RiverSource	148.6			157.9			(6	)
Threadneedle	124.3			134.4			(8	)
Wrap account assets	89.6			93.9			(5	)
Eliminations⁽²⁾	(14.4		)	(16.6		)	(13	)
Total Managed Assets	348.1			369.6			(6	)
Administered Assets	65.8			71.0			(7	)
Total Owned, Managed and Administered Assets	$	450.7		$	480.2		(6	)%

⁽¹⁾ Includes ~~$25.5 billion~~managed external client assets and ~~$20.5 billion, respectively, of RiverSource~~ managed ~~funds supporting separate account assets, which are not included in RiverSource managed assets in this table.~~

⁽²⁾~~Includes cash and cash equivalents, restricted and segregated cash, receivables and other~~owned assets.

⁽³⁾⁽²⁾ ~~Threadneedle is a subsidiary of our company.~~

⁽⁴⁾Includes eliminations for RiverSource mutual fund assets included in ~~Ameriprise Financial~~ wrap account ~~assets.~~assets and RiverSource assets sub-advised by Threadneedle.

Consolidated Results of Operations

for the Three Months Ended ~~September 30,~~March 31, 2008 and 2007 ~~Compared to Three Months Ended September 30, 2006~~

The following table presents our consolidated results of operations for the three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006:~~2007:

	Three Months Ended September 30,									Three Months Ended March 31,
	2007		2006		Change					2008		2007		Change
	(in millions, except percentages)									(in millions, except percentages)
Revenues
Management, financial advice and service fees	$	878	$	720	$	158		22	%
Management and financial advice fees										$	791	$	722	$	69		10	%
Distribution fees	352		300		52			17		433		418		15			4
Net investment income	552		542		10			2		460		532		(72		)	(14	)
Premiums	246		244		2			1		265		257		8			3
Other revenues	174		171		3			2		157		167		(10		)	(6	)
Total revenues	2,202		1,977		225			11		2,106		2,096		10			—
Banking and deposit interest expense										20		69		(49		)	(71	)
Total net revenues										2,086		2,027		59			3

Expenses										541		478		63			13
Compensation and benefits:
Field	522		428		94			22
Non-field	333		328		5			2
Total compensation and benefits	855		756		99			13
Interest credited to account values	282		317		(35		)	(11	)
Distribution expenses
Interest credited to fixed accounts										178		217		(39		)	(18	)
Benefits, claims, losses and settlement expenses	383		233		150			64		407		251		156			62
Amortization of deferred acquisition costs	128		87		41			47		154		134		20			15
Interest and debt expense	29		32		(3		)	(9	)	26		29		(3		)	(10	)
Separation costs	60		87		(27		)	(31	)	—		85		(85		)	#
Other expenses	248		248		—			—
General and administrative expense										585		617		(32		)	(5	)
Total expenses	1,985		1,760		225			13		1,891		1,811		80			4
Income before income tax provision	217		217		—			—
Pretax income										195		216		(21		)	(10	)
Income tax provision	19		43		(24		)	(56	)	4		51		(47		)	(92	)
Net income	$	198	$	174	$	24		14		$	191	$	165	$	26		16	%

# Variance of 100% or greater.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Overall

Consolidated net income for the three months ended ~~September 30, 2007~~March 31, 2008 was ~~$198~~$191 million, up ~~$24~~$26 million, or ~~14%~~16%, ~~from $174 million~~as compared to the same period a year ago. Included in consolidated net income for the three months ended ~~September 30, 2006. This increase was~~March 31, 2008 were pretax net realized investment losses of $24 million, primarily due to ~~recognizing a $21~~the impairment of three Alt-A mortgage-backed securities, compared to pretax net realized investment gains of $9 million ~~tax benefit resulting from our plan to begin repatriating Threadneedle earnings through dividends. Income before income tax provision was $217 million for both~~in the three months ended ~~September 30, 2007 and 2006. Total revenues~~March 31, 2007. Also included in consolidated net income for the three months ended ~~September 30,~~March 31, 2007 ~~were $2.2 billion, up $225~~was $55 million of after-tax non-recurring separation costs.

Financial markets drove a number of impacts to our results, negatively impacting pretax earnings by $81 million in the three months ended March 31, 2008, compared to a positive impact of $24 million in the three months ended March 31, 2007. The pretax impact of equity market declines to management and financial advice fees and the amortization of deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) was a negative $22 million and $27 million, respectively, compared to a positive impact on the amortization of DAC and DSIC of $2 million in the year-ago period. Other pretax market impacts included an increase in the cost of providing for variable annuity living benefit guarantees, after hedging and the estimated impact on DAC and DSIC amortization, of $7 million, compared to a benefit of $12 million in the year-ago period; lower short-term interest rates on our cash and cash equivalent positions, which resulted in a negative impact of $9 million in the current period; and losses on our hedge fund and seed money investments of $16 million, compared to gains of $10 million in the year-ago period.

We also recognized $38 million of tax benefits in the three months ended March 31, 2008.

Net Revenues

Net revenues increased $59 million, or ~~11%~~3%, ~~from $2.0~~to $2.1 billion for the three months ended ~~September 30, 2006. The~~March 31, 2008.

Management and financial advice fees increased in the three months ended March 31, 2008 to $791 million, up $69 million, or 10%, from $722 million in the same period a year ago. This increase was led by an increase in ~~total revenues reflected strong growth~~planning fees due to accelerated financial plan delivery standards, and net increases in ~~fee-based businesses~~wrap account assets of 10%, which increased management and financial advice fees in our Advice & Wealth Management segment by $61 million. Variable annuity account assets increased 6% over the prior year driven by strong net inflows, resulting in an increase in fees of $11 million in the Annuities segment. Overall, managed assets decreased 5% from the same period in the prior year, as the increases in wrap accounts and variable annuity account assets were offset by decreases in RiverSource and Threadneedle managed assets.

Distribution fees were $433 million, up $15 million, or 4%, as positive flows for wrap account balances and variable ~~accounts, market appreciation and continued advisor productivity gains.~~ annuities were partially offset by a decline in cash sales.

Net investment income ~~was positively impacted~~decreased $72 million, or 14%, to $460 million, primarily driven by ~~income from hedges for variable annuity living benefits,~~decreased volume in fixed annuities and certificates and net realized investment losses, partially ~~offset by expected declines in annuity fixed account and certificate balances. The increase in total revenues was~~ offset by an increase in total expenses due to higher benefits, claims, losses and settlement expenses due to market volatility on variable annuity living benefit reserves, higher DAC amortization resulting from our annual detailed review of DAC valuation assumptions (“DAC unlocking”) and higher field compensation. The strong net ~~inflows in wrap accounts and annuity variable accounts and declining annuity fixed account and certificate balances reflect our strategic shift to less capital intensive, fee-based products.~~

Third quarter results reflect the impact of DAC unlocking. In the third quarter of 2007, DAC unlocking resulted in a $30 million negative impact compared to a $25 million benefit in the prior year period. Income in both the third quarter of 2007 and 2006 was impacted by non-recurring separation costs of $60 million and $87 million, respectively ($39 million and $57 million, respectively, after-tax).

~~Revenues~~

Management, financial advice and service fees increased $158 million, or 22%, to $878 million for the third quarter of 2007, primarily driven by the growth in our fee-based businesses of our AA&I segment. Our AA&I segment had increases in fees related to brokerage and variable annuities of $64 million and $52 million, respectively. Wrap account assets increased 33% and annuity variable account assets increased 31% over the prior year quarter driven by strong net inflows and market appreciation.

Distribution fees for the three months ended September 30, 2007 were $352 million, up $52 million, or 17%, from the year-ago period, driven by strong advisor cash sales. Total cash sales were up 21% from the year-ago period. Distribution fees were also positively impacted by market appreciation.

~~Net investment income for the three months ended September 30, 2007 increased $10 million, or 2%, over the year-ago period. Net~~ investment income attributable to hedges for variable annuity living benefits was $57 million in the third quarter of 2007, compared to $3 million in the third quarter of 2006. This increase, in addition to a $23 million decrease in the allowance for loan losses on commercial mortgage loans, was partially offset by lower net investment income due to declining average account balances in annuity fixed accounts and certificates and lower investment income on other trading securities. As expected, annuity fixed accounts and certificate balances are declining as clients choose other products in the current interest rate environment and as we focus on fee-based products.benefits. Included in net investment income were net pretax realized investment ~~gains~~losses on Available-for-Sale securities of ~~$15~~$24 million in the ~~third quarter of 2007~~three months ended March 31, 2008 compared to ~~$14~~net pretax realized investment gains of $9 million in the same period of ~~2006. Net gains on trading securities and equity method investments in hedge funds decreased $14 million from the prior year quarter.~~2007. Net investment income related to derivatives used to hedge certain expense line items increased ~~$46~~$62 million, which included a ~~$54~~$107 million increase related to derivatives used to hedge benefits, claims, losses and settlement expenses for variable annuity living benefits and ~~an $8~~a $45 million decrease related to derivatives used to hedge interest credited expenses for equity indexed annuities and banking and deposit interest expense for stock market ~~certificates and equity indexed annuities.~~certificates.

Premiums increased $2$8 million, or 1%3%, to ~~$246 million for the third quarter of 2007 compared to the same period in 2006. In the third quarter of 2006, a review of our long-term care reinsurance arrangement resulted in an~~$265 million. This increase ~~to premiums of $15 million. Excluding this impact, premiums increased $17 million, which~~ was primarily ~~driven by premium increases of $11 million~~attributable to a 6% year-over-year increase in auto ~~and~~& home ~~insurance resulting from increased~~ policy counts.

Other revenues ~~increased $3~~decreased $10 million, or 2%6%, to ~~$174 million for the third quarter of 2007 primarily~~$157 million. This decrease was due to ~~higher~~a decline in other revenues related to certain consolidated limited partnerships, offset partially by an increase in our guaranteed benefit rider fees ~~from~~on variable ~~annuity riders~~annuities and ~~cost of insurance~~growth in cost-of-insurance fees for variable universal life/universal life ~~(“VUL/UL”) insurance, largely offset by~~insurance.

Banking and deposit interest expense decreased $49 million, or 71%, due to a decrease in certificate balances, which declined 16% from the same period in the prior year, and lower ~~revenues~~crediting rates accrued on ~~certain consolidated limited partnerships.~~stock market certificates and banking deposits.

Expenses

Total expenses ~~in the third quarter reflect the impact of DAC unlocking. For the third quarter of 2007, we recorded a net expense from unlocking of $30~~increased $80 million, ~~comprised of $16 million additional DAC amortization expense and a $14 million increase in benefits, claims, losses and settlement expenses. DAC unlocking~~or 4%, to $1.9 billion for the third quarter of 2006 resulted in a $25 million net benefit, comprised of a $38 million benefit in DAC amortization expense, a $12 million increase in benefits, claims, losses and settlement expenses and a $1 million decrease in other revenues.three months ended March 31, 2008.

The DAC unlocking net expense of $30 million for the third quarter of 2007 consisted of a $35 million increase in expense from updating product persistency assumptions, a $13 million decrease in expense from updating assumptions related to separate account fee levels and net variable annuity rider charges and an $8 million increase in expense from updating all other assumptions. The DAC unlocking net benefit of $25 million for the third quarter 2006 consisted of a $25 million benefit from modeling improvements inDistribution expenses increased product persistency, a $15 million benefit from modeling improvements in mortality, an $8 million increase from modeling lower variable product fund fee revenue, an $8 million increase from modeling changes related to Variable Life Second to Die insurance and a $1 million benefit from other miscellaneous items.

