-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M2rIBzHmSAm67pSuhyaMNgwlEvE+2lzZMby+EqSq6UdEoMxij6nbOKW43tEJC5+u +RVdnWbYMf39TH1WsOBmwg== 0001068800-06-000188.txt : 20060310 0001068800-06-000188.hdr.sgml : 20060310 20060309210854 ACCESSION NUMBER: 0001068800-06-000188 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060310 DATE AS OF CHANGE: 20060309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERIPRISE CERTIFICATE CO CENTRAL INDEX KEY: 0000052428 IRS NUMBER: 416009975 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 811-00002 FILM NUMBER: 06677404 BUSINESS ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER CITY: MINNEAPOLIS STATE: MN ZIP: 55474 BUSINESS PHONE: 6123723131 MAIL ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER CITY: MINNEAPOLIS STATE: MN ZIP: 55474 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN EXPRESS CERTIFICATE CO DATE OF NAME CHANGE: 20000512 FORMER COMPANY: FORMER CONFORMED NAME: IDS CERTIFICATE CO /MN/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INVESTORS SYNDICATE OF AMERICA INC DATE OF NAME CHANGE: 19860303 10-K 1 cert10k.txt ============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM 10-K -------------------------- |X| ANNUAL REPORT PURSUANT TO SECTION 30 OF THE INVESTMENT COMPANY ACT OF 1940 AND SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 OR | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________TO ________ COMMISSION FILE NO. 2-23772 AMERIPRISE CERTIFICATE COMPANY (Exact name of registrant as specified in its charter) DELAWARE 41-6009975 (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 52 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MINNESOTA 55474 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 671-3131 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [Not applicable] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding at March 10, 2006 - -------------------------------------- ----------------------------- Common Stock (par value $10 per share) 150,000 shares THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS I (1) (a) and (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. ============================================================================== 1 TABLE OF CONTENTS
FORM 10-K ITEM NUMBER PART I PAGE 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1B. Unresolved Staff Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . 11 PART II 5. Market for the Registrant's Common Stock and Related Stockholder Matters . . . . . . . . . 12 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7. Management's Discussion and Analysis of Financial Condition and Results of Operation . . . 13 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . 17 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . 17 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . 17 9A. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 9B. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . 18 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . 18 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . 18 PART III 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . 19 PART IV 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . . . 20 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Index to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1 Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
2 PART I ------ ITEM 1. BUSINESS Ameriprise Certificate Company (ACC or the Company) is incorporated under the laws of Delaware. ACC's principal executive offices are located at 52 Ameriprise Financial Center, Minneapolis, Minnesota 55474, and its telephone number is (612) 671-3131. Ameriprise Financial, Inc. (Ameriprise Financial), a Delaware corporation located at 55 Ameriprise Financial Center, Minneapolis, Minnesota 55474, owns 100% of the outstanding voting securities of ACC. Prior to August 1, 2005, Ameriprise Financial was known as American Express Financial Corporation and Ameriprise Certificate Company was known as American Express Certificate Company. Ameriprise Financial and Ameriprise Certificate Company changed their names on August 1, 2005 as a consequence of the plans announced by American Express Company (American Express) on February 1, 2005, to pursue a spin off of the businesses now being operated as part of Ameriprise Financial (the Separation). The Separation was completed on September 30, 2005. As a result of the Separation, Ameriprise Financial and its subsidiaries are no longer affiliated with American Express. Ameriprise Financial and American Express are independent companies, with separate public ownership, boards of directors and management. In connection with the Separation, Ameriprise Financial has incurred and will be incurring separation and distribution-related expenses in order to become a separate company. Based on the terms of the distribution and investment advisory and services agreements set in place between ACC and its affiliates, no separation costs will be borne by ACC. ACC is registered as an investment company under the Investment Company Act of 1940 (the 1940 Act) and is in the business of issuing face-amount investment certificates. Face-amount certificates issued by ACC entitle the certificate owner to receive at maturity a stated amount of money and interest or credits declared from time to time by ACC, at its discretion. The certificates issued by ACC are not insured by any government agency. ACC's certificates are sold primarily by Ameriprise Financial Services, Inc. (AMPF) an affiliate of ACC. AMPF is registered as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico. During the third quarter 2005, ACC agreed with American Express Bank Limited (AEB), a subsidiary of American Express, to execute an orderly wind-down of the certificate business marketed through AEB and American Express Bank International (AEBI(1)). This agreement was effected through amendments to the existing contracts with AEB and AEBI. Under these amendments, as of October 1, 2005 AEB and AEBI no longer market or offer ACC certificate products; however compensation, at reduced rates, will continue to be paid to AEB and AEBI under the agreements until the earlier of the date upon which the business sold or marketed previously by AEB and AEBI no longer remains in effect or termination of the agreements. The amount of certificate reserves associated with this business was approximately $0.7 billion and $1.6 billion as of December 31, 2005 and 2004, respectively. As of the date of this report, ACC offers the following five different certificate products to the public: 1. Ameriprise Cash Reserve Certificate o Single payment certificate that permits additional investments and ACC guarantees interest rates in advance for a three-month term on these certificates. o Currently sold without a sales charge. o Available as qualified investments for IRAs, 401(k) plans, and other qualified retirement plans. o Distributed pursuant to a Distribution Agreement with AMPF. o Current policy is to re-evaluate the certificate product interest crediting rates weekly to respond to marketplace changes. 3 o ACC refers to an independent index or source to set the rates for new sales and must set the rates for an initial purchase of the certificate within a specified range of the rate from such index or source and for renewals, ACC uses such rates as an indication of the competitors' rates, but is not required to set rates within a specified range. o Published rates of the U.S. ninety-day Treasury bill are used as a guide in setting rates. o Competes with popular short-term investment vehicles such as certificates of deposit, money market certificates, and money market mutual funds that offer comparable yields, liquidity and safety of principal. 2. Ameriprise Flexible Savings Certificate o Single payment certificate that permits a limited amount of additional payments and on which ACC guarantees interest rates in advance for a term of six, twelve, eighteen, twenty-four, thirty or thirty-six months, and potentially other terms, at the certificate product owner's option. o Currently sold without a sales charge. o Currently bears surrender charges for premature surrenders. o Available as qualified investments for IRAs, 401(k) plans, and other qualified retirement plans. o Distributed pursuant to a Distribution Agreement with AMPF. o Current policy is to re-evaluate the certificate product interest crediting rates weekly to respond to marketplace changes. o ACC refers to an independent index or source to set the rates for new sales and must set the rates for an initial purchase of the certificate within a specified range of the rate from such index or source and for renewals, ACC uses such rates as an indication of the competitors' rates, but is not required to set rates within a specified range. o Published rates of the BANK RATE MONITOR(R) Top 25 Market Average (the BRM Average) for various length bank certificates of deposit are used as the guide in setting rates. BANK RATE Monitor and Top 25 Market Average are marks owned by BANKRATE.COM(SM), publication of Bankrate, Inc., N. Palm Beach, FL 33408. o Competes with popular short-term investment vehicles such as certificates of deposit, money market certificates, and money market mutual funds that offer comparable yields, liquidity and safety of principal. 3. Ameriprise Installment Certificate o Installment payment certificate that declares interest rates in advance for a three-month period and offers bonuses for up to four certificate years for regular investments. o Currently sold without a sales charge. o Currently bears surrender charges for premature surrenders. o Available as qualified investments for IRAs, 401(k) plans, and other qualified retirement plans. o Distributed pursuant to a Distribution Agreement with AMPF. o Current policy is to re-evaluate the certificate product interest crediting rates weekly to respond to marketplace changes. o ACC refers to an independent index or source to set the rates for new sales and must set the rates for an initial purchase of the certificate within a specified range of the rate from such index or source and for renewals, ACC uses such rates as an indication of the competitors' rates, but is not required to set rates within a specified range. o Average interest rate for money market deposit accounts, as published by the BRM Average(R), is used as a guide in setting rates. o Intended to help clients save systematically and may compete with passbook savings and NOW accounts. 