~~Compensation and benefits–field increased $94~~$63 million, or ~~22%~~13%. The increase ~~primarily reflects higher commissions paid~~was driven by ~~overall business growth~~higher sales compensation resulting from product mix shift and ~~increases in advisor productivity, as reflected by 14%~~ growth in ~~total GDC and higher~~our franchisee advisor ~~assets under management.~~platform.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Interest credited to ~~account values~~fixed accounts decreased ~~$35~~$39 million, or ~~11%~~18%, reflecting a decrease related ~~to annuities of $26 million and a decrease related to certificates of $10 million. The decrease related to annuities was primarily attributable~~ to a continued decline in fixed annuity account ~~balances. The~~balances as well as a decrease ~~in interest credited to certificates was primarily attributable to declining balances and~~from the impact of lower ~~stock market participation costs.~~crediting rates on equity indexed annuities.

Benefits, claims, losses and settlement expenses increased ~~$150~~$156 million, or ~~64%.~~ In62%, driven by an increase in the ~~third quarter~~cost of ~~2007, reserves~~ providing for guaranteed benefits associated with our variable annuity ~~business~~living benefits, which increased by ~~$132~~$151 million, primarily due to changes in financial market ~~factors,~~factors.

The amortization of DAC increased $20 million, or 15%, to $154 million. This increase was attributable to the estimated impact of the current quarter’s market decline on estimated gross profit in future periods, and growth in the volume of variable annuity business, offset in part by a ~~$9 million related change~~decrease in ~~DSIC~~. ~~The related hedge impact was a $57 million increase to~~amortization driven by the increased cost of providing for variable annuity guarantees, net ~~investment income~~of hedging. Amortization of DAC in the ~~third~~first quarter of ~~2007. For~~2007 was favorably impacted by adjustments to DAC associated with our Protection segment.

Interest and debt expense for the three months ended ~~September 30, 2007, benefits, claims, losses and settlement expenses also included $14~~March 31, 2008 decreased $3 million, ~~related~~or 10%, from the year-ago period due to ~~DAC unlocking compared to $12~~the deconsolidation of $225 million of non-recourse debt of a collateralized debt obligation in the ~~prior year period.~~

~~Amortization of DAC increased $41 million, or 47%, primarily due to DAC unlocking. In the third~~fourth quarter of 2007, DAC unlocking resulted in an increase to amortization of $16 million compared to a decrease to amortization of $38 million in the year-ago period. Underlying increases in DAC amortization driven by business growth were offset by lower DAC amortization resulting from the mark-to-market of variable annuity living benefit riders.2007.

Separation costs incurred in ~~both the third quarter of~~ 2007 ~~and 2006~~ were primarily associated with separating and reestablishing our technology platforms. ~~We expect to incur approximately $25 million to $30 million in~~All separation costs ~~in the fourth quarter of 2007, reflecting all remaining costs from the Separation, which was completed~~were incurred as of ~~September 30,~~December 31, 2007.

~~Other~~General and administrative expense decreased 5%, or $32 million, to $585 million as a result of our cost control efforts, lower legal and regulatory expenses, ~~were consistent with the prior year period at $248 million. Decreases~~and a decline in ~~other~~ expenses ~~attributable~~related to certain consolidated limited ~~partnerships~~partnerships. These declines were partially offset by ~~increases in professional and consultant fees related to~~ increased ~~spending on investment initiatives.~~technology-related costs.

Income Taxes

Our effective tax rate ~~was 8.8%~~decreased to 2.1% for the three months ended ~~September 30, 2007,~~March 31, 2008, compared to ~~19.8%~~23.6% for the three months ended ~~September 30, 2006. The~~March 31, 2007 primarily due to $38 million of tax benefits related to changes in the status of current audits and closed audits and the level of tax advantaged items relative to pretax income. We expect our effective tax rate for the ~~three months ended September 30, 2007 was impacted by a $21 million tax benefit related~~full year 2008 to ~~our plan~~be in the 20% to ~~begin repatriating earnings of certain Threadneedle entities through dividends and a $7 million tax benefit related to the finalization of the prior year tax return.~~ The effective tax rate for the three months ended September 30, 2006 was impacted by a $13 million tax benefit related to the finalization of the prior year tax return. The effective tax rates are also impacted by the levels of pretax income relative to tax advantaged items, including the dividends received deduction, in each period.22% range.

On September 25, 2007, the IRS issued Revenue Ruling 2007-61 in which it announced that it intends to issue regulations with respect to certain computational aspects of the Dividends Received Deduction (“DRD”) related to separate account assets held in connection with variable contracts of life insurance companies and has added the project to the 2007-2008 Priority Guidance Plan. Revenue Ruling 2007-61 suspended a revenue ruling issued in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time, but they may result in the elimination of some or all of the separate account DRD tax benefit that we receive. Management believes that it is likely that any such regulations would apply prospectively only. ~~For the nine months ended September 30, 2007, we recorded a benefit of approximately $35 million related to the current year’s separate account DRD.~~

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Results of Operations by Segment

for the Three Months Ended ~~September 30,~~March 31, 2008 and 2007 ~~Compared to Three Months Ended September 30, 2006~~

The following tables present summary financial information by segment and a reconciliation to the consolidated totals derived from Note 1314 to our Consolidated Financial Statements for the three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006:~~2007:

Three Months Ended
September 30, 2007

Three Months Ended
September 30, 2006

Percent Share
of Total

Percent Share
of Total

(in millions, except percentages)

Total revenues

Asset Accumulation and Income

$
1,619

74
%
$
1,423

72
%
Protection

518

24

498

25

Corporate and Other

77

3

67

3

Eliminations

(12
)
(1
)
(11
)
—

Consolidated total revenues

$
2,202

100
%
$
1,977

100
%

Total expenses

Asset Accumulation and Income

$
1,360

69
%
$
1,231

70
%
Protection

445

22

347

20

Corporate and Other

192

10

193

11

Eliminations

(12
)
(1
)
(11
)
(1
)
Consolidated total expenses

$
1,985

100
%
$
1,760

100
%

Pretax segment income (loss)

Asset Accumulation and Income

$
259

119
%
$
192

88
%
Protection

73

34

151

70

Corporate and Other

(115
)
(53
)
(126
)
(58
)
Consolidated income before income tax provision

$
217

100
%
$
217

100
%

��	Three Months Ended March 31,
	2008			Percent Share of Total		2007			Percent Share of Total
	(in millions, except percentages)
Total net revenues
Advice & Wealth Management	$	936		45	%	$	906		45	%
Asset Management	355			17		411			20
Annuities	564			27		526			26
Protection	492			24		481			24
Corporate & Other	9			—		14			—
Eliminations	(270		)	(13	)	(311		)	(15	)
Total net revenues	$	2,086		100	%	$	2,027		100	%

Total expenses
Advice & Wealth Management	$	872		46	%	$	850		47	%
Asset Management	337			18		365			20
Annuities	522			27		408			23
Protection	390			21		361			20
Corporate & Other	40			2		138			7
Eliminations	(270		)	(14	)	(311		)	(17	)
Total expenses	$	1,891		100	%	$	1,811		100	%

Pretax income (loss)
Advice & Wealth Management	$	64		33	%	$	56		26	%
Asset Management	18			9		46			21
Annuities	42			22		118			55
Protection	102			52		120			55
Corporate & Other	(31		)	(16	)	(124		)	(57	)
Pretax income	$	195		100	%	$	216		100	%

2627

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

~~Asset Accumulation~~Advice & Wealth Management

Our Advice & Wealth Management segment provides financial planning and ~~Income~~advice, as well as full service brokerage and banking services, primarily to retail clients, through our financial advisors. Our affiliated advisors utilize a diversified selection of both proprietary and non-proprietary products to help clients meet their financial needs.

The following table presents the results of operations of our ~~AA&I~~Advice & Wealth Management segment for the three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006:~~2007:

Three Months Ended September 30,

2007

2006

Change

(in millions, except percentages)

Revenues

Management, financial advice and service fees

$
789

$
657

$
132

20
%
Distribution fees

323

272

51

19

Net investment income

456

443

13

3

Other revenues

51

51

—

—

Total revenues

1,619

1,423

196

14

Expenses

Compensation and benefits-field

448

370

78

21

Interest credited to account values

246

281

(35
)
(12
)
Benefits, claims, losses and settlement expenses

150

3

147

#

Amortization of deferred acquisition costs

60

98

(38
)
(39
)
Interest and debt expense

3

4

(1
)
(25
)
Other expenses

453

475

(22
)
(5
)
Total expenses

1,360

1,231

129

10

Pretax segment income

$
259

$
192

$
67

35

	Three Months Ended March 31,
	2008		2007		Change
	(in millions, except percentages)
Revenues
Management and financial advice fees	$	367	$	306	$	61		20	%
Distribution fees	517		540		(23		)	(4	)
Net investment income	52		108		(56		)	(52	)
Other revenues	20		16		4			25
Total revenues	956		970		(14		)	(1	)
Banking and deposit interest expense	20		64		(44		)	(69	)
Total net revenues	936		906		30			3

Expenses
Distribution expenses	585		562		23			4
General and administrative expense	287		288		(1		)	—
Total expenses	872		850		22			3
Pretax income	$	64	$	56	$	8		14	%

#~~Variance of 100% or greater.~~Our Advice & Wealth Management segment pretax income was $64 million, up 14% from $56 million.

~~Overall~~Net Revenues

Our AA&I segment results for the three months ended September 30, 2007 were led by the growth in our fee-based businesses, primarily driven by strong wrap and annuity variable account inflows, market appreciation and continued advisor productivity gains. These improvements to profitability were partially offset by the impact of lower account balances in fixed annuity and certificate products, higher field compensation and the negative impact of the mark-to-market on variable annuity benefit riders which was partially offset by the related hedges.

~~Revenues~~

Management and financial advice ~~and service~~ fees increased ~~primarily as a result of growth in our variable annuity account assets and wrap account assets. Management, financial advice and service fees related to variable annuities increased $52~~$61 million, or ~~35%~~20%, ~~and were driven by higher levels of annuity variable account values, which increased 31%~~as compared to ~~$51.6 billion at September 30, 2007. Our brokerage business had an~~the year-ago period. The increase ~~in management, financial advice and service fees of $64 million, or 30%, driven~~was led by net increases in wrap account assets of ~~33%~~10% from March 31, 2007 to ~~$92.9 billion at September 30, 2007. Overall, managed assets increased 11% over~~March 31, 2008 as continued positive net flows were partially offset by market declines. Also contributing to the ~~prior year quarter.~~

increase was an increase in planning fees resulting from accelerated financial plan delivery standards. The ~~growth~~decline in distribution fees ~~was driven by our brokerage business, which had an increase~~ of ~~$55~~$23 million, or ~~25%~~4%, ~~compared to~~reflected a decrease in commissions as a result of a decline in cash sales, down 23% from the year-ago ~~period primarily driven by strong advisor cash sales. Distribution fees were also positively impacted by market appreciation.~~

period. Net investment income ~~increased $13~~decreased $56 million, ~~compared~~or 52%, due to the ~~third quarter~~impact of 2006, primarily due to an increase of $46 million related to derivatives used to hedge certain expense line items and a $23 million decrease in the allowance for loan losses on commercial mortgage loans, partially offset by lower net investment income due to declining average account balances in annuity fixed accounts and certificates and lower investment income on trading securities. The $46 million increase related to derivatives included a $54 million increase related to derivatives used to hedge benefits, claims, losses and settlement expenses for variable annuity living benefits and an $8 million decrease related to derivatives used to hedge interest credited expenseshedges for stock market certificates and ~~equity indexed annuities. Net realized investment gains on Available-for-Sale securities were $12~~lower average account balances in certificate products. Banking and deposit interest expense decreased $44 million, ~~in both the third quarter of 2007 and 2006.~~

~~Other revenues remained constant at $51 million compared~~or 69%, due to ~~the year-ago period. A~~a decrease in ~~revenues~~certificate balances and lower crediting rates accrued on certain consolidated limited partnerships was largely offset by an increase in fees from variable annuity riders, as well as an increase in other revenues from a direct investment recovery and an increase in other revenues related to the sale of a property partnership.stock market certificates.