4 4. Ameriprise Stock Market Certificate o Single payment certificate that offers the certificate product owner the opportunity to have all or part of the certificate product returns tied to fifty-two week stock market performance, up to a maximum return, as measured by a broad stock market index, with return of principal guaranteed by ACC and the owner can also choose to earn a fixed rate of interest after the first term. o Currently sold without a sales charge. o Currently bears surrender charges for premature surrenders. o Available as qualified investments for IRAs, 401(k) plans, and other qualified retirement plans. o Distributed pursuant to a Distribution Agreement with AMPF. o AMPF has a Selling Agent Agreement with AEBI, a direct subsidiary of AEB. o AMPF has a Selling Agent Agreement effective March 10, 1999 with Securities America Inc., an affiliate of ACC. o Current policy is to re-evaluate the certificate product interest crediting rates weekly and maximum return rates at least monthly to respond to marketplace changes. o Certain banks offer certificates of deposit that have features similar to this certificate. o The rate of interest is calculated in whole or in part based on any upward movement in a broad-based stock market index up to a maximum return, where the maximum is a fixed rate for a given term, but can be changed at ACC's discretion for prospective terms. 5. Ameriprise Market Strategy Certificate o Single payment certificate, with a flexible yield, that pays interest at a fixed rate or that offers the certificate product owner the opportunity to have all or part of the certificate product returns tied to fifty-two week stock market performance, up to a maximum return, as measured by a broad stock market index, for a series of fifty-two week terms starting every month or at intervals the certificate product owner selects. o Currently sold without a sales charge. o Currently bears surrender charges for premature surrenders. o Available as qualified investments for IRAs, 401(k) plans, and other qualified retirement plans. o Distributed pursuant to a Distribution Agreement with AMPF. o Current policy is to re-evaluate the certificate product interest crediting rates weekly and maximum return rates at least monthly to respond to marketplace changes. o Certain banks offer certificates of deposit that have features similar to this certificate. o The rate of interest is calculated in whole or in part based on any upward movement in a broad-based stock market index up to a maximum return, where the maximum is a fixed rate for a given term, but can be changed at ACC's discretion for prospective terms. (1) AEBI is a direct subsidiary of AEB and is an Edge Act corporation organized under the provisions of Section 25(a) of the Federal Reserve Act. The specified maturities of most of ACC's certificate products range from ten to twenty years. Within that maturity period, most certificates have interest crediting rate terms ranging from three to thirty-six months. Interest crediting rates are subject to change and certificate product owners can surrender their certificates without penalty at term end. Currently offered Ameriprise Certificates (listed above), as well as certain certificates previously issued by ACC (not listed above), contain renewal features which enable certificate owners to renew their certificate term until certificate maturity. Accordingly, certificate products that are currently outstanding in their renewal periods or are exercised for renewal in the future are, and continue to be, liabilities of ACC until their withdrawals or maturity whether or not such certificates are available for new sales. To ACC's knowledge, ACC is the largest issuer of face-amount certificates in the United States. However, such certificates compete with many other products (including investments) offered by banks, savings and loan associations, mutual funds, broker-dealers and others, which may be viewed by potential clients as offering a comparable or superior combination of safety and return on investment. In particular, some of ACC's products 5 are designed to be competitive with the types of investment offered by banks and thrifts. Since ACC's face-amount certificates are securities, their offer and sale are subject to regulation under federal and state securities laws. ACC's certificates are backed by ACC's qualified assets on deposit and are not insured by any governmental agency or other entity. ACC's certificate product payments received and certificate surrenders paid for products for each of the three years ended December 31 were (in millions)(2):
2005 2004 2003 ---- ---- ---- SINGLE PAYMENT CERTIFICATES - --------------------------- NON-QUALIFIED Payments through: AMPF $2,047.4 $1,650.5 $1,124.2 AEBI and AEB $ 655.8 $1,259.4 $1,095.4 Surrenders through: AMPF $1,690.2 $1,022.4 $1,039.2 AEBI and AEB $1,505.9 $ 980.0 $ 999.6 QUALIFIED Payments through: AMPF $ 512.1 $ 342.3 $ 312.4 Surrenders through: AMPF $ 352.3 $ 268.9 $ 292.6 INSTALLMENT PAYMENT CERTIFICATES - -------------------------------- Through AMPF NON-QUALIFIED Payments $ 27.8 $ 32.9 $ 38.6 Surrenders $ 34.6 $ 41.7 $ 47.9 QUALIFIED Payments $ 0.6 $ 0.5 $ 0.6 Surrenders $ 0.3 $ 0.4 $ 0.7 OTHER CERTIFICATES - ------------------ Payments $ - $ - $ - Surrenders $ 5.3 $ 5.8 $ 4.9
(2) Table includes information related to certificate products currently sold as well as certificate products that are no longer available for purchase. ACC's certificates are sold primarily by AMPF. For the years ended December 31, 2005 and 2004, respectively, 20 percent and 39 percent of single payment certificate products payments were through AEBI and AEB. For the year ended December 31, 2005 and 2004, respectively, ACC received 16 percent and 11 percent of payments on single payment certificate products and 2 percent of payments on installment certificate products in both 2005 and 2004 from tax-qualified certificate products for use in IRAs, 401(k) plans, and other qualified retirement plans. The certificates offered by AMPF are sold pursuant to a distribution agreement which is terminable on sixty days' notice and is subject to annual approval by ACC's Board of Directors, including a majority of the directors who are not "interested persons" of AMPF or ACC as that term is defined in the 1940 Act. The distribution agreement provides for the payment of distribution fees to AMPF for services provided. For the sale of the previously offered American Express Investors Certificate and the American Express Stock Market Certificate by AEBI, AMPF has a Selling Agent Agreement with AEBI. For the sale of Ameriprise Stock 6 Market Certificate, AMPF has a Selling Agent Agreement with Securities America Inc. These agreements are terminable upon sixty days' notice and subject to annual review by directors who are not "interested persons" of AMPF or ACC except that such annual review is not required for selling agent agreements. ACC has retained RiverSource Investments, LLC, a wholly owned subsidiary of Ameriprise Financial to manage ACC's investment portfolio under an investment management agreement, which is subject to annual review and approval by ACC's Board of Directors, including a majority of the directors who are not "interested persons" of AMPF, RiverSource Investments or ACC. On August 16, 2005 the Board approved the investment management agreement with Ameriprise Financial. Effective October 1, 2005 this agreement was transferred to RiverSource Investments, LLC and on November 7, 2005 the Board reapproved the agreement to run until December 31, 2006. ACC is required to maintain cash and "qualified assets" meeting the standards of Section 28(b) of the 1940 Act, as modified by an exemptive order of the Securities and Exchange Commission (the SEC). The amortized cost of such investments must be at least equal to ACC's net liabilities on all outstanding face-amount certificates plus $250,000. ACC's qualified assets consist of cash and cash equivalents, first mortgage loans on real estate and other loans, U.S. government and government agency securities, municipal bonds, corporate bonds, preferred stocks and other securities meeting specified standards. So long as ACC wishes to rely on the SEC order, as a condition to the order, ACC has agreed to maintain an amount of unappropriated retained earnings and capital equal to at least 5 percent of certificate reserves (less outstanding certificate loans). To the extent that payment of a dividend would decrease the capital ratio below the required 5 percent, payment of a dividend would be restricted. In determining compliance with this condition, qualified assets are valued in accordance with the provisions of Minnesota Statutes where such provisions are applicable. ACC has also entered into a written understanding with the State of Minnesota, Department of Commerce, that ACC will maintain capital equal to 5 percent of the assets of ACC (less outstanding certificate loans). To the extent that payment of a dividend would decrease this ratio below the required 5 percent, payment of a dividend would be restricted. When computing its capital for these purposes, ACC values its assets on the basis of statutory accounting for insurance companies rather than U.S. generally accepted accounting principles (GAAP). ACC is subject to annual examination and supervision by the State of Minnesota, Department of Commerce (Banking Division). ITEM 1A. RISK FACTORS. If any of the following risks and uncertainties develop into actual events, these events could have a material adverse effect on ACC's business, financial condition or results of operations. Based on the information currently known to the Company, ACC believes that the following information identifies the most significant risk factors affecting ACC in each of these categories of risk. However, the risks and uncertainties the Company faces are not limited to those described below. Additional risks and uncertainties not presently known to the Company or that ACC currently believe to be immaterial may also adversely affect ACC's business. RISKS RELATING TO ACC'S BUSINESS ACC'S RESULTS OF OPERATIONS MAY BE MATERIALLY AFFECTED BY MARKET FLUCTUATIONS AND BY ECONOMIC AND OTHER FACTORS. ACC's results of operations may be materially affected by market fluctuations, economic and other factors. Results of operations in the past have been, and in the future may continue to be, materially affected by many factors of a global nature, including political, economic and market conditions; the availability and cost of capital; the level and volatility of equity prices, commodity prices and interest rates; currency values and other market indices; technological changes and events; the availability and cost of credit; inflation; and investor sentiment and confidence in the financial markets. 