Expenses

~~The~~Total expenses increased $22 million, or 3%, driven by an increase in distribution expenses as a result of higher sales compensation resulting from product mix shift and ~~benefits–field reflects higher commissions paid driven~~growth in our franchisee advisor platform. General and administrative expense was flat compared to the prior year as increased technology costs were offset by ~~strong sales activity~~lower legal and ~~higher GDC.~~regulatory costs.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Asset Management

Our Asset Management segment provides investment advice and investment products to retail and institutional clients.

The following table presents the results of operations of our Asset Management segment for the three months ended March 31, 2008 and 2007:

	Three Months Ended March 31,
	2008			2007		Change
	(in millions, except percentages)
Revenues
Management and financial advice fees	$	296		$	297	$	(1	)	—	%
Distribution fees	70			82		(12		)	(15	)
Net investment income	(4		)	17		(21		)	#
Other revenues	(5		)	19		(24		)	#
Total revenues	357			415		(58		)	(14	)
Banking and deposit interest expense	2			4		(2		)	(50	)
Total net revenues	355			411		(56		)	(14	)

Expenses
Distribution expenses	118			113		5			4
Amortization of deferred acquisition costs	8			10		(2		)	(20	)
General and administrative expense	211			242		(31		)	(13	)
Total expenses	337			365		(28		)	(8	)
Pretax income	$	18		$	46	$	(28	)	(61	)%

# Variance of 100% or greater.

Our Asset Management segment pretax income was $18 million, a decline of 61% from $46 million.

Net Revenues

Net revenues decreased $56 million, or 14%. Contributing to this decline was a decrease in ~~interest credited~~distribution fees due to ~~account values reflects~~continued client movement to wrap accounts, which are included in the Advice & Wealth Management segment; a decrease in net investment income, due to losses on the value of seed money investments, driven by a declining market; and a decline in other revenues, due to decreases in revenue related to ~~annuities of $26~~certain consolidated limited partnerships which had a corresponding decrease in expenses.

Expenses

Total expenses decreased $28 million, ~~and~~or 8%, primarily due to a decrease in general and administrative expense. The primary driver of this decline was a decrease in expenses related to ~~certificates~~certain consolidated limited partnerships, which corresponds with the other revenue decline noted above.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Annuities

Our Annuities segment provides RiverSource Life variable and fixed annuity products to our retail clients primarily through our Advice & Wealth Management segment and to the retail clients of ~~$10~~unaffiliated advisors through third-party distribution.

The following table presents the results of operations of our Annuities segment for the three months ended March 31, 2008 and 2007:

	Three Months Ended March 31,
	2008		2007		Change
	(in millions, except percentages)
Revenues
Management and financial advice fees	$	126	$	115	$	11		10	%
Distribution fees	70		61		9			15
Net investment income	323		311		12			4
Premiums	18		22		(4		)	(18	)
Other revenues	27		17		10			59
Total net revenues	564		526		38			7

Expenses
Distribution expenses	45		45		—			—
Interest credited to fixed accounts	143		183		(40		)	(22	)
Benefits, claims, losses and settlement expenses	181		33		148			#
Amortization of deferred acquisition costs	94		89		5			6
General and administrative expense	59		58		1			2
Total expenses	522		408		114			28
Pretax income	$	42	$	118	$	(76	)	(64	)%

# Variance of 100% or greater.

Our Annuities segment pretax income was $42 million, down 64% from $118 million. ~~The decrease~~

Net Revenues

Management and financial advice fees related to variable annuities increased in the first three months of 2008, driven by positive net flows, resulting in higher variable annuity balances, up 6%, to $54.4 billion, partially offset by market declines. The increase in distribution fees was primarily ~~attributable~~driven by positive net flows in variable annuity account balances. Net investment income increased due to ~~the continued decline in~~income related to guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”) hedges, partially offset by declining average fixed annuity account ~~balances.~~balances and $20 million in net realized investment losses. The ~~decrease~~decline in ~~interest credited to certificates~~premiums was ~~primarily~~ attributable to ~~declining balances and~~ lower ~~stock market participation costs.~~volumes related to immediate annuities with life contingencies. The increase in other revenues was due to an increase in our guaranteed benefit rider fees on variable annuities, driven by volume increases.

~~Benefits,~~Expenses

Total expenses increased $114 million, or 28%. The increase in benefits, claims, losses and settlement expenses ~~increased $147 million~~was due to ~~$150 million for~~ the ~~three months ended September 30, 2007. In~~unfavorable impact of financial market factors increasing the ~~third quarter~~cost of ~~2007, reserves~~ providing for guaranteed benefits associated with our variable annuity ~~business increased by $132 million primarily~~living benefits riders. The increase in amortization of DAC was due to ~~changes~~the estimated impact of the current quarter’s market decline on estimated gross profit in ~~financial market factors,~~future periods and an increase in the volume of variable annuity business, offset in part by a ~~$9 million related change in DSIC. The related hedge impact was a $57 million increase to net investment income in the third quarter of 2007.~~

~~DAC amortization decreased $38 million, or 39%, to $60 million for the three months ended September 30, 2007, primarily due to a $34 million~~ decrease in ~~DAC~~ amortization driven by the ~~mark-to-market of~~increased provision for variable annuity ~~benefit riders and an $18 million favorable impact from DAC unlocking. These decreases~~guaranteed living benefits, net of hedging. The increases in expense were partially offset by increases in DAC amortization from growth in business volumes and the recurring impact of adopting Statement of Position (“SOP”) 05-1 “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts.” The impact of DAC unlocking was a $4 million benefit for the three months ended September 30, 2007 compared to $14 million unfavorable for the year-ago period.

~~Other expenses, which include compensation and benefits–non-field, decreased $22 million, or 5%, to $453 million for the third quarter of 2007, primarily due to~~ a decrease in ~~expenses attributable~~interest credited to ~~certain consolidated limited partnerships.~~fixed accounts, driven by declining fixed annuity account balances, down 16% from the year-ago period, and variable annuity sub-account balances, down 5% from the year-ago period. Lower crediting rates on equity indexed annuities also contributed to the decline in interest credited to fixed accounts.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Protection

Our Protection segment offers a variety of protection products to address the identified protection and risk management needs of our retail clients including life, disability income and property-casualty insurance.

The following table presents the results of operations of our Protection segment for the three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006:~~2007:

	Three Months Ended September 30,										Three Months Ended March 31,
	2007		2006			Change					2008		2007		Change
	(in millions, except percentages)										(in millions, except percentages)
Revenues
Management, financial advice and service fees	$	24	$	20		$	4		20	%
Management and financial advice fees											$	15	$	16	$	(1	)	(6	)%
Distribution fees	29		27			2			7		27		25		2			8
Net investment income	93		87			6			7		83		89		(6		)	(7	)
Premiums	254		249			5			2		254		243		11			5
Other revenues	118		115			3			3		113		108		5			5
Total revenues	518		498			20			4
Total net revenues											492		481		11			2

Expenses
Compensation and benefits-field	24		22			2			9
Interest credited to account values	36		36			—			—
Distribution expenses											14		14		—			—
Interest credited to fixed accounts											35		34		1			3
Benefits, claims, losses and settlement expenses	233		230			3			1		226		218		8			4
Amortization of deferred acquisition costs	68		(11		)	79			#		52		35		17			49
Other expenses	84		70			14			20
General and administrative expense											63		60		3			5
Total expenses	445		347			98			28		390		361		29			8
Pretax segment income	$	73	$	151		$	(78	)	(52	)
Pretax income											$	102	$	120	$	(18	)	(15	)%

#~~Variance of 100% or greater.~~

~~Overall~~

Our Protection segment results for the three months ended September 30, 2007 were impacted unfavorably by DAC unlocking and a decrease in long-term care insurance premiums, partially offset by growth in our auto and home insurance business. We continue to gain market share in our auto and home insurance business as a result of our Costco alliance. Auto and home insurance policies in-force generated through this alliance were uppretax income was $102 million, down 15% ~~at September 30, 2007 compared to September 30, 2006. Total life insurance in-force increased 8% to $184.3 billion at September 30, 2007.~~from $120 million.

Net Revenues

~~Premiums increased $5~~Net revenues were $492 million, an increase of $11 million, or 2%, to $254 million for the three months ended September 30, 2007, primarily due to higher volumes in our auto and home insurance products, as well as slightly higher premiums for traditional life and disability income products, partially offset by decreases in premiums for long-term care insurance. Auto and home average policy counts increased 7% over the third quarter of 2006. The decrease in long-term care insurance premiums. This increase was primarily ~~due to~~the result of a ~~review of our long-term care reinsurance arrangement during the third quarter of 2006, which resulted~~6% increase in ~~an increase to premiums of $15 million during that quarter.~~

auto & home policy counts. The increase in other revenues, due to higher cost-of-insurance fees for variable universal life/universal life insurance, as a result of volume increases, was offset by a decrease in ~~the third quarter of 2007 was driven by an increase in cost of insurance revenues for VUL/UL insurance products.~~net investment income due to net realized investment losses.

Expenses

~~Benefits,~~Total expenses were $390 million, an increase of $29 million, or 8%. The increase was due to an increase in benefits, claims losses and settlement expenses ~~increased $3~~resulting from higher auto & home claims and increases to auto & home reserves as a result of volume increases, partially offset by an unfavorable $12 million ~~or 1%,~~adjustment in reserves for disability income insurance claims in the three months ended March 31, 2007. Also contributing to ~~$233 million~~the increase in total expense was higher DAC amortization. DAC amortization for the three months ended ~~September 30, 2007, primarily due to higher auto and home and long-term care insurance benefits. In~~March 31, 2008 increased as a result of the ~~third quarter of 2007, these expenses included $11 million related to DAC unlocking compared to $12 million for the prior year period.~~

~~The increase in DAC amortization was largely due to DAC unlocking, primarily related to VUL/UL products. The~~ impact of the current quarter market decline on estimated gross profit in future periods. DAC ~~unlocking was $20 million unfavorable~~amortization for the three months ended ~~September 30,~~March 31, 2007 ~~compared to a $52 million benefit for the year-ago period.~~was reduced by favorable adjustments from recognizing increases in certain policyholder charges on select policies, as well as other model enhancements.

~~Other expenses, which include compensation and benefits–non-field, increased $14 million, or 20%, over the prior year quarter primarily due to higher sales and marketing expenses.~~31

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Corporate ~~and~~& Other

The following table presents the results of operations of our Corporate & Other segment for the three months ended ~~September 30, 2007~~March 31, 2008 and ~~2006:~~2007:

	Three Months Ended September 30,											Three Months Ended March 31,
	2007			2006			Change					2008			2007			Change
	(in millions, except percentages)											(in millions, except percentages)
Revenues
Management, financial advice and service fees	$	68		$	46		$	22		48	%
Distribution fees	—			1			(1		)	#
Net investment income	4			14			(10		)	(71	)	$	8		$	9		$	(1	)	(11	)%
Other revenues	5			6			(1		)	(17	)	2			7			(5		)	(71	)
Total revenues	77			67			10			15		10			16			(6		)	(38	)
Banking and deposit interest expense												1			2			(1		)	(50	)
Total net revenues												9			14			(5		)	(36	)

Expenses
Compensation and benefits-field	57			42			15			36
Interest and debt expense	27			30			(3		)	(10	)	26			29			(3		)	(10	)
Separation costs	60			87			(27		)	(31	)	—			85			(85		)	#
Other expenses	48			34			14			41
General and administrative expense												14			24			(10		)	(42	)
Total expenses	192			193			(1		)	(1	)	40			138			(98		)	(71	)
Pretax segment loss	$	(115	)	$	(126	)	$	11		9
Pretax loss												$	(31	)	$	(124	)	$	93		75	%

#Variance of 100% or greater.

~~Overall~~

Our Corporate & Other pretax segment loss was ~~$115~~$31 million, ~~for the three months ended September 30, 2007,~~an improvement of $93 million compared to ~~$126 million for the three months ended September 30, 2006. The lower~~a pretax segment loss ~~in the third quarter~~ of ~~2007 was primarily due to higher financial planning fees and lower separation costs, partially offset by lower net investment income and higher compensation and benefits–field and other expenses.~~

~~Revenues~~

~~Management, financial advice and service fees increased $22 million, or 48%, to $68~~$124 million for ~~the three months ended September 30, 2007, primarily due to higher financial planning fees due to accelerated financial plan delivery standards.~~

Net investment income decreased $10 million, or 71%, to $4 million for the three months ended September 30, 2007, primarily due to the mark-to-market of equity market hedges and trading securities.

~~Expenses~~

The increase in compensation and benefits–field in the third quarter of 2007 relates to higher compensation due to higher financial planning fees resulting from accelerated financial plan delivery standards.

Separation costs incurred in the third quarter of 2007 and 2006 were primarily associated with separating and reestablishing our technology platforms. We expect to incur approximately $25 million to $30 million in costs in the fourth quarter of 2007, reflecting all remaining costs from the Separation, which was completed as of September 30, 2007.

Other expenses, which include compensation and benefits–non-field, increased $14 million, or 41%, from the year-ago period consisting of higher accrued management incentive compensation in recognition of year-to-date performance and higher expenses related to financial planning.

~~Consolidated Results of Operations~~

~~Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006~~

~~The following table presents our consolidated results of operations for the nine months ended September 30, 2007 and 2006:~~

Nine Months Ended September 30,

2007

2006

Change

(in millions, except percentages)

Revenues

Management, financial advice and service fees

$
2,532

$
2,151

$
381

18
%
Distribution fees

1,111

926

185

20

Net investment income

1,555

1,638

(83
)
(5
)
Premiums

725

693

32

5

Other revenues

524

571

(47
)
(8
)
Total revenues

6,447

5,979

468

8

Expenses

Compensation and benefits:

Field

1,546

1,287

259

20

Non-field

1,056

974

82

8

Total compensation and benefits

2,602

2,261

341

15

Interest credited to account values

872

948

(76
)
(8
)
Benefits, claims, losses and settlement expenses

832

685

147

21

Amortization of deferred acquisition costs

387

368

19

5

Interest and debt expense

93

83

10

12

Separation costs

208

238

(30
)
(13
)
Other expenses

775

802

(27
)
(3
)
Total expenses

5,769

5,385

384

7

Income before income tax provision

678

594

84

14

Income tax provision

119

134

(15
)
(11
)
Net income

$
559

$
460

$
99

22

~~Overall~~

Consolidated net income for the nine months ended September 30, 2007 was $559 million, up $99 million, or 22%, from $460 million for the nine months ended September 30, 2006. This income growth reflected strong growth in fee-based businesses driven by strong net inflows in wrap accounts and annuity variable accounts, market appreciation and continued advisor productivity gains. These positives were partially offset by higher benefits, claims, losses and settlement expenses due to market volatility on variable annuity living benefit reserves, which were partially offset by the related hedges in net investment income, higher field compensation and lower net investment income.

Income for both the nine months ended September 30, 2007 and 2006 was impacted by DAC unlocking. In the 2007 period, DAC unlocking resulted in a $30 million negative impact compared to a $25 million benefit in the prior year period. This impact was partially offset by a $28 million unfavorable adjustment related to auto and home products recognized in the 2006 period. Income for both the nine months ended September 30, 2007 and 2006 was impacted by non-recurring separation costs of $208 million and $238 million, respectively ($135 million and $155 million, respectively, after-tax).

~~Revenues~~

Management, financial advice and service fees increased $381 million, or 18%, primarily driven by the growth in our fee-based businesses of our AA&I segment. Our AA&I segment had increases in fees related to brokerage and variable annuities of $152 million and $139 million, respectively. Wrap account assets increased 33% and annuity variable account assets increased 31% over the prior year period driven by strong net inflows and market appreciation. Overall, managed assets increased 11% over the prior year period. Management, financial advice and service fees related to Threadneedle increased $44 million, primarily due to the favorable impact of the dollar weakening over the prior year period. These increases were partially offset by a decline in fees relative to the prior year period of $27 million due to the sale of our defined contribution recordkeeping business in the second quarter of 2006.

Distribution fees for the nine months ended September 30, 2007 were $1.1 billion, up $185 million, or 20%, from the year-ago period driven by strong advisor cash sales, including an increase in sales of direct investments as clients reinvested proceeds from real estate investment trust liquidations and strong net inflows into Ameriprise Financial and SAI wrap accounts. Total cash sales were up 17% from the year-ago period. Distribution fees were also positively impacted by market appreciation.

Net investment income for the nine months ended September 30, 2007 decreased $83 million, or 5%, from the prior year period, primarily driven by lower average account balances in annuity fixed accounts and certificates and lower investment income on trading securities, partially offset by an increase in net investment income attributable to hedges for variable annuity living benefits, net investment income related to Ameriprise Bank and a $23 million decrease in the allowance for loan losses on commercial mortgage loans. As expected, annuity fixed account and certificate balances are declining as clients choose other products in the current interest rate environment and as we focus on fee-based products. Included in net investment income were net realized investment gains on Available-for-Sale securities of $26 million and $24 million for the nine months ended September 30, 2007 and 2006, respectively. Net gains on trading securities and equity method investments in owned hedge funds were $30 million lower for the nine months ended September 30, 2007 compared to the prior year period. Net investment income related to derivatives used to hedge certain expense line items increased $49 million, which included a $45 million increase related to derivatives used to hedge benefits, claims, losses and settlement expenses for variable annuity living benefits and a $4 million increase related to derivatives used to hedge interest credited expenses for stock market certificates and equity indexed annuities.

~~Premiums increased $32 million, or 5%, to $725 million for the nine months ended September 30, 2007 compared to~~ the same period in 2006. This increase was driven by premium increases of $35 million in auto and home insurance resulting from increased policy counts. A $17 million decrease in long-term care insurance was offset by increases in traditional life and disability income insurance.2007. The ~~decrease in long-term care insurance premiums~~improvement was primarily due to a ~~review~~decrease in separation costs of $85 million, as the separation from American Express was completed in 2007. Also contributing to the improvement was a decrease in general and administrative expense which was due to a decline in compensation expense resulting from our ~~long-term care reinsurance arrangement during the third quarter of 2006, which resulted in an increase to premiums of $15 million during that quarter.~~cost control efforts.

~~Other revenues decreased $47 million, or 8%, to $524 million for the nine months ended September 30, 2007, compared to the same period in 2006. This decrease was primarily related to the inclusion~~Market Risk

Equity market and interest rate fluctuations can have a significant impact on our results of $66 million in proceeds from the sale of our defined contribution recordkeeping business and $18 million from recognizing previously deferred cost of insurance revenues in the prior year period. Excluding these items, other revenues increased $37 million, or 8%,operations, primarily due to ~~higher~~the effects they have on the asset management and other asset-based fees ~~from~~we earn, the “spread” income generated on our annuities, banking, and face amount certificate products and universal life (“UL”) insurance products, the value of DAC and DSIC, assets associated with variable annuity ~~rider charges~~ and ~~cost of insurance charges for VUL/~~variable UL products, ~~partially offset by lower revenues related to certain consolidated limited partnerships.~~

~~Expenses~~

The increase in compensation and benefits–field primarily reflects higher commissions paid driven by overall business growth and increases in advisor productivity, as reflected by 17% growth in total GDC and higher advisor assets under management.

~~Compensation and benefits–non-field increased $82 million, or 8%, from~~ the year-ago period primarily due to higher expenses related to Ameriprise Bank, higher technology related spending on investment initiatives, as well as higher accrued incentive compensation in recognitionvalues of year-to-date performance and an increase due to the dollar weakening over the period. These increases were partially offset by lower severance costs and the elimination of expenses related to our defined contribution recordkeeping business, which was sold in the second quarter of 2006.

The decrease in interest credited to account values reflects a decrease related to annuities of $74 million primarily attributable to the continued decline in annuity fixed account balances. The impact of declining certificate balances was offset by higher crediting rates.

~~Benefits, claims, losses and settlement expenses increased $147 million, or 21%. In the third quarter of 2007, reserves providing~~liabilities for guaranteed benefits associated with our variable annuities and the values of derivatives held to hedge these benefits.

There have been no material changes in our net risk exposure to pretax income based on our sources of market risk during the three months ended March 31, 2008, except for our interest rate risk exposure related to our variable annuity ~~business~~riders. The guaranteed benefits associated with our variable annuities are GMWB, GMAB, guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) options. Each of the guaranteed benefits mentioned above guarantees payouts to the annuity holder under certain specific conditions regardless of the performance of the underlying investment assets.

Interest Rate Risk – Variable Annuity Riders

The GMAB and the non-life contingent benefits associated with the GMWB provisions create embedded derivatives which are carried at fair value separately from the underlying host variable annuity contract. Increases in interest rates reduce the fair value of the GMWB and GMAB liabilities. At March 31, 2008, if interest rates had hypothetically increased by ~~$132~~100 basis points, and remain at that level for 12 months, we estimate that the fair value of our GMWB and GMAB liabilities would decrease by $157 million ~~primarily due~~and $32 million, respectively, with a favorable impact to ~~changes~~pretax income. The GMWB and GMAB interest rate exposure is hedged with a portfolio of longer dated put and call derivatives and interest rate swaps. During the three months ended March 31, 2008, we continued to adjust the interest rate swap portfolio to reflect the sensitivity of the liabilities, as well as close down some open exposures from year end. At March 31, 2008, we estimate that for a hypothetical 100 basis point increase in ~~financial market factors, offset by~~interest rates sustained for a 12 month period, the negative impact of the derivatives on pretax income would be $208 million. Of the $208 million, $189 million is attributable to our GMWB and $19 million is attributable to our GMAB. At March 31, 2008, we estimate that the net impact on pretax income would be an unfavorable $10 million, which consists of an unfavorable impact of $32 million for GMWB and a $13 million favorable impact attributable to GMAB, and a $9 million ~~related change in DSIC. The related hedge~~positive impact ~~was a $57 million increase to net investment income in the third quarter of 2007. Expenses for the nine months ended September 30, 2007 included $14 million~~ related to DAC ~~unlocking and an unfavorable $12 million adjustment in reserves for disability income insurance claims. Expenses for~~amortization. At December 31, 2007, we estimated that the ~~nine months ended September 30, 2006 included $12 million related to DAC unlocking, a $12 million reduction to auto and home insurance reserves related to accident years 2004 and 2005 and $7 million~~net combined impact of ~~additional claims expense in connection with the recognition of previously deferred cost of insurance revenues.~~

Amortization of DAC increased $19 million, or 5%, primarily due to DAC unlocking, which resulted in an unfavorable adjustment of $16 million for the nine months ended September 30, 2007 compared to a benefit of $38 million in the prior year period. This increase was partially offset by a $28 million unfavorable adjustment related to auto and home products recognized in the 2006 period.