7 These factors also may have an impact on the Company's ability to achieve its strategic objectives. ACC's financial condition and results of operations are affected by "spread", or the difference between the returns ACC earns on the investments that support its product obligations and the amounts that the Company must pay certificate holders. ACC's investment products are sensitive to interest rate fluctuations, and ACC's future costs associated with such variations may differ from its historical costs. During periods of increasing market interest rates, ACC must offer higher crediting rates on existing face-amount certificates. Because returns on invested assets may not increase as quickly as current interest rates, ACC may have to accept a lower spread and thus lower profitability or face a decline in sales and greater loss of existing certificates. In addition, increases in market interest rates may cause increased certificate surrenders as certificate holders seek to shift assets to products with perceived higher returns. This process may lead to an earlier than expected flow of cash out of ACC's business. Also, increases in market interest rates may result in the extension of the maturities of some of ACC's investment assets. These earlier outflows and asset maturity extensions may require investment assets to be sold at a time when the prices of those assets are lower because of the increase in market interest rates, which may result in realized investment losses. Increases in crediting rates, as well as surrenders and withdrawals, could have an adverse effect on ACC's financial condition and results of operations. During periods of falling interest rates, ACC's spread may be reduced. Because ACC may adjust the interest rates it credits on most of these products downward only at limited, pre-established intervals, and because some of them have guaranteed minimum crediting rates, ACC's spreads could decrease. Interest rate fluctuations could also have an adverse effect on the results of ACC's investment portfolio. During periods of declining market interest rates, the interest ACC receives on variable interest rate investments decreases. In addition, during those periods, ACC is forced to reinvest the cash it receives as interest or return of principal on its investments in lower-yielding high-grade instruments or in lower-credit instruments to maintain comparable returns. Issuers of fixed income securities also may decide to prepay their obligations in order to borrow at lower market rates. This exacerbates the risk that ACC may have to invest the cash proceeds of these securities in lower-yielding or lower-credit instruments. For additional information regarding the sensitivity of the fixed income securities in ACC's investment portfolio to interest rate fluctuations, see Item 7A of this Form 10-K--"Quantitative and Qualitative Disclosures about Market Risks." DEFAULTS IN ACC'S FIXED INCOME SECURITIES PORTFOLIO WOULD ADVERSELY AFFECT THE COMPANY'S EARNINGS. Issuers of the fixed income securities that ACC owns may default on principal and interest payments. As of December 31, 2005, 3 percent of ACC's investment portfolio had ratings below investment-grade. Moreover, economic downturns and corporate malfeasance can increase the number of companies, including those with investment-grade ratings, which default on their debt obligations, as occurred in 2001 and 2002. SOME OF ACC'S INVESTMENTS ARE RELATIVELY ILLIQUID. ACC invests a portion of its assets in privately placed fixed income securities and mortgage loans. Mortgage loans are relatively illiquid. ACC's investment manager periodically reviews ACC's private placement investments using adopted standards to categorize such investments as liquid or illiquid. As of December 31, 2005, mortgage loans and private placement fixed income securities that have been categorized as illiquid represented approximately 7.5 percent of the carrying value of ACC's investment portfolio. If ACC requires significant amounts of cash on short notice in excess of its normal cash requirements, ACC may have difficulty selling these investments in a timely manner, or be forced to sell them for an amount less than it would otherwise have been able to realize, or both. Any inability to quickly dispose of illiquid investments could have an adverse effect on ACC's financial condition and results of operations. 8 IF THE COUNTERPARTIES TO THE DERIVATIVE INSTRUMENTS ACC USES TO HEDGE CERTAIN CERTIFICATE LIABILITIES DEFAULT, ACC MAY BE EXPOSED TO RISKS IT HAD SOUGHT TO MITIGATE, WHICH COULD ADVERSELY AFFECT ACC'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS. ACC uses derivative instruments to hedge certain certificate liabilities. ACC enters into a variety of derivative instruments with a number of counterparties. If ACC's counterparties fail to honor their obligations under the derivative instruments, ACC's hedges of the related liabilities will be ineffective. That failure could have an adverse effect on ACC's financial condition and results of operations that could be material. IF ACC'S RESERVES FOR FUTURE CERTIFICATE REDEMPTIONS AND MATURITIES ARE INADEQUATE, ACC MAY BE REQUIRED TO INCREASE ITS RESERVE LIABILITIES, WHICH COULD ADVERSELY AFFECT ITS RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Investment certificates may be purchased either with a lump-sum payment or by installment payments. Certificate product owners are entitled to receive, at maturity, a definite sum of money. Payments from certificate owners are credited to investment certificate reserves. Investment certificate reserves accumulate interest at specified percentage rates as declared by ACC. Reserves also are maintained for advance payments made by certificate owners, accrued interest thereon, and for additional credits in excess of minimum guaranteed rates and accrued interest thereon. On certificates allowing for the deduction of a surrender charge, the cash surrender values may be less than accumulated investment certificate reserves prior to maturity dates. Cash surrender values on certificates allowing for no surrender charge are equal to certificate reserves. The payment distribution, reserve accumulation rates, cash surrender values, reserve values and other matters are governed by the 1940 Act. Certain certificates offer a return based on the relative change in a stock market index. The certificates with an equity-based return contain embedded derivatives, which are carried at fair value within investment certificate reserves on the balance sheets. The fair values of these embedded derivatives incorporate current market data inputs. Changes in fair value are reflected in provision for certificate reserves within the statements of income. ACC monitors its reserve levels continually. If the Company concluded its reserves were insufficient to cover actual or expected redemptions or maturities, ACC would be required to increase its reserves and incur income statement charges for the period in which it makes the determination. Such a determination could adversely affect ACC's results of operations and financial condition. ACC'S BUSINESS IS REGULATED, AND CHANGES IN REGULATION MAY REDUCE THE COMPANY'S PROFITABILITY AND LIMIT ITS GROWTH. ACC operates in a regulated industry. Various regulatory and governmental bodies have the authority to review ACC's products and business practices and to bring regulatory or other legal actions against ACC if, in their view, ACC's practices are improper. Changes in these regulations may lead to increased fees to services providers. CONFLICTS OF INTEREST ARE INCREASING AND A FAILURE TO APPROPRIATELY DEAL WITH CONFLICTS OF INTEREST COULD ADVERSELY AFFECT ACC'S BUSINESS. ACC has to address potential conflicts of interest, including those relating to the activities of its affiliated entities. For example, conflicts may arise between ACC's position as a manufacturer of certificate products and the position of an ACC affiliate, AMPF, as the distributor of these products. ACC and its affiliated entities have procedures and controls in place that are designed to address conflicts of interest. Appropriately dealing with conflicts of interest, however, is complex and difficult and the enterprise's reputation could be damaged if it fails, or appears to fail, to deal appropriately with conflicts of interest. In addition, the SEC and other federal and state regulators have increased their scrutiny of potential conflicts of interest. It is possible that potential or perceived conflicts could give rise to litigation or enforcement actions. 