~~Interest and debt expense increased $10 million, or 12%, due to the issuance of $500 million of junior notes in May 2006.~~

~~Separation costs incurred in the 2007 period were primarily associated with separating and reestablishing our technology platforms. In the 2006 period,~~ these costs were primarily associated with separating and reestablishing our technology platforms and establishing the Ameriprise Financial brand. We expect to incur approximately $25 million to $30 million in costs in the fourth quarter of 2007, reflecting all remaining costs from the Separation, which was completed as of September 30, 2007.

Other expenses decreased $27 million, or 3%, from the year-ago period. Other expenses for the 2006 period included $14 million of expenses associated with the sale of the defined contribution recordkeeping business in the second quarter of 2006. Decreases in legal and regulatory costs and expenses attributable to certain consolidated limited partnerships were offset by increases in professional and consultant fees related to increased spendingsame items on ~~investment initiatives, other expenses related to Ameriprise Bank and an increase due to the dollar weakening over the period.~~

~~Income Taxes~~

Our effective tax rate was 17.6% for the nine months ended September 30, 2007, compared to 22.6% for the nine months ended September 30, 2006. The effective tax rate for the nine months ended September 30, 2007 was impacted by a $21 million tax benefit related to our plan to begin repatriating earnings of certain Threadneedle entities through dividends, a $7 million tax benefit related to the finalization of the prior year tax return and a $16 million tax benefit related to the finalization of certain income tax audits. The effective tax rate for the nine months ended September 30, 2006 was impacted by a $13 million tax benefit related to the finalization of the prior year tax return. The effective tax rates are also impacted by the levels of pretax income ~~relative to tax advantaged items, including the dividends received deduction, in each period.~~would be a favorable $14 million.

~~Results of Operations by Segment~~

~~Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006~~

The following tables present summary financial information by segment and reconciliation to consolidated totals derived from Note 13 to our Consolidated Financial Statements for the nine months ended September 30, 2007 and 2006:

Nine Months Ended
September 30, 2007

Nine Months Ended
September 30, 2006

Percent Share
of Total

Percent Share
of Total

(in millions, except percentages)

Total revenues

Asset Accumulation and Income

$
4,732

73
%
$
4,338

73
%
Protection

1,526

24

1,467

25

Corporate and Other

227

4

205

3

Eliminations

(38
)
(1
)
(31
)
(1
)
Consolidated total revenues

$
6,447

100
%
$
5,979

100
%

Total expenses

Asset Accumulation and Income

$
3,963

69
%
$
3,696

69
%
Protection

1,250

22

1,150

21

Corporate and Other

594

10

570

11

Eliminations

(38
)
(1
)
(31
)
(1
)
Consolidated total expenses

$
5,769

100
%
$
5,385

100
%

Pretax segment income (loss)

Asset Accumulation and Income

$
769

113
%
$
642

108
%
Protection

276

41

317

53

Corporate and Other

(367
)
(54
)
(365
)
(61
)
Consolidated income before income tax provision

$
678

100
%
$
594

100
%

~~Asset Accumulation and Income~~AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

~~The following table presents~~Nonperformance Risk – Variable Annuity Riders

Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”) requires companies to measure the ~~results~~fair value of ~~operations~~liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for these liabilities, we considered the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, we adjusted the valuation of variable annuity riders by updating certain policyholder assumptions, adding explicit margins to provide for profit, risk and expenses, and adjusted the rates used to discount expected cash flows to reflect a current market estimate of our ~~AA&I segment for the nine months ended September 30, 2007 and 2006:~~

Nine Months Ended September 30,

2007

2006

Change

(in millions, except percentages)

Revenues

Management, financial advice and service fees

$
2,295

$
1,957

$
338

17
%
Distribution fees

1,026

842

184

22

Net investment income

1,263

1,345

(82
)
(6
)
Other revenues

148

194

(46
)
(24
)
Total revenues

4,732

4,338

394

9

Expenses

Compensation and benefits-field

1,339

1,112

227

20

Interest credited to account values

766

840

(74
)
(9
)
Benefits, claims, losses and settlement expenses

149

19

130

#

Amortization of deferred acquisition costs

244

276

(32
)
(12
)
Interest and debt expense

9

12

(3
)
(25
)
Other expenses

1,456

1,437

19

1

Total expenses

3,963

3,696

267

7

Pretax segment income

$
769

$
642

$
127

20

#~~Variance of 100% or greater.~~

~~Overall~~

~~Our AA&I segment results for the nine months ended September 30, 2007 were led by the growth~~nonperformance risk. These adjustments resulted in our fee-based businesses, primarily driven by strong net inflows in wrap and annuity variable accounts, market appreciation, and continued advisor productivity gains. These improvements to profitability were partially offset by thean adoption impact of lower account balances and spread compression in annuity fixed accounts and certificate products and the negative impact of the mark-to-market on variable annuity benefit riders which was partially offset by the related hedges.

~~Revenues~~

Management, financial advice and service fees increased $338 million, or 17%, primarily as a result of growth in our wrap account assets and variable annuity account assets. Management, financial advice and service fees related to variable annuities increased $139 million, or 32%, and were driven by higher levels of annuity variable account values, which increased 31% to $51.6 billion at September 30, 2007. Our brokerage business had an increase in management, financial advice and service fees of $152 million, or 24%, driven by net increases in wrap account assets of 33% to $92.9 billion at September 30, 2007. Overall, managed assets increased 11% over the prior year period. Management, financial advice and service fees related to Threadneedle increased $44 million, primarily due to the favorable impact of the dollar weakening over the prior year period. These increases were partially offset by a decline in fees relative to the prior year period of $27 million due to the sale of our defined contribution recordkeeping business in the second quarter of 2006.

The growth in distribution fees was driven by our brokerage business, which had an increase in distribution fees of $199 million, or 29%, compared to the year-ago period primarily due to strong advisor cash sales, including an increase in sales of direct investments as clients reinvested proceeds from real estate investment trust liquidations and strong net inflows into Ameriprise Financial and SAI wrap accounts. Distribution fees were also positively impacted by market appreciation.

Net investment income declined $82 million, or 6%, compared to the prior year period. The decline was primarily attributable to declining average balances in annuity fixed accounts and certificate products and lower investment income on trading securities, partially offset by an increase in net investment income attributable to hedges for variable annuity living benefits, net investment income related to Ameriprise Bank and a $23 million decrease in the allowance for loan losses on commercial mortgage loans. Net realized investment gains on Available-for-Sale securities were $21 million for the nine months ended September 30, 2007 compared to $19 million in the year-ago period. Net investment income related to derivatives used to hedge certain expense line items increased $49 million, which included a $45 million increase related to derivatives used to hedge benefits, claims, losses and settlement expenses for variable annuity living benefits and a $4 million increase ~~related~~in the current quarter’s earnings, net of DAC and DSIC amortization and income taxes at January 1, 2008. The nonperformance risk adjustment is specific to ~~derivatives~~the risk of RiverSource Life Insurance Company (“RiverSource Life”) and RiverSource Life Insurance Company of New York not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a significant spread over the LIBOR swap curve as of March 31, 2008. As our estimate of this spread widens or tightens, the liability will decrease or increase. If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to net income would be approximately $26 million, net of DAC and DSIC amortization and income taxes, based on March 31, 2008 credit spreads.

Credit Risk

We are exposed to credit risk within our investment portfolio, which includes loans, and through derivative and reinsurance counterparties. Credit risk relates to the uncertainty of an obligor’s continued ability to make timely payments in accordance with the contractual terms of the instrument or contract. Our potential derivative credit exposure to each counterparty 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. We manage credit risk through fundamental credit analysis, issuer and industry concentration guidelines, and diversification requirements. These guidelines and oversight of credit risk are managed through our comprehensive enterprise risk management program that includes members of senior management.

We manage the risk of adverse default experience on these investments by applying disciplined fundamental credit analysis and underwriting standards, prudently limiting exposures to lower-quality, higher-yielding investments, and diversifying exposures by issuer, industry, region and property type. For each counterparty or borrowing entity and its affiliates, our exposures from all types of transactions are aggregated and managed in relation to guidelines set by risk tolerance thresholds and external and internal rating quality. We remain exposed to occasional adverse cyclical economic downturns during which default rates may be significantly higher than the long-term historical average used in pricing.

Credit exposures on derivative contracts may take into account enforceable netting arrangements and collateral arrangements. Before executing a new type of 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 ~~hedge interest credited expenses~~create exposure to a counterparty in excess of established limits.

Additionally, we reinsure a portion of the insurance risks associated with our life, disability income and long term care insurance products through reinsurance agreements with unaffiliated reinsurance companies. Reinsurance is used in order to limit losses, reduce exposure to large risks and provide additional capacity for ~~stock~~future growth. To manage exposure to losses from reinsurer insolvencies, the financial condition of reinsurers is evaluated prior to entering into new reinsurance treaties and on a periodic basis during the terms of the treaties. Our insurance companies remain primarily liable as the direct insurers on all risks reinsured.

For additional information regarding our sensitivity to market ~~certificates~~ and ~~equity indexed annuities.~~credit risk, see “Management’s Discussion and Analysis—Quantitative and Qualitative Disclosures About Market Risk” in our 2007 10-K.

Fair Value Measurements

SFAS 157 defines fair value, provides a framework for measuring fair value and expands disclosures about fair value measurements. Fair value assumes the exchange of assets or liabilities in orderly transactions. We include actual market prices, or observable inputs in our fair value measurements to the extent available. SFAS 157 does not require the use of market prices that are the result of a forced liquidation or distressed sale. Recent market conditions have increased the likelihood of other-than-temporary impairments for certain non-agency residential mortgage-backed and asset-backed securities.

Sub-prime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles. Alt-A mortgage lending is the origination of residential mortgage loans to customers who have credit ratings above sub-prime but may not conform to government-sponsored standards. We have exposure to these types of loans only through mortgage-backed and asset-backed securities. The slow down in the U.S. housing market, combined with relaxed underwriting standards by some originators, has recently led to higher delinquency and loss rates for some of these investments. As a part

Other revenues decreased $46 million, or 24%, primarily due to the inclusion of $66 million in proceeds from the sale of the defined contribution recordkeeping business in of the second quarter of 2006. Excluding this impact, other revenues increased $20 million, or 16%, primarily due to higher fees from variable annuity rider charges, as well as an increase in other revenues from a direct investment recovery and an increase in other revenues related to the sale of a property partnership, partially offset by lower revenues related to certain consolidated limited partnerships.AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

~~Expenses~~

~~The increase in compensation~~of our risk management process, an internal rating system is used to assess the likelihood that we will not receive all contractual principal and ~~benefits–field reflects higher commissions paid driven by strong sales activity~~interest payments for these investments. For the investments that are more at risk for impairment, we perform our own assessment of projected cash flows incorporating assumptions about default rates, prepayment speeds, loss severity, and ~~higher GDC.~~

~~The decrease in interest credited~~geographic concentrations to ~~account values reflects a decrease~~determine if an other-than-temporary impairment should be recognized. Based on this analysis, other than the three Alt-A mortgage-backed securities that had credit related to annuities of $74 million, which was primarily attributable to the continued decline in fixed annuity account balances. The impact of declining certificate balances was offset by higher crediting rates.