9 It is possible that the regulatory scrutiny of, and litigation in connection with, conflicts of interest could make the enterprise's clients less willing to enter into transactions in which such a conflict may occur, and could adversely affect ACC's business. FAILURE OF ACC'S SERVICE PROVIDERS TO PERFORM THEIR RESPONSIBILITIES COULD ADVERSELY AFFECT ACC'S BUSINESS. ACC's business operations, including investment management, transfer agent, custody and distribution services, are performed by affiliated service providers pursuant to formal contracts. The failure of a service provider to fulfill its responsibilities could have an adverse effect on ACC's financial condition and results of operations that could be material. RISKS RELATING TO ACC'S SEPARATION FROM AMERICAN EXPRESS ACC'S PARENT MAY NOT HAVE SUFFICIENT ABILITY TO GENERATE CAPITAL NECESSARY TO MEET ACC'S OPERATING AND REGULATORY CAPITAL REQUIREMENTS. As stated above in Item 1 - Business, ACC is required to meet certain regulatory capital requirements. At certain times ACC's parent company, Ameriprise Financial, may be requested to provide capital to ACC to enable ACC to meet these regulatory requirements. Ameriprise Financial's ability to satisfy such a request will be dependent on its financial condition at the time of the request. The failure to satisfy such a request could have an adverse effect on ACC's financial condition and results of operations that could be material. Although American Express made a $1.1 billion capital contribution to Ameriprise Financial to cover, among other things, certain separation costs and the costs to establish new brands, ACC cannot be certain that this capital contribution will be sufficient to cover all of the additional one-time costs of Ameriprise Financial's operating subsidiaries, including ACC. If it is not sufficient, ACC's financial condition could be adversely affected. AS AMERIPRISE FINANCIAL BUILDS ITS INFORMATION TECHNOLOGY INFRASTRUCTURE AND TRANSITIONS ITS DATA TO ITS OWN SYSTEMS AND THAT OF ITS AFFILIATES, SUCH AS ACC, IT COULD EXPERIENCE TEMPORARY BUSINESS INTERRUPTIONS AND INCUR SUBSTANTIAL ADDITIONAL COSTS. IN ADDITION, ACC RELIES ON AMERICAN EXPRESS FOR DISASTER RECOVERY AND MAY EXPERIENCE DIFFICULTIES IN DEVELOPING ITS OWN DISASTER RECOVERY CAPABILITY. Ameriprise Financial and hence ACC is in the process of installing and implementing information technology infrastructure to support its business functions, including accounting and reporting, customer service and distribution. ACC anticipates this will involve significant costs. ACC may incur temporary interruptions in business operations if it cannot transition effectively from American Express's existing technology infrastructure (which covers hardware, applications, network, telephony, databases, backup and recovery solutions), as well as the people and processes that support them. ACC may not be successful in implementing its new technology infrastructure and transitioning its data, and ACC may incur substantially higher costs for implementation than currently anticipated. ACC's failure to avoid operational interruptions as it implements the new infrastructure and transitions its data, or its failure to implement the new infrastructure and transition its data successfully, could disrupt its business and have a material adverse effect on its profitability. In addition, technology service failures could have adverse regulatory consequences for ACC's business and make it vulnerable to its competitors. Ameriprise Financial and hence ACC continues to rely on American Express's disaster recovery capabilities as part of its business continuity processes. ACC will only have the right to use American Express's disaster recovery resources for up to two years after September 30, 2005. ACC will be required to develop and implement its own disaster recovery infrastructure and develop business continuity for its operations, which it anticipates will involve significant costs. ACC may not be successful in developing stand-alone disaster recovery capabilities and business continuity processes, and may incur substantially higher costs for implementation than currently anticipated. 10 ACC's failure to avoid operational interruptions as it implements new business continuity processes, or its failure to implement the new processes successfully, could disrupt its business and have a material adverse effect on its profitability in the event of a significant business disruption. ACC'S SEPARATION FROM AMERICAN EXPRESS COULD INCREASE ITS U.S. FEDERAL INCOME TAX COSTS. Due to the Separation, Ameriprise Financial and other members of the affiliated group, including ACC, will not be able to file a consolidated U.S. federal income tax return with Ameriprise Financial's life insurance subsidiaries for five tax years following September 30, 2005. As a consequence, during this period, net operating and capital losses, credits, and other tax attributes generated by one group will not be available to offset income earned or taxes owed by the other group for U.S. federal income tax purposes. Any benefits relating to taxes arising from being part of the larger American Express Company group may also not be available. As a result of these and other inefficiencies, the aggregate amount of U.S. federal income tax that ACC pays may increase and ACC may in addition not be able to fully realize certain of its deferred tax assets. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES None. ITEM 3. LEGAL PROCEEDINGS ACC may be a party to litigation and arbitration proceedings in the ordinary course of its business. The outcome of any litigation or threatened litigation cannot be predicted with any certainty. However, in the aggregate, ACC does not consider any lawsuits in which it is named as a defendant to have a material impact on ACC's financial position or operating results. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Item omitted pursuant to General Instructions I (2)(c) of Form 10-K. 11 PART II ------- ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS There is no market for ACC's common stock since it is a wholly-owned subsidiary of Ameriprise Financial. Frequency and amount of capital transactions with Ameriprise Financial during the past two years were (in millions):
Receipt of Dividends Paid Capital from to Ameriprise Ameriprise For the year ended December 31, 2005: Financial Financial December 31, 2005 $ 25 $ - ------------- ------------- Total $ 25 $ - ============= ============= For the year ended December 31, 2004: Return of Receipt of Capital to Capital from Ameriprise Ameriprise Financial Financial March 31, 2004 $ 10 $ - June 30, 2004 10 - December 31, 2004 - 20 ------------- ------------- Total $ 20 $ 20 ============= =============
Restriction on ACC's present or future ability to make return of capital payments or to pay dividends to Ameriprise Financial: Certain series of installment certificate products outstanding provide that cash dividends may be paid by ACC only in calendar years for which additional credits of at least 1/2 of 1 percent on such series of certificates have been authorized by ACC. This requirement has been met for 2005 and 2004 by ACC's declaration of additional credits in meeting this requirement. Appropriated retained earnings resulting from the pre-declaration of additional credits to ACC's certificate product owners are not available for the payment of dividends by ACC. In addition, ACC will discontinue issuance of certificates subject to the pre-declaration of additional credits and will make no further pre-declaration as to outstanding certificates if at any time the capital and unappropriated retained earnings of ACC should be less than 5 percent of net certificate reserves (certificate reserves less certificate loans). At December 31, 2005, the capital and unappropriated retained earnings amounted to 5.8 percent of net certificate reserves. ITEM 6. SELECTED FINANCIAL DATA Item omitted pursuant to General Instructions I (2)(a) of Form 10-K. 12 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the accompanying audited financial statements and related notes included elsewhere in this report. The following discussion may contain forward-looking statements that reflect ACC's plans, estimates and beliefs. ACC's actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below under the heading "Forward-Looking Statements" and elsewhere in this report, particularly in "Risk Factors." RESULTS OF OPERATIONS Ameriprise Certificate Company's net income is derived primarily from the after-tax yield on investments and realized investment gains (losses), less investment expenses and interest credited on certificate reserve liabilities. Changes in net income trends occur largely due to changes in investment returns in ACC's portfolio, from realization of investment gains (losses), and from changes in interest crediting rates to certificate products. ACC follows U.S. generally accepted accounting principles (GAAP). Net income in 2005 decreased $20.0 million, or 40.2 percent, reflecting realized losses on securities of unaffiliated issuers in 2005 compared to realized gains in 2004. There was also an increased net provision for certificate reserves offset primarily by increased net investment income. Net income in 2004 decreased $3.3 million, or 6.3 percent, reflecting an increase in investment expenses which was mainly due to the write-off of previously deferred distribution fees paid to AMPF. In 2005, investment income increased $46.9 million, or 17.6 percent, primarily due to higher average volumes and slightly increased rates of return on investments offset by a decrease in net pre-tax gains on equity index options due to the effect of lower appreciation in the S&P 500 on the value of options hedging outstanding stock market certificates. In 2004, investment income increased $1.4 million, or 0.5 percent, reflecting a slight increase in investment income from Available-for-Sale securities offset by a decrease in net pre-tax gains on equity index options due to the effect of lower appreciation in the S&P 500 on the value of options hedging outstanding stock market certificates. In 2005, net provision for certificate reserves increased $59.3 million or 42.4 percent reflecting higher average volumes and general increases in interest rates driven by the higher short-term interest rate environment. In 2004, provision for certificate reserves decreased $1.5 million or 1.1 percent reflecting lower appreciation in the S&P 500. In 2005, there were $16.4 million of net realized losses on investments compared to $4.6 million in net realized gains on investments in 2004. Included in net realized gains and losses on investments are gross realized gains and losses on sales of securities, as well as other-than-temporary impairment losses on investments using the specific identification method, as noted in the table below for the years ended December 31: 2005 2004 ----------------------- (in millions) Available-for-Sale securities: Gross realized gains from sales $ 2.0 $ 6.1 Gross realized losses from sales $(19.4) $(1.1) Other-than-temporary impairments $ - $(0.6) Other, net $ 1.0 $ 0.2 CRITICAL ACCOUNTING POLICIES The accounting and reporting policies that ACC uses affect its financial statements. Certain of ACC's accounting and reporting policies are critical to an understanding of ACC's results of operations and financial condition, and in some cases the application of these policies can be affected by the estimates, judgments and assumptions made by management during the preparation of the Company's financial statements. 