~~Benefits, claims, losses and settlement expenses increased $130 million, from $19 million~~impairments recorded in the ~~2006~~current period, ~~to $149 million in the 2007 period.~~ In the third quarter of 2007, reserves providing for guaranteed benefits associated with our variable annuity business increased by $132 million primarily due to changes in financial market factors, offset by a $9 million related change in DSIC. The related hedge impact was a $57 million increase to net investment income in the third quarter of 2007.

DAC amortization decreased $32 million, or 12%, to $244 million for the nine months ended September 30, 2007 primarily due to a $34 million decrease in DAC amortization driven by the mark-to-market of variable annuity benefit riders, a decrease in DAC amortization related to mutual fund products and an $18 million favorable impact from DAC unlocking, partially offset by underlying increases driven by business growth and the recurring impact of adopting SOP 05-1. The decrease in DAC amortization related to mutual fund products was driven by decreased B share sales resulting in fewer deferred commissionsall contractual payments are expected to be ~~amortized. DAC unlocking related to annuities resulted in a $4 million benefit in the third quarter of 2007 compared to a $14 million unfavorable adjustment in the year-ago period.~~

Other expenses, which include compensation and benefits–non-field, increased $19 million, or 1%, to $1.5 billion for the nine months ended September 30, 2007, primarily due to higher expenses related to Ameriprise Bank and an increase due to the dollar weakening over the period, as well as increased spending on investment initiatives. These increases were partially offset by a decrease in expenses attributable to certain consolidated limited partnerships, lower severance costs and the elimination of expenses related to our defined contribution recordkeeping business, which was sold in the second quarter of 2006. In addition, the 2006 period included $30 million of costs associated with the sale of our defined contribution recordkeeping business.

~~Protection~~received.

The following table presents ~~the results of operations of~~ our ~~Protection segment for the nine months ended September 30, 2007~~residential mortgage-backed and ~~2006:~~asset-backed securities backed by sub-prime and Alt-A mortgage loans by credit rating and vintage year (amounts in millions):

Nine Months Ended September 30,

2007

2006

Change

(in millions, except percentages)

Revenues

Management, financial advice and service fees

$
70

$
58

$
12

21
%
Distribution fees

86

82

4

5

Net investment income

270

262

8

3

Premiums

750

709

41

6

Other revenues

350

356

(6
)
(2
)
Total revenues

1,526

1,467

59

4

Expenses

Compensation and benefits-field

73

67

6

9

Interest credited to account values

106

108

(2
)
(2
)
Benefits, claims, losses and settlement expenses

683

666

17

3

Amortization of deferred acquisition costs

143

92

51

55

Other expenses

245

217

28

13

Total expenses

1,250

1,150

100

9

Pretax segment income

$
276

$
317

$
(41
)
(13
)

~~Overall~~

Our Protection segment results for the nine months ended September 30, 2007 were impacted unfavorably by DAC unlocking and a decrease in long-term care insurance premiums, partially offset by growth in our auto and home insurance business. We continue to gain market share in our auto and home insurance business as a result of our Costco alliance. Auto and home insurance policies in-force generated through this alliance were up 15% at September 30, 2007 compared to September 30, 2006. Total life insurance in-force increased 8% to $184.3 billion at September 30, 2007.

~~Revenues~~

~~The increase in management, financial advice and service fees was primarily driven by fees generated from higher levels of VUL variable account values compared to the year-ago period.~~

Premiums increased $41 million, or 6%, to $750 million for the nine months ended September 30, 2007, primarily due to higher volumes in our auto and home insurance products, partially offset by a decrease in long-term care insurance. Auto and home average policy counts increased 8% over the 2006 period. The decrease in long-term care insurance premiums was primarily due to a review of our long-term care reinsurance arrangement during the third quarter of 2006, which resulted in an increase to premiums of $15 million during that quarter.

Other revenues decreased primarily due to recognizing $18 million of previously deferred cost of insurance revenues in the prior year period. This decrease was partially offset by an increase in cost of insurance charges on VUL/UL products due to volume increases.

~~Expenses~~

Benefits, claims, losses and settlement expenses increased $17 million, or 3%, to $683 million for the nine months ended September 30, 2007. These expenses included $11 million related to DAC unlocking in the 2007 period compared to $12 million in the prior year period. Expenses for the nine months ended September 20, 2007 included an unfavorable $12 million adjustment in reserves for disability income insurance claims. Expenses for the nine months ended September 30, 2006 included a $12 million reduction to auto and home insurance reserves related to accident years 2004 and 2005 and $7 million of additional claims expense in connection with the recognition of previously deferred cost of insurance revenues.

DAC amortization increased $51 million, or 55%, to $143 million for the nine months ended September 30, 2007, primarily due to DAC unlocking related to our VUL/UL products. The impact of DAC unlocking was $20 million unfavorable for the 2007 period compared to a $52 million benefit for the year-ago period. This increase was partially offset by a $28 million unfavorable adjustment related to auto and home products recognized in the 2006 period.

~~Other expenses, which include compensation and benefits–non-field, increased $28 million, or 13%, over the prior year period, primarily due to higher sales and marketing expenses.~~

	AAA				AA				A				BBB				BB & Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Sub-prime
2003 & prior	$	2	$	2	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	2	$	2
2004	15		14		8		7		—		—		11		10		—		—		34		31
2005	109		103		—		—		—		—		—		—		—		—		109		103
2006	101		88		—		—		—		—		—		—		—		—		101		88
2007	—		—		15		9		—		—		—		—		—		—		15		9
2008	14		14		—		—		—		—		—		—		—		—		14		14
Total Sub-prime	$	241	$	221	$	23	$	16	$	—	$	—	$	11	$	10	$	—	$	—	$	275	$	247

Alt-A
2003 & prior	$	9	$	8	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	9	$	8
2004	97		91		29		26		—		—		—		—		—		—		126		117
2005	399		337		94		78		7		7		—		—		—		—		500		422
2006	458		352		—		—		—		—		—		—		—		—		458		352
2007	252		196		—		—		—		—		—		—		—		—		252		196
2008	—		—		—		—		—		—		—		—		—		—		—		—
Total Alt-A	$	1,215	$	984	$	123	$	104	$	7	$	7	$	—	$	—	$	—	$	—	$	1,345	$	1,095
Grand Total	$	1,456	$	1,205	$	146	$	120	$	7	$	7	$	11	$	10	$	—	$	—	$	1,620	$	1,342

~~Corporate and Other~~

~~The following table presents the results of operations of our Corporate segment for the nine months ended September 30, 2007 and 2006:~~

Nine Months Ended September 30,

2007

2006

Change

(in millions, except percentages)

Revenues

Management, financial advice and service fees

$
175

$
145

$
30

21
%
Distribution fees

(1
)
2

(3
)
#

Net investment income

27

36

(9
)
(25
)
Other revenues

26

22

4

18

Total revenues

227

205

22

11

Expenses

Compensation and benefits-field

154

125

29

23

Interest and debt expense

89

76

13

17

Separation costs

208

238

(30
)
(13
)
Other expenses

143

131

12

9

Total expenses

594

570

24

4

Pretax segment loss

$
(367
)
$
(365
)
$
(2
)
(1
)

#~~Variance of 100% or greater.~~

~~Overall~~

Our Corporate pretax segment loss was $367 million for the nine months ended September 30, 2007, compared to $365 million for the nine months ended September 30, 2006. The higher pretax segment loss in the 2007 period was primarily due to lower net investment income and higher interest and debt expense and other expenses, partially offset by a decrease in separation costs.

~~Revenues~~

Management, financial advice and service fees increased $30 million, or 21%, to $175 million for the nine months ended September 30, 2007, primarily due to higher financial planning fees due to accelerated financial plan delivery standards.

~~The decrease in net investment income from the prior year period was primarily due to the mark-to-market of equity market hedges and trading securities.~~

~~Expenses~~

The increase in compensation and benefits–field over the year-ago period relates to higher compensation due to higher financial planning fees resulting from accelerated financial plan delivery standards.

The increase in interest and debt expense over the prior year period primarily reflects the interest on the junior notes issued in May 2006. Interest expense on the junior notes was $28 million for the nine months ended September 30, 2007 compared to $13 million for the prior year period.

Separation costs incurred in the 2007 period were primarily associated with separating and reestablishing our technology platforms. In the 2006 period, these costs were primarily associated with separating and reestablishing our technology platforms and establishing the Ameriprise Financial brand. We expect to incur approximately $25 million to $30 million in costs in the fourth quarter of 2007, reflecting all remaining costs from the Separation, which was completed as of September 30, 2007.

Other expenses increased $12 million, or 9%, over the prior year period, primarily due to higher expenses related to financial planning, as well as higher expenses related to corporate overhead, partially offset by lower severance costs.

Liquidity and Capital Resources

Overview

We maintained substantial liquidity during the ~~third~~first quarter of ~~2007.~~2008. At ~~September 30, 2007,~~March 31, 2008, we had ~~$4.0~~$3.9 billion in cash and cash equivalents, ~~an increase~~up from ~~$3.3~~$3.8 billion at ~~September 30, 2006.~~December 31, 2007. We have additional liquidity available through an unsecured revolving credit facility for $750 million that expires in September 2010. Under the terms of the underlying credit agreement, we can increase this facility to $1.0 billion. Available borrowings under this facility are reduced by any outstanding letters of credit. We have had no borrowings under this credit facility and had $6$4 million of outstanding letters of credit at ~~September 30, 2007.~~March 31, 2008. We believe cash flows from operating activities, available cash balances and our availability of revolver borrowings will be sufficient to fund our operating liquidity needs.

Dividends from Subsidiaries

Ameriprise Financial, Inc. is primarily a parent holding company for the operations carried out by our wholly owned 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 or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, ~~Insurance Company (“RiverSource Life”),~~ our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, Inc. (“AFSI”), our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc. (“AEIS”), our auto and home insurance subsidiary, IDS Property Casualty Insurance Company (“IDS Property Casualty”), doing business as Ameriprise Auto & Home Insurance, Threadneedle, RiverSource Service Corporation and our investment advisory company, RiverSource Investments, LLC. The payment of dividends ~~or return of capital~~ by many of our subsidiaries is restricted and certain of our subsidiaries are subject to regulatory capital requirements.

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows:

	Actual Capital as of						Actual Capital as of
(in millions)	September 30, 2007		December 31, 2006		Regulatory Capital Requirement
							March 31, 2008		December 31, 2007		Regulatory Capital Requirement
							(in millions)
RiverSource Life Insurance Company(1)(2)	$	3,058	$	3,511	$	590	$	2,857	$	3,017	$	442
RiverSource Life Insurance Co. of New York(1)(2)	291		348		38		303		288		34
IDS Property Casualty Insurance Company(1)(3)	568		523		116		440		424		119
Ameriprise Insurance Company(1)(3)	48		47		2		49		49		2
Ameriprise Certificate Company(4)	226		279		211		209		210		204
Threadneedle Asset Management Holdings Limited(5)	238		246		153		231		232		148
Ameriprise Bank, FSB(6)	165		169		165		83		143		83
Ameriprise Financial Services, Inc.(3)(4)	146		85		#		139		102		#
Ameriprise Captive Insurance Company(1)(3)	11		—		10
Ameriprise Captive Insurance Company							17		16		17
Ameriprise Trust Company(3)	43		49		37		45		60		34
American Enterprise Investment Services, Inc.(3)(4)	78		38		5		68		56		5
Securities America, Inc.(3)(4)	20		2		#		14		13		#
RiverSource Distributors, Inc.(3)(4)	7		#		#		30		30		#

#		~~Amounts are less than $1 million.~~
~~(1)~~		~~Actual capital is determined on a statutory basis.~~
~~(2)~~		~~Regulatory capital requirement is based on the most recent statutory risk-based capital filing, as of December 31, 2006.~~
~~(3)~~		~~Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of September 30, 2007.~~
~~(4)~~		~~Actual capital is determined on an adjusted GAAP basis.~~
~~(5)~~		#Amounts are less than $1 million. (1)Actual capital is determined on a statutory basis. (2)Regulatory capital requirement as of March 31, 2008 is based on the most recent annual statutory risk-based capital filing. (3)Regulatory capital requirement is based on the applicable regulatory requirement, calculated as of March 31, 2008. (4)Actual capital is determined on an adjusted GAAP basis. (5)Actual capital and regulatory capital requirements are determined in accordance with U.K. regulatory legislation. Both actual capital and regulatory capital requirements are as of June 30, 2007, based on the most recent required U.K. filing. (6) ~~Actual capital as of December 31, 2006 relates to the December 31, 2006 filing.~~
~~(6)~~		Ameriprise Bank holds capital in compliance with the Federal Deposit Insurance Corporation policy regarding de novo depository institutions.