13 See Note 1 of ACC's financial statements for further information about the Company's accounting policies. RECENT ACCOUNTING PRONOUNCEMENTS For information regarding recent accounting pronouncements and their expected impact on the Company's future results of operations or financial condition, see Note 1 to ACC's financial statements. INVESTMENT SECURITIES VALUATION Generally, investment securities are carried at fair value on the balance sheet with unrealized gains (losses) recorded in accumulated other comprehensive income (loss) within equity, net of income tax provisions (benefits). At December 31, 2005, ACC had net unrealized pretax losses on Available-for-Sale securities of $88.5 million. Gains and losses are recognized in results of operations upon disposition of the securities. In addition, losses are recognized when management determines that a decline in value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default or bankruptcy. ACC also considers the extent to which cost exceeds fair value, the duration and size of that gap, and management's judgment about the issuer's current and prospective financial condition, as well as, ACC's ability and intent to hold until recovery. As of December 31, 2005, there were $96.7 million in gross unrealized losses that related to $4.3 billion of securities, of which $1.4 billion has been in a continuous unrealized loss position for twelve months or more. As part of its ongoing monitoring process, management has determined that a majority of the gross unrealized losses on these securities are attributable to changes in interest rates. Additionally, ACC has the ability and intent to hold these securities for a time sufficient to recover its amortized cost and has, therefore, concluded that none of these securities is other-than-temporarily impaired at December 31, 2005. LIQUIDITY AND CAPITAL RESOURCES ACC's principal sources of cash are receipts from sales of face-amount certificate products and cash flows from investments. ACC's principal uses of cash are payments to certificate product owners for matured and surrendered certificates, purchases of investments, and return of capital or dividend payments to Ameriprise Financial. Cash received from sales of certificates totaled $3.2 billion and $3.3 billion for the years ended December 31, 2005 and 2004, respectively. Certificate maturities and cash surrenders totaled $3.6 billion and $2.4 billion for the years ended December 31, 2005 and 2004, respectively. Cash provided by investing activities was $0.2 billion in 2005. Cash used in investing activities was $1.1 billion in 2004. This change was primarily due to an increase in sales, maturities and redemptions of Available-for-Sale securities and a decrease in purchases of Available-for-Sale securities. Cash used in financing activities was $0.2 billion in 2005. Cash provided by financing activities was $1.1 billion in 2004. The change is due primarily to an increase in certificate maturities and cash surrenders partially offset by an increase in net provisions for certificate reserves. ACC paid Ameriprise Financial dividends of $25 million and return of capital of $20 million during 2005 and 2004, respectively. In 2004, ACC also received a capital contribution of $20 million from Ameriprise Financial. ACC, as an issuer of face-amount certificates, is impacted by significant changes in interest rates as interest crediting rates on certificate products generally reset at shorter intervals than the change in the yield on ACC's investment portfolio. The specified maturities of most of ACC's certificate products range from ten to twenty years. Within that maturity period, most certificates have interest crediting rate terms ranging from three to thirty-six months. Interest crediting rates are subject to change and certificate product owners can surrender their certificates without penalty at term end. ACC has investment certificate obligations totaling $5.6 billion of which $5.0 billion have terms ending in 2006, $0.4 billion have terms ending in 2007 and $0.2 billion have terms ending in 2008. 14 Contract holders have the right to redeem the investment certificates earlier and at their discretion subject to a surrender charge. Mid-term redemptions are most likely to occur in periods of dramatic increases in interest rates. ACC has investments in mortgage and asset-backed securities, and to a lesser extent, intermediate term corporate debt securities. ACC may enter into interest rate swap contracts that effectively lengthen the rate reset interval on certificate products. As a result of interest rate fluctuations, the amount of interest paid on hedged liabilities will positively or negatively impact reported earnings. Income or loss on the derivative instruments that are linked to the hedged liabilities will generally offset the effect of this impact. On two series of ACC's certificates, interest is credited to certificate products based upon the relative change in a major stock market index between the beginning and end of the certificates' terms. To meet the obligations related to the provisions of these equity market sensitive certificates, ACC purchases and writes index call options on a major stock market index and, from time to time, enters into futures contracts. ACC's investment program is designed to maintain an investment portfolio that will produce competitive portfolio yields within acceptable risk and liquidity parameters. ACC's investment program considers investment securities as investments acquired to meet anticipated certificate owner obligations. Debt securities and marketable equity securities are classified as Available-for-Sale and are carried at fair value. The Available-for-Sale classification does not mean ACC expects to sell these securities, but rather these securities are available to meet possible liquidity needs should there be significant changes in market interest rates or certificate owner redemptions. At December 31, 2005, securities classified as Available-for-Sale were carried, in the aggregate, at a fair market value of $5.3 billion. Investments primarily include mortgage and asset-backed securities and corporate debt securities. Of these securities, 97 percent are investment grade. ACC's corporate debt securities are a diverse portfolio with concentrations in the following industries: banking and finance, utilities, communications, food processing and transportation. Other than U.S. Government Agency mortgage-backed securities, no one issuer represents more than 1 percent of the fair market value of ACC's total investment portfolio. The ratio of shareholder's equity, excluding accumulated other comprehensive income (loss) net of tax, to total assets less certificate loans and net unrealized gains (losses) on securities classified as Available-for-Sale (the Capital-to-Assets Ratio) at December 31, 2005 and 2004, was 5.5 percent and 5.2 percent, respectively. In accordance with a written understanding with the State of Minnesota, Department of Commerce, ACC has agreed to maintain at all times a minimum Capital-to-Assets Ratio of 5 percent. In addition, ACC is required to maintain cash and "qualified investments" meeting the standards of Section 28(b) of the 1940 Act, as modified by an exemptive order of the SEC. The amortized cost of such investments must be at least equal to ACC's net liabilities on all outstanding face-amount certificates plus $250,000. So long as ACC wishes to rely on the SEC order, as a condition to the order, ACC has agreed to maintain an amount of unappropriated retained earnings and capital equal to at least 5 percent of net certificate reserves. IMPACT OF MARKET VOLATILITY ON RESULTS OF OPERATIONS ACC has two principal components of market risk: interest rate risk and equity market risk. Interest rate risk results from investing in assets that are somewhat longer and reset less frequently than the liabilities they support. ACC manages interest rate risk through the use of a variety of tools that include derivative financial instruments, such as interest rate swaps, caps, and floors, which change the interest rate characteristics of client liabilities or investment assets. Because certain of the provisions for certificates are impacted by the value of equity indices from time to time ACC enters into risk management strategies that may include the use of equity derivative financial instruments, such as equity options, to mitigate ACC's exposure to volatility in the equity markets. Ameriprise Financial's Asset Liability Committee (ALCO), which is comprised of senior business managers, holds regularly scheduled meetings to review models projecting various interest rate scenarios and risk/return measures and their effect on various portfolios managed by RiverSource Investments, including that of ACC. ACC's Board of Directors has appointed the ALCO as the investment committee of ACC. The ALCO's objectives are to structure ACC's portfolio of investment securities based upon the type and behavior of the certificates in the certificate reserve liabilities, to achieve targeted levels of profitability within defined risk parameters and to meet certificate contractual obligations. 15 Part of the investment committee's strategy could include entering into interest rate swaps to hedge interest rate risk; however, at December 31, 2005 ACC did not hold any interest rate swaps. ACC primarily invests in mortgage and asset-backed securities, and intermediate term corporate debt securities to provide its certificate owners with a competitive rate of return on their certificate while managing risk. These investments provide ACC with a historically dependable and targeted margin between the interest rate earned on investments and the interest rate credited to certificate owners' accounts. ACC does not invest in securities to generate short-term trading profits for its own account. ACC is exposed to risk associated with fluctuating interest payments from certain certificate products tied to the London Interbank Offering Rate (LIBOR). As such, certificate product interest crediting rates reset at shorter intervals than the changes in the investment portfolio yield related to new investments and reinvestments. Therefore, ACC's spreads may be negatively impacted by increases in the general level of interest rates. ACC may hedge the risk of rising interest rates by entering into pay-fixed, receive-variable (LIBOR-based) interest rate swaps that convert fluctuating crediting rate payments to fixed payments, effectively protecting ACC from unfavorable interest rate movements. The interest rate swaps, when utilized, are treated as cash flow hedges per Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities". ACC offers Ameriprise Stock Market Certificates (SMC) that offer a return based upon the relative change in a major stock market index between the beginning and end of the SMC's term. The SMC product contains an embedded derivative, essentially the equity based return of the certificate that must be separated from the host contract and accounted for as a derivative instrument. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivative, the amount of expenses incurred by ACC related to SMC will positively or negatively impact reported earnings. As a means of hedging its obligations under the provisions for these certificates, ACC purchases and writes call options on the major stock market index. ACC views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. The sensitivity analysis of two different tests of market risk discussed below estimate the effects of hypothetical sudden and sustained changes in the applicable market conditions on the ensuing year's earnings based on year-end positions. The market changes, assumed to occur as of year-end, are a 100 basis point increase in market interest rates and a 10 percent decline in a major stock market index. Computation of the prospective effects of hypothetical interest rate and major stock market index changes are based on numerous assumptions, including relative levels of market interest rates and the major stock market index level, as well as the levels of assets and liabilities. The hypothetical changes and assumptions presented will be different than what actually occurs in the future. Furthermore, the computations do not anticipate actions that may be taken by management if the hypothetical market changes occur over time. As a result, actual earnings effects in the future will differ from those quantified below. The negative impact on ACC's annual pretax income of a 100 basis point increase in interest rates, which assumes certificate product interest crediting rate reset intervals and customer behavior based on the application of proprietary models, to the book of business at December 31, 2005 and 2004, would be $11.4 million and $15.1 million, respectively. A 10 percent decrease in the level of a major stock market index would have no impact on ACC's annual pretax income as of December 31, 2005 and a minimal impact on ACC's annual pretax income as of December 31, 2004, since the income effect is a decrease in option-related income and a corresponding decrease in interest credited to the SMC and Ameriprise Market Strategy Certificate product owners' accounts. 16 FORWARD-LOOKING STATEMENTS Certain statements in Item 7. of this Form 10-K Annual Report contain forward-looking statements, which are subject to risks and uncertainties. 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. 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. ACC undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: ACC's ability to successfully implement a business model that allows for significant net income growth based on revenue growth that is lower than historical levels, including the ability to improve its operating expense to revenue ratio both in the short-term and over time, which will depend in part on the effectiveness of reengineering and other cost control initiatives, as well as factors impacting ACC's revenues; ACC's ability to grow its business, over time, which will depend on ACC's ability to manage its capital needs and the effect of business mix; the ability to increase investment spending, which will depend in part on the equity markets and other factors affecting revenues, and the ability to capitalize on such investments to improve business metrics; the accuracy of certain critical accounting estimates, including the fair value of the assets in ACC's investment portfolio (including those investments that are not readily marketable), fluctuation in the equity and fixed income markets, which can affect the amount and types of certificate products sold by ACC, potential deterioration in ACC's high-yield and other investments, which could result in further losses in ACC's investment portfolio; the ability of ACC to sell certain high-yield investments at expected values and within anticipated timeframes and to maintain its high-yield portfolio at certain levels in the future; and spreads in the certificate businesses; credit trends and the rate of bankruptcies, which can affect returns on ACC's investment portfolios; fluctuations in foreign currency exchange rates, which could affect commercial activities, among other businesses, or restrictions on convertibility of certain currencies; changes in laws or government regulations, including tax laws affecting ACC's businesses or that may affect the sales of the products and services that it offers, and regulatory activity in the areas of customer privacy, consumer protection, business continuity and data protection; the adoption of recently issued accounting rules related to the consolidation of variable interest entities, including those involving collateralized debt obligations and secured loan trusts, that ACC invests in, which could affect both ACC's balance sheet and results of operations; and outcomes and costs associated with litigation and compliance and regulatory matters. A further description of these and other risks and uncertainties can be found in ACC's other reports filed with the SEC. See "Item 1A-Risk Factors" for further discussion of risks. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Items required under this section are included in the Management's Discussion and Analysis of Financial Condition and Results of Operations under the section titled "Impact of Recent Market-Volatility on Results of Operations". ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Index to Financial Statements at page F-1 hereof. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ITEM 9A. CONTROLS AND PROCEDURES ACC maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the SEC, including controls and procedures designed to ensure that this information is accumulated and communicated to ACC's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. 17 It should be noted that, because of inherent limitations, ACC's disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met. ACC's management, with the participation of its 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, ACC's Chief Executive Officer and Chief Financial Officer have concluded that ACC's disclosure controls and procedures were effective at a reasonable level of assurance as of December 31, 2005. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING American Express has historically provided a variety of corporate and other support services for ACC, including information technology, treasury, accounting, financial reporting, tax administration, human resources, marketing, legal, procurement and other services. American Express will continue to provide ACC with many of these services pursuant to a transition services agreement for a transition period of up to September 30, 2007. ACC is now relying upon American Express as a third party to perform these services, many of which may impact its financial reporting processes. During this transition there have been some changes in personnel and in relative responsibility for oversight of the processes. ACC considers this a material change in its internal control over financial reporting. Other than the changes mentioned above, no other changes in ACC's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter of the year to which this report relates have materially affected, or are reasonably likely to materially affect, ACC's internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Item omitted pursuant to General Instructions I (2)(c) of Form 10-K. ITEM 11. EXECUTIVE COMPENSATION Item omitted pursuant to General Instructions I (2)(c) of Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Item omitted pursuant to General Instructions I (2)(c) of Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Item omitted pursuant to General Instructions I (2)(c) of Form 10-K. 18 PART III -------- ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The Board of Directors of ACC, at the recommendation of its Audit Committee has appointed Ernst & Young LLP (Ernst & Young) as its independent registered public accounting firm to audit the financial statements of ACC for the years ended December 31, 2005 and 2004. AUDIT FEES The aggregate fees billed or to be billed by Ernst & Young for each of the last two years for professional services rendered for the audit of ACC's annual financial statements and services that were provided in connection with statutory and regulatory filings were $118,000 for 2005 and $113,000 for 2004. AUDIT-RELATED FEES ACC was not billed by Ernst & Young for any fees for audit-related services for 2005 or 2004. TAX FEES ACC was not billed by Ernst & Young for any tax fees for 2005 or 2004. ALL OTHER FEES ACC was not billed by Ernst & Young for any other fees for 2005 or 2004. POLICY ON PRE-APPROVAL OF SERVICES PROVIDED BY INDEPENDENT AUDITOR Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the terms of the engagement of Ernst & Young are subject to the specific pre-approval of the Audit Committee of Ameriprise Financial. All audit and permitted non-audit services to be performed by Ernst & Young for ACC require pre-approval by the Audit Committee of Ameriprise Financial in accordance with pre-approval procedures established by the Audit Committee of Ameriprise Financial. The procedures require all proposed engagements of Ernst & Young for services to ACC of any kind to be directed to the General Auditor of Ameriprise Financial and then submitted for approval to the Audit Committee of Ameriprise Financial prior to the beginning of any services. In addition, the charter of ACC's Audit Committee requires pre-approval of any engagement, including the fees and other compensation, of Ernst & Young (1) to provide any services to ACC and prohibits the performance of certain specified non-audit services, and (2) to provide any non-audit services to Ameriprise Financial or any affiliate of Ameriprise Financial that controls, is controlled by, or under common control with Ameriprise Financial. Certain exceptions apply to the pre-approval requirement. 19 PART IV ------- ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. Financial Statements: --------------------- See Index to Financial Statements on page F-1 hereof. 2. Financial Statement Schedules: ------------------------------ See Index to Financial Statements on page F-1 hereof. 3. Exhibits: --------- See Exhibit Index on pages E-1 through E-3 hereof. 20 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REGISTRANT Ameriprise Certificate Company BY /s/ Paula R. Meyer --------------------------------------- NAME AND TITLE Paula R. Meyer, President and Director (Principal Executive Officer) DATE March 10, 2006 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. BY /s/ Brian J. McGrane --------------------------------------- NAME AND TITLE Brian J. McGrane, Senior Vice President and Chief Financial Officer (Principal Financial Officer) DATE March 10, 2006 BY /s/ David K. Stewart --------------------------------------- NAME AND TITLE David K. Stewart, Vice President and Controller (Principal Accounting Officer) DATE March 10, 2006 BY /s/ Rodney P. Burwell* --------------------------------------- NAME AND TITLE Rodney P. Burwell, Director DATE March 10, 2006 BY /s/ Jean B. Keffeler* --------------------------------------- NAME AND TITLE Jean B. Keffeler, Director DATE March 10, 2006 BY /s/ Thomas R. McBurney* --------------------------------------- NAME AND TITLE Thomas R. McBurney, Director DATE March 10, 2006 BY /s/ Karen M. Bohn* --------------------------------------- NAME AND TITLE Karen M. Bohn, Director DATE March 10, 2006 *By /s/ Paula R. Meyer ------------------- Name: Paula R. Meyer - ---------------------- Executed by Paula R. Meyer on behalf of those indicated pursuant to a Power of Attorney, dated February 9, 2006, filed electronically on or about March 10, 2006 as Exhibit 24(a) here to. 21 INDEX TO FINANCIAL STATEMENTS AND SCHEDULES FINANCIAL STATEMENTS: Part I. Financial Information: Item 1. Financial Statements Report of Independent Registered Public Accounting Firm F-2 Balance Sheets - December 31, 2005 and 2004 F-3 Statements of Income - Years ended December 31, 2005, 2004 and 2003 F-5 Statements of Cash Flows - Years ended December 31, 2005, 2004 and 2003 F-6 Statements of Comprehensive Income -Years ended December 31, 2005, 2004 and 2003 F-7 Statements of Shareholder's Equity - Years ended December 31, 2005, 2004 and 2003 F-8 Notes to Financial Statements F-9 SCHEDULE NO.: Financial Schedules: I Investments in Securities of Unaffiliated Issuers, December 31, 2005 F-25 II Investments in and Advances to Affiliates and Income thereon, December 31, 2005, 2004 and 2003 F-39 III Mortgage Loans on Real Estate and Interest earned on Mortgages, year ended December 31, 2005 F-40 V Qualified Assets on Deposit, December 31, 2005 F-44 VI Certificate Reserves, year ended December 31, 2005 F-45 VII Valuation and Qualifying Accounts, years ended December 31, 2005, 2004 and 2003 F-57
Schedules I, III, V and VI for the years ended December 31, 2005 and 2004 are included in Registrant's Annual Reports on Form 10-K, and are incorporated herein by reference. All other Schedules required by Article 6 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted. F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders Ameriprise Certificate Company We have audited the accompanying balance sheets of Ameriprise Certificate Company (formerly known as American Express Certificate Company), a wholly-owned subsidiary of Ameriprise Financial, Inc., as of December 31, 2005 and 2004, and the related statements of income, comprehensive income, shareholder's equity and cash flows for the three years in the period ended December 31, 2005. Our audits also include the financial statement schedules listed in the index at Item 8. These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of investments owned as of December 31, 2005 and 2004, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2005 and 2004, the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as whole, present fairly in all material respects the information set forth therein. /s/ Ernst & Young LLP - --------------------- Minneapolis, Minnesota February 27, 2006 F-2 AMERIPRISE CERTIFICATE COMPANY BALANCE SHEETS DECEMBER 31, 2005 AND 2004 (in thousands, except share data)
2005 2004 ---------- ---------- ASSETS QUALIFIED ASSETS Investments in unaffiliated issuers: Cash and cash equivalents $ 119,100 $ 35,212 Available-for-Sale securities 5,263,814 5,603,789 First mortgage loans on real estate and other loans 430,751 461,211 Certificate loans - secured by certificate reserves 11,305 13,006 ---------- ---------- Total investments 5,824,970 6,113,218 ---------- ---------- Receivables: Dividends and interest 39,142 42,162 Investment securities sold 2,336 3,699 ---------- ---------- Total receivables 41,478 45,861 ---------- ---------- Equity index options 73,942 116,285 ---------- ---------- Total qualified assets 5,940,390 6,275,364 ---------- ---------- OTHER ASSETS Deferred taxes, net 60,268 34,483 Due from other affiliates 2,545 1,939 ---------- ---------- Total other assets 62,813 36,422 ---------- ---------- Total assets $6,003,203 $6,311,786 ========== ========== See Notes to Financial Statements
F-3 AMERIPRISE CERTIFICATE COMPANY BALANCE SHEETS (CONTINUED) DECEMBER 31, 2005 AND 2004 (in thousands, except share data)
2005 2004 ---------- ---------- LIABILITIES AND SHAREHOLDER'S EQUITY LIABILITIES Certificate Reserves Installment certificates: Reserves to mature $ 87,884 $ 116,637 Additional credits and accrued interest 2,632 3,092 Advance payments and accrued interest 369 474 Other 1 2 Fully paid certificates: Reserves to mature 5,523,029 5,666,939 Additional credits and accrued interest 34,689 48,053 Due to unlocated certificate holders 31 46 ---------- ---------- Total certificate reserves 5,648,635 5,835,243 ---------- ---------- Accounts Payable and Accrued Liabilities: Due to Ameriprise Financial 197 1,190 Due to other affiliates 1,885 687 Current taxes payable 2,255 16,096 Payable for investment securities purchased 6,630 25,541 Equity index options and other liabilities 67,856 89,960 ---------- ---------- Total accounts payable and accrued liabilities 78,823 133,474 ---------- ---------- Total liabilities 5,727,458 5,968,717 ---------- ---------- SHAREHOLDER'S EQUITY Common shares ($10 par value, 150,000 shares authorized and issued) 1,500 1,500 Additional paid-in capital 323,844 323,844 Retained earnings: Appropriated for pre-declared additional credits and interest 3,196 549 Appropriated for additional interest on advance payments 15 15 Unappropriated 4,745 2,712 Accumulated other comprehensive (loss) income - net of tax (57,555) 14,449 ---------- ---------- Total shareholder's equity 275,745 343,069 ---------- ---------- Total liabilities and shareholder's equity $6,003,203 $6,311,786 ========== ========== See Notes to Financial Statements
F-4 AMERIPRISE CERTIFICATE COMPANY STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (in thousands)
2005 2004 2003 -------- -------- ------- INVESTMENT INCOME Interest income from unaffiliated investments: Available-for-Sale securities $265,125 $213,125 $204,932 Mortgage loans on real estate and other loans 27,358 26,232 27,093 Certificate loans 672 772 933 Dividends 1,813 3,348 5,074 Equity index options 15,699 25,639 29,538 Interest rate swap agreements (124) (5,367) (5,301) Other 1,944 1,879 1,969 -------- -------- -------- Total investment income 312,487 265,628 264,238 -------- -------- -------- INVESTMENT EXPENSES Ameriprise Financial and affiliated company fees: Distribution 33,980 37,960 29,731 Investment advisory and services 12,141 10,940 10,436 Transfer agent 3,859 3,522 3,378 Depository 395 414 349 Other 581 1,162 523 -------- -------- -------- Total investment expenses 50,956 53,998 44,417 -------- -------- -------- NET INVESTMENT INCOME BEFORE PROVISION FOR CERTIFICATE RESERVES AND INCOME TAX EXPENSE 261,531 211,630 219,821 -------- -------- -------- Provision for Certificate Reserves According to the terms of the certificates: Provision for certificate reserves 6,568 6,416 6,043 Interest on additional credits 257 348 425 Interest on advance payments 13 16 17 Additional credits/interest authorized by ACC: On fully paid certificates 191,365 131,888 132,975 On installment certificates 2,650 2,650 3,379 -------- -------- -------- Total provision for certificate reserves before reserve recoveries 200,853 141,318 142,839 Reserve recoveries from terminations prior to maturity (1,603) (1,360) (1,356) -------- -------- -------- Net provision for certificate reserves 199,250 139,958 141,483 -------- -------- -------- NET INVESTMENT INCOME BEFORE INCOME TAX EXPENSE 62,281 71,672 78,338 Income tax expense 21,949 25,040 27,296 -------- -------- -------- Net investment income 40,332 46,632 51,042 -------- -------- -------- NET REALIZED (LOSS) GAIN ON INVESTMENTS Securities of unaffiliated issuers before income tax (benefit) expense (16,388) 4,616 2,944 Income tax (benefit) expense (5,736) 1,615 1,031 -------- -------- -------- Net realized (loss) gain on investments (10,652) 3,001 1,913 -------- -------- -------- NET INCOME $ 29,680 $ 49,633 $ 52,955 ======== ======== ======== See Notes to Financial Statements
F-5 AMERIPRISE CERTIFICATE COMPANY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (in thousands)
2005 2004 2003 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 29,680 $ 49,633 $ 52,955 Adjustments to reconcile net income to net cash provided by operating activities: Interest added to certificate loans (442) (530) (630) Amortization of premiums, accretion of discounts, net 16,201 17,915 14,907 Deferred taxes, net 12,987 (9,127) (38,877) Net realized loss (gain) on investments before income tax provision 16,388 (4,616) (2,944) Changes in other operating assets and liabilities: Deferred distribution fees, net - 6,453 (479) Equity index options purchased and written, net 7,652 (946) 44,273 Dividends and interest receivable 3,020 (6,155) (1,893) (Due from) due to Ameriprise Financial - federal income taxes (13,014) 37,553 - Other assets and liabilities, net 10,959 (114) (6,856) ----------- ----------- ----------- Net cash provided by operating activities 83,431 90,066 60,456 ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Available-for-Sale securities: Sales 804,177 124,575 1,132,131 Maturities and redemptions 1,051,692 842,427 1,305,953 Purchases (1,659,895) (2,126,951) (2,626,239) Other investments: Sales 30,447 25,022 16,972 Maturities and redemptions 109,025 128,463 117,159 Purchases (107,985) (144,660) (231,478) Certificate loans: Payments 1,352 1,902 2,805 Fundings (1,175) (1,558) (1,553) Changes in amounts due to and from brokers, net (17,539) 20,615 (238,262) ----------- ----------- ----------- Net cash provided by (used in) investing activities 210,099 (1,130,165) (522,512) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Payments from certificate owners 3,243,729 3,285,610 2,571,209 Net provision for certificate reserves 199,250 139,958 141,483 Certificate maturities and cash surrenders (3,627,621) (2,375,356) (2,415,860) Payment of capital from Ameriprise Financial - 20,000 - Dividend / Return of capital to Ameriprise Financial (25,000) (20,000) (50,000) ----------- ----------- ----------- Net cash (used in) provided by financing activities (209,642) 1,050,212 246,832 ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents 83,888 10,113 (215,224) Cash and cash equivalents at beginning of year 35,212 25,099 240,323 ----------- ----------- ----------- Cash and cash equivalents at end of year $ 119,100 $ 35,212 $ 25,099 =========== =========== =========== Supplemental disclosures including non-cash transactions: Cash paid for income taxes $ 22,388 $ 6,531 $ 71,647 Certificate maturities and surrenders through loan reductions $ 1,966 $ 2,786 $ 2,386 See Notes to Financial Statements