In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, 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. During the ~~nine~~three months ended ~~September 30,~~March 31, 2008, Ameriprise Financial, Inc. received cash dividends from subsidiaries of $185 million, of which $125 million came from RiverSource Life. No cash contributions were made to subsidiaries during the three months ended March 31, 2008. During the three months ended March 31, 2007, Ameriprise Financial, Inc. received cash dividends ~~from~~ and made cash contributions to subsidiaries of ~~$1.2 billion~~$201 million and ~~$40~~$38 million, respectively. Of the dividends received ~~$800~~for the three months ended March 31, 2007, $150 million came from RiverSource Life.

~~Operating Activities~~Share Repurchases and Dividends Paid to Shareholders

~~Net cash provided by operating activities for~~We have a share repurchase program in place to return excess capital to shareholders. During the ~~nine~~three months ended ~~September 30,~~March 31, 2008 and 2007, ~~was $735~~we repurchased a total of 5.2 million ~~compared to $716~~and 5.9 million ~~for the nine months ended September 30, 2006, a change of $19 million. This increase primarily reflects changes in operating assets and liabilities.~~

~~Investing Activities~~

~~Our investing activities primarily relate to our Available-for-Sale investment portfolio. Further, this activity is significantly affected by the net flows~~shares, respectively, of our ~~investment certificate, fixed annuity~~common stock at an average price of $51.55 and ~~insurance products reflected in financing activities.~~

~~Net cash provided by investing activities for~~$59.76, respectively. As of March 31, 2008, we had $148 million remaining under share repurchase authorizations. In April 2008, our Board of Directors authorized the ~~nine months ended September 30, 2007 was $4.2 billion compared~~expenditure of up to ~~$3.4~~$1.5 billion for the ~~nine months ended September 30, 2006, a change~~repurchase of ~~$0.8 billion.~~our common stock through April 2010.

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

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

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

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

~~Financing Activities~~

~~Net cash used in financing activities was $3.7 billion for the nine months ended September 30, 2007 compared to $3.3 billion for the nine months ended September 30, 2006, a change of $0.4 billion.~~

Net cash used for investment certificates and banking time deposits decreased $226 million, increasing cash flows from financing activities over the prior year period. This decrease resulted from a decrease in cash used for maturities, withdrawals and cash surrenders of investment certificates and banking time deposits, partially offset by a decrease in proceeds from additions to investment certificates and banking time deposits.

Change in other customer deposits resulted in cash provided by financing activities of $135 million for the nine months ended September 30, 2007 compared to cash used in financing activities of $164 million for the nine months ended September 30, 2006, an increase of $299 million. The ~~change was primarily due to Ameriprise Bank activity.~~

Net cash used for policyholder and contractholder account values increased $376 million, decreasing cash flows from financing activities over the prior year period. This decrease resulted from a decrease in consideration received from policyholder and contractholder account values, lower interest credited to account values and an increase in surrenders and other benefits, most of which related to fixed annuities.

We issued our junior notes in the second quarter of 2006, which resulted in a $494 million increase in cash. This increase to cash was partially offset by principal repayments of debt of $252 million in the first nine months of 2006. These changes resulted in a $264 million net cash inflow for the nine months ended September 30, 2006, compared to a net cash outflow of $28 million for principal repayments of debt for the nine months ended September 20, 2007.

~~We used cash of $665 million for the nine months ended September 30, 2007 for~~share repurchase program does not require the purchase of ~~11.1 million treasury~~any minimum number of shares, ~~under our share repurchase programs, an increase of $243 million over the~~and depending on market conditions and factors, these purchases may be commenced or suspended at any time without prior ~~year period.~~notice. We used our existing working capital to fund these share repurchases, and we currently intend to fund additional share repurchases through existing working capital, future earnings, debt capacity and other customary financing methods. ~~Pursuant~~

We paid regular quarterly cash dividends to our shareholders totaling $34 million and $27 million for the three months ended March 31, 2008 and 2007, respectively.

On April 22, 2008, our Board of Directors declared a regular quarterly cash dividend of $0.15 per common share. The dividend will be paid on May 16, 2008 to our shareholders of record at the close of business on May 2, 2008.

Cash Flows from Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2008 was $187 million compared to cash used of $110 million for the three months ended March 31, 2007, an increase of $297 million. The increase was primarily

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

related to a decrease in incentive compensation payments, lower investments in hedge funds, higher proceeds from the sale of trading securities primarily due to the ~~Ameriprise Financial 2005 Incentive Compensation Plan, we reacquired 0.4~~liquidation of certain hedge funds in the first quarter of 2008 and a $100 million ~~shares~~payment in the first quarter of 2007 related to the settlement of the consolidated securities class action lawsuit. In addition, an increase in fee revenues compared to the prior year period and the completion of separation costs in the second half of 2007 had a positive impact on operating cash flows for the first quarter of 2008.

Cash Flows from Investing Activities

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

Net cash provided by investing activities for the three months ended March 31, 2008 was $487 million compared to $1.2 billion for the three months ended March 31, 2007, a decrease of $691 million. The decrease was primarily due to a $736 million decrease in proceeds from sales of Available-for-Sale securities partly due to lower net outflows of our investment certificates and fixed annuities compared to the prior year period, as well as an increase in purchases of other investments which was primarily due to the reinvestment of cash received from the sale of trading securities due to the liquidation of certain hedge funds. These decreases were partially offset by an increase in cash of $156 million due to a decrease in our restricted cash balance primarily related to the liquidation of certain hedge funds consolidated under EITF 04-5.

Cash Flows from Financing Activities

Net cash used in financing activities for the three months ended March 31, 2008 was $606 million compared to $1.4 billion for the three months ended March 31, 2007, a decrease of $780 million. Cash used for the repurchase of our common stock decreased $109 million to $277 million for the three months ended March 31, 2008 compared to $386 million for the same period in the ~~first nine months of 2007 through~~prior year. Net cash from policyholder and contractholder account values increased $431 million from the ~~surrender of restricted shares upon vesting and paid in the aggregate $25 million~~prior year period primarily due lower surrenders related to fixed annuities as well as higher consideration received from clients. Proceeds from additions of investment certificates increased $88 million due to an increase in sales of investment certificates. Maturities, withdrawals and cash surrenders of investment certificates decreased $147 million compared to the holders’ income tax obligations on the vesting date. As of September 30, 2007, we have $701 million remaining under a share repurchase program authorized by our Board of Directors. This share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, purchases may be commenced or suspended at any time without prior ~~notice.~~year period.

Contractual Commitments

There have been no material changes in our contractual obligations disclosed in our ~~Annual Report on Form 10-K for the year ended December 31, 2006.~~2007 10-K.

Off-Balance Sheet Arrangements

There have been no material changes in our off-balance sheet arrangements disclosed in our 2007 10-K.

During the nine months ended September 30, 2007, we closed on two structured investments that we manage. The structures have approximately $1.1 billion issued and are fully subscribed. During the nine months ended September 30, 2007, we also issued an additional $188 million on a structured investment closed on in 2006. As a condition to managing these structures, we were required to invest a total of $7 million in the residual or “equity” tranches of the facilities closed on in 2007, which are the most subordinated tranches of securities issued by the structured investment entities. As an investor in the residual tranches, our return correlates to the performance of the portfolio of high-yield investments comprising the structured investments. Our exposure as an investor is limited solely to our aggregate investment in these facilities, and we have no obligation, contingent or otherwise, that could require any further funding of the investments. The structured investments are considered variable interest entities but are not consolidated as we are not considered the primary beneficiary.36

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

Forward-Looking Statements

This report contains forward-looking statements that reflect our plans, estimates and beliefs. ~~Our actual~~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 asset flows, mass affluent and affluent client acquisition strategy ~~the establishment of our new brands~~ and ~~competitive environment;~~consolidated tax rate;

•· statements about ~~our~~ future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United ~~States;~~States and of global markets; 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:

•· changes in the valuations, liquidity and volatility in the interest rate, ~~and~~ equity market, and foreign exchange environments;

•· changes in the litigation and regulatory environment, including ongoing legal proceedings and regulatory ~~actions;~~actions, the frequency and extent of legal claims threatened or initiated by clients, other persons and regulators, and developments in regulation and legislation;

•·our investment management performance and consumer acceptance of our products;

•· effects of competition in the financial services industry and changes in product distribution mix and
distribution channels;

•· our capital structure ~~as a stand-alone company,~~ including ratings and indebtedness, and limitations on subsidiaries to pay dividends;

•· risks of default by issuers or guarantors of investments we own or by counterparties to hedge derivative, insurance or reinsurance arrangements;

•· experience deviations from our assumptions regarding morbidity, mortality and persistency in certain annuity and insurance ~~products;~~products, or from assumptions regarding market volatility underlying our hedges on guaranteed benefit annuity riders;

•· ~~the impact of the separation from American Express;~~

•the impacts of our efforts to improve distribution economics and to grow third-party distribution of our products;

•· our ability ~~to establish our new brands and~~ to realize benefits from tax planning; and

•· general economic and political factors, including consumer confidence in the economy as well as the ability and inclination of consumers generally to invest, the costs of products and services we consume in the conduct of our business, and applicable legislation and regulation, including tax ~~law,~~laws, tax treaties, fiscal and central government treasury policy, and regulatory rulings and pronouncements.

Readers are cautioned 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. The ~~foregoing~~forgoing list of factors should be read in conjunction with the “Risk Factors” discussion included as Part I, Item 1A of our ~~Annual Report on Form 10-K filed with the SEC on February 27, 2007.~~2007 10-K.

3937

AMERIPRISE FINANCIAL, INC.

PART I – FINANCIAL INFORMATION

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~In the third quarter of 2007, we began hedging our guaranteed minimum accumulation benefit (“GMAB”) riders.~~ The GMAB rider guarantees that, regardless of market performance, at the end of the 10 year waiting period, the contract value will be no less than the original investment or 80% of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the guarantee at the end of the 10 year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value. We face risk from these riders as the fair value of the guaranteed benefits changes due to changesinformation set forth in ~~levels of equity and bond markets, interest rates, market implied volatilities and other factors.~~

Our GMAB hedge strategy utilizes longer dated put and call options as the core instruments, supplemented with equity futures and interest rate swaps to further mitigate the risks not covered by the puts and calls. This strategy is semi-static, similar to our guaranteed minimum withdrawal benefit (“GMWB”) hedging strategy, in that we do not anticipate the need for frequent or significant rebalancing.