F-6 AMERIPRISE CERTIFICATE COMPANY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (in thousands)
2005 2004 2003 -------- -------- -------- NET INCOME $ 29,680 $ 49,633 $ 52,955 OTHER COMPREHENSIVE LOSS NET OF TAX Unrealized (losses) gains on Available-for-Sale securities: Unrealized holding losses arising during the period, net of taxes of $44,726, $16,745, and $18,434, respectively (83,062) (31,099) (34,235) Reclassification adjustment for losses (gains) included in net income, net of taxes of $6,091, $1,538, and $2,891, respectively 11,312 (2,857) (5,369) -------- -------- -------- Unrealized losses on Available-for-Sale securities, net (71,750) (33,956) (39,604) -------- -------- -------- Unrealized (losses) gains on interest rate swaps: Unrealized holding (losses) gains arising during the period, net of taxes of $180, $372, and $1,603, respectively (335) 690 (2,976) Reclassification adjustment for losses included in net income, net of taxes of $43, $1,878, and $1,855, respectively 81 3,489 3,445 -------- -------- -------- Unrealized (losses) gains on interest rate swaps, net (254) 4,179 469 -------- -------- -------- OTHER COMPREHENSIVE LOSS, NET (72,004) (29,777) (39,135) -------- -------- -------- TOTAL COMPREHENSIVE (LOSS) INCOME $(42,324) $ 19,856 $ 13,820 ======== ======== ======== See Notes to Financial Statements
F-7 AMERIPRISE CERTIFICATE COMPANY STATEMENTS OF SHAREHOLDER'S EQUITY YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (in thousands)
2005 2004 2003 -------- -------- --------- COMMON SHARES $ 1,500 $ 1,500 $ 1,500 ======== ======== ========= ADDITIONAL PAID-IN CAPITAL Balance at beginning of year $323,844 $323,844 $ 373,844 Receipt of capital from Parent - 20,000 - Return of capital to Parent - (20,000) (50,000) -------- -------- --------- Balance at end of year $323,844 $323,844 $ 323,844 ======== ======== ========= RETAINED EARNINGS APPROPRIATED FOR PRE-DECLARED ADDITIONAL CREDITS AND INTEREST Balance at beginning of year $ 549 $ 184 $ 811 Transferred from (to) unappropriated retained earnings 2,647 365 (627) -------- -------- --------- Balance at end of year $ 3,196 $ 549 $ 184 ======== ======== ========= APPROPRIATED FOR ADDITIONAL INTEREST ON ADVANCE PAYMENTS $ 15 $ 15 $ 15 ======== ======== ========= UNAPPROPRIATED Balance at beginning of year $ 2,712 $(46,556) $(100,142) Net income 29,680 49,633 52,955 Transferred (to) from appropriated retained earnings (2,647) (365) 627 Dividend to Parent (25,000) - - Other - - 4 -------- -------- --------- Balance at end of year $ 4,745 $ 2,712 $ (46,556) ======== ======== ========= ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME - NET OF TAX Balance at beginning of year $ 14,449 $ 44,226 $ 83,361 Net other comprehensive loss (72,004) (29,777) (39,135) -------- -------- --------- Balance at end of year $(57,555) $ 14,449 $ 44,226 ======== ======== ========= TOTAL SHAREHOLDER'S EQUITY $275,745 $343,069 $ 323,213 ======== ======== ========= See Notes to Financial Statements
F-8 1. BASIS OF PRESENTATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Ameriprise Certificate Company (ACC or the Company), is a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Prior to August 1, 2005, Ameriprise Financial was known as American Express Financial Corporation. Ameriprise Financial changed its name on August 1, 2005 as a consequence of the plans announced by American Express Company (American Express) on February 1, 2005, to pursue a spin off of the businesses now being operated as part of Ameriprise Financial. The Separation from American Express (the Separation) was completed on September 30, 2005. After the Separation from American Express, Ameriprise Financial and its subsidiaries are no longer affiliated with American Express. Ameriprise Financial and American Express are independent companies, with separate public ownership, boards of directors and management. In connection with the Separation, Ameriprise Financial has incurred and will be incurring separation and distribution-related expenses in order to become a separate company. Based on the terms of the distribution and investment advisory and services agreements set in place between ACC and its affiliates, no separation costs will be allocated to ACC. If separation costs were allocated to ACC the amounts may or may not be significant to the Company. During the third quarter 2005, ACC agreed with American Express Bank Limited (AEB), a subsidiary of American Express, to execute an orderly wind-down of the certificate business marketed through AEB and American Express Bank International (AEBI). This agreement was effected through amendments to the existing contracts with AEB and AEBI. Under these amendments, as of October 1, 2005 AEB and AEBI no longer market or offer ACC certificate products; however compensation, at reduced rates, will continue to be paid to AEB and AEBI under the agreements until the earlier of the date upon which the business sold or marketed previously by AEB and AEBI no longer remains in effect or termination of the agreements. The amount of certificate reserves associated with this business was approximately $0.7 billion and $1.6 billion as of December 31, 2005 and 2004, respectively. ACC is registered as an investment company under the Investment Company Act of 1940 (the 1940 Act) and is in the business of issuing face-amount investment certificates. Face-amount certificates issued by ACC entitle the certificate owner to receive at maturity a stated amount of money and interest or credits declared from time to time by ACC, at its discretion. The certificates issued by ACC are not insured by any government agency. ACC's certificates are sold primarily by Ameriprise Financial Services, Inc. (AMPF) an affiliate of ACC. AMPF is registered as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico. As of December 31, 2005, ACC offered five different certificate products to the public. ACC is impacted by significant changes in interest rates as interest crediting rates on certificate products generally reset at shorter intervals than the change in the yield on ACC's investment portfolio. The specified maturities of most of ACC's certificate products range from ten to twenty years. Within that maturity period, most certificates have interest crediting rate terms ranging from three to thirty-six months. Interest crediting rates are subject to change and certificate product owners can surrender their certificates without penalty at term end. In addition, two types of certificate products have interest tied, in whole or in part, to a broad-based stock market index. All of the certificates are available as qualified investments for Individual Retirement Accounts, 401(k) plans and other qualified retirement plans. BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying financial statements are presented in accordance with U.S. generally accepted accounting principles. ACC uses the equity method of accounting for its wholly-owned unconsolidated subsidiary, Investors Syndicate Development Corporation, as prescribed by the Securities and Exchange Commission (SEC) for non-investment company subsidiaries. Certain reclassifications of prior period amounts have been made to conform to the current presentation. F-9 Accounting estimates are an integral part of the financial statements. In part, they are based upon assumptions concerning future events. Among the more significant is investment securities valuation as discussed in Note 3. These accounting estimates reflect the best judgment of management and actual results could differ. FAIR VALUES OF FINANCIAL INSTRUMENTS The fair values of financial instruments disclosed in the notes to financial statements are estimates based upon current market conditions and perceived risks, and require varying degrees of management judgment. INTEREST INCOME Interest income is accrued as earned using the effective interest method, which makes an adjustment for security premiums and discounts, so that the related security recognizes a constant rate of return on the outstanding balance throughout its term. PREFERRED STOCK DIVIDEND INCOME ACC recognizes dividend income from cumulative redeemable preferred stocks with fixed maturity amounts on an accrual basis similar to that used for recognizing interest income on debt securities. Dividend income from perpetual preferred stock is recognized on an ex-dividend date basis. CASH AND CASH EQUIVALENTS ACC has defined cash and cash equivalents as cash in banks and highly liquid investments with original maturities of ninety days or less. AVAILABLE-FOR-SALE SECURITIES Debt securities and marketable equity securities are classified as Available-for-Sale and carried at fair value which is generally based on quoted market prices. Unrealized gains (losses) on securities classified as Available-for-Sale are reflected, net of taxes, in accumulated other comprehensive income (loss) as part of Shareholder's Equity. The basis for determining cost in computing realized gains (losses) on securities is specific identification. Gains (losses) are recognized in the results of operations upon disposition of the securities. In addition, losses are also recognized when management determines that a decline in value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default or bankruptcy. ACC also considers the extent to which cost exceeds