We have added a new GMWB benefit design, called SecureSource. There are two primary differences between SecureSource and our previous GMWB for life design. First, SecureSource is available in a joint version that promises 6% withdrawals while either contract holder remains alive. Second, once withdrawals begin, the policyholder’s funds are moved to one of the three less aggressive asset allocation models (of the five that are available prior to withdrawal).

We have also begun utilizing longer dated put and call derivatives in our GMWB hedging strategy to improve effectiveness and reduce hedging costs. These derivatives are an alternative to the more customized equity puts we have used previously. We continue to supplement the core derivatives with equity futures and interest rate swaps to further mitigate interest rate and equity risk.

The total value of all variable annuity contracts has grown from $49.5 billion at December 31, 2006 to $57.1 billion at September 30, 2007. The contracts containing GMWB riders have grown from $7.2 billion at December 31, 2006 to $12.0 billion at September 30, 2007. The total value of variable annuity contracts with GMAB riders has grown from $1.4 billion at December 31, 2006 to $2.1 billion at September 30, 2007. Reserve liabilities for the guaranteed benefits are recorded in future policy benefits and claims on our Consolidated Balance Sheets. At September 30, 2007, the reserve for the GMWB was $76 million compared with a reserve of negative $12 million at December 31, 2006. At September 30, 2007, the reserve for the GMAB was $12 million compared with a reserve of negative $5 million at December 31, 2006. The large increases in reserves for the GMWB and GMAB reflect the effects of a substantial increase in long-term volatility on the mark-to-market value of the guarantees.

~~For additional information, refer to~~Part I, Item 2, “Management’s Discussion and Analysis ~~– Quantitative~~of Financial Condition and ~~Qualitative Disclosures about~~Results of Operations — Market Risks” of the Ameriprise Financial, Inc. 2006 Annual Report to Shareholders filed as Exhibit 13 to our Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on February 27, 2007.Risk” in this report is incorporated herein by reference.

ITEM 4. 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 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~~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 ~~September 30, 2007.~~March 31, 2008.

Changes in Internal Control Over Financial Reporting

There have not been any 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 fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.

4038

AMERIPRISE FINANCIAL, INC.

PART ~~II.~~II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 1611 to Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of our ~~Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on February 27, 2007.~~2007 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during the ~~third~~first quarter of ~~2007.~~2008:

(a)	(b) Total Number of	Average Price			(c) Total Number of Shares Purchased as Part of Publicly Announced Plans	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans		(b)				(c)	(d)
Period	Shares Purchased	Paid per Share			or Programs(1)	or Programs(1)		Total Number of Shares Purchased	Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)

July 1 to July 31, 2007
January 1 to January 31, 2008
Share repurchase program(1)	100,000	$	59.68	(2)	100,000	$	865,444,903	973,067	$	52.40	(2)	973,067	$	367,447,569
Employee transactions(3)	1,667	$	64.71		N/A	N/A		388,912	$	51.88		N/A	N/A

August 1 to August 31, 2007
February 1 to February 29, 2008
Share repurchase program(1)	1,977,200	$	57.95	(2)	1,977,200	$	750,869,619	1,800,000	$	52.67	(2)	1,800,000	$	272,647,509
Employee transactions(3)	981	$	56.23		N/A	N/A		983	$	54.96		N/A	N/A

September 1 to September 30, 2007
March 1 to March 31, 2008
Share repurchase program(1)	831,620	$	60.23	(2)	831,620	$	700,783,761	2,464,722	$	50.40	(2)	2,464,722	$	148,435,489
Employee transactions(3)	516	$	61.39		N/A	N/A		3,294	$	51.76		N/A	N/A

Totals
Share repurchase program	2,908,820	$	58.66		2,908,820			5,237,789	$	51.55		5,237,789
Employee transactions	3,164	$	61.54		N/A			393,189	$	51.89		N/A
	2,911,984				2,908,820			5,630,978				5,237,789

~~(1)~~

(1)On March 15, 2007, we announced that our Board of Directors authorized us to repurchase up to $1.0 billion worth of our common stock through March 15, 2009. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through block trades or other means.

(2)Includes commissions and other transaction costs of approximately $0.02 per share.

(3)Restricted shares withheld pursuant to the terms of awards under the amended and revised Ameriprise Financial 2005 Incentive Compensation Plan (the “Plan”) to offset tax withholding obligations that occur upon vesting and release of restricted shares. The Plan provides that the value of the shares withheld shall be the average of the high and low prices of common stock of Ameriprise Financial, Inc. on the date the relevant transaction occurs.

On March 15, 2007, we announced that our Board of Directors authorized us to repurchase up to $1.0 billion worth of our common stock through March 15, 2009. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through block trades or other means.

~~(2)~~

~~Includes commissions and other transaction costs of approximately $0.02 per share.~~

~~(3)~~

Restricted shares withheld pursuant to the terms of awards under the Ameriprise Financial 2005 Incentive Compensation Plan (“2005 ICP”) to offset tax withholding obligations that occur upon vesting and release of restricted shares. The 2005 ICP provides that the value of the shares withheld shall be the average of the high and low prices of common stock of Ameriprise Financial, Inc. on the date the relevant transaction occurs.

ITEM 6. EXHIBITS

The list of exhibits required to be filed as exhibits to this report are listed on page E-1 hereof, under “Exhibit Index,” which is incorporated herein by reference.

4139

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.

	AMERIPRISE FINANCIAL, INC.
	~~(Registrant)~~	(Registrant)


Date: ~~November~~May 6, ~~2007~~2008	By	/s/ Walter S. Berman
		Walter S. Berman
		Executive Vice President and
		Chief Financial Officer


Date: ~~November~~May 6, ~~2007~~2008	By	/s/ David K. Stewart
		David K. Stewart
		Senior Vice President and
		Controller
		(Principal Accounting Officer)

4240

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 Quarterly Report on Form 10-Q. 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 Quarterly Report on Form 10-Q. 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.

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 Annual Report on Form 10-K, File No. 1-32525, filed on February 27, 2007).

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 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*		Ameriprise Financial Deferred Equity Program for Independent Financial Advisors, as amended and restated effective April 23, 2008.

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.

E-1

	September 30, 2007				December 31, 2006
	Outstanding Balance		Stated Interest Rate		Outstanding Balance		Stated Interest Rate
	(in millions)				(in millions)
Senior notes due 2010	$	800	5.4	%	$	800	5.4	%
Senior notes due 2015	700		5.7		700		5.7
Junior subordinated notes due 2066	500		7.5		500		7.5
Fixed and floating rate notes due 2011:
Floating rate senior notes	56		5.9		84		5.9
Fixed rate notes	86		8.6		86		8.6
Fixed rate senior notes	46		7.2		46		7.2
Fixed rate notes	9		13.3		9		13.3
Total	$	2,197			$	2,225

	Asset Accumulation and Income		Protection		Corporate and Other			Eliminations			Consolidated
	(in millions)
Three Months Ended September 30,

2007
Revenue from external customers	$	1,615	$	510	$	77		$	—		$	2,202
Intersegment revenue	4		8		—			(12		)	—
Total revenues	$	1,619	$	518	$	77		$	(12	)	$	2,202

Income (loss) before income tax provision	$	259	$	73	$	(115	)	$	—		$	217
Income tax provision											19
Net income											$	198

2006
Revenue from external customers	$	1,418	$	492	$	67		$	—		$	1,977
Intersegment revenue	5		6		—			(11		)	—
Total revenues	$	1,423	$	498	$	67		$	(11	)	$	1,977

Income (loss) before income tax provision	$	192	$	151	$	(126	)	$	—		$	217
Income tax provision											43
Net income											$	174

Nine Months Ended September 30,

2007
Revenue from external customers	$	4,719	$	1,501	$	227		$	—		$	6,447
Intersegment revenue	13		25		—			(38		)	—
Total revenues	$	4,732	$	1,526	$	227		$	(38	)	$	6,447

Income (loss) before income tax provision	$	769	$	276	$	(367	)	$	—		$	678
Income tax provision											119
Net income											$	559

2006
Revenue from external customers	$	4,324	$	1,450	$	205		$	—		$	5,979
Intersegment revenue	14		17		—			(31		)	—
Total revenues	$	4,338	$	1,467	$	205		$	(31	)	$	5,979

Income (loss) before income tax provision	$	642	$	317	$	(365	)	$	—		$	594
Income tax provision											134
Net income											$	460

	September 30,
	2007			2006			% Change
	(in billions, except percentages)
Owned Assets:
Separate accounts⁽¹⁾	$	62.4		$	48.8		28	%
Investments	31.2			36.2			(14	)
Other⁽²⁾	9.2			7.7			19
Total Owned Assets	102.8			92.7			11
Managed Assets:
Managed Assets—Retail
RiverSource Mutual Funds	63.2			57.6			10
Threadneedle⁽³⁾ Mutual Funds	18.4			15.6			18
Ameriprise Financial Wrap Account Assets	79.6			59.9			33
SAI Wrap Account Assets	13.3			10.2			30
Total Managed Assets—Retail	174.5			143.3			22
Managed Assets—Institutional
RiverSource	29.7			26.8			11
Threadneedle⁽³⁾	111.5			108.0			3
Total Managed Assets—Institutional	141.2			134.8			5
Managed Assets—Retirement Services
RiverSource Collective Funds	9.3			11.0			(15	)
Managed Assets—Eliminations⁽⁴⁾	(9.6		)	(5.7		)	(68	)
Total Managed Assets	315.4			283.4			11
Administered Assets	73.4			63.9			15
Total Owned, Managed and Administered Assets	$	491.6		$	440.0		12

	Three Months Ended September 30, 2007					Three Months Ended September 30, 2006
				Percent Share of Total					Percent Share of Total
	(in millions, except percentages)
Total revenues
Asset Accumulation and Income	$	1,619		74	%	$	1,423		72	%
Protection	518			24		498			25
Corporate and Other	77			3		67			3
Eliminations	(12		)	(1	)	(11		)	—
Consolidated total revenues	$	2,202		100	%	$	1,977		100	%

Total expenses
Asset Accumulation and Income	$	1,360		69	%	$	1,231		70	%
Protection	445			22		347			20
Corporate and Other	192			10		193			11
Eliminations	(12		)	(1	)	(11		)	(1	)
Consolidated total expenses	$	1,985		100	%	$	1,760		100	%

Pretax segment income (loss)
Asset Accumulation and Income	$	259		119	%	$	192		88	%
Protection	73			34		151			70
Corporate and Other	(115		)	(53	)	(126		)	(58	)
Consolidated income before income tax provision	$	217		100	%	$	217		100	%

	Nine Months Ended September 30, 2007					Nine Months Ended September 30, 2006
				Percent Share of Total					Percent Share of Total
	(in millions, except percentages)
Total revenues
Asset Accumulation and Income	$	4,732		73	%	$	4,338		73	%
Protection	1,526			24		1,467			25
Corporate and Other	227			4		205			3
Eliminations	(38		)	(1	)	(31		)	(1	)
Consolidated total revenues	$	6,447		100	%	$	5,979		100	%

Total expenses
Asset Accumulation and Income	$	3,963		69	%	$	3,696		69	%
Protection	1,250			22		1,150			21
Corporate and Other	594			10		570			11
Eliminations	(38		)	(1	)	(31		)	(1	)
Consolidated total expenses	$	5,769		100	%	$	5,385		100	%

Pretax segment income (loss)
Asset Accumulation and Income	$	769		113	%	$	642		108	%
Protection	276			41		317			53
Corporate and Other	(367		)	(54	)	(365		)	(61	)
Consolidated income before income tax provision	$	678		100	%	$	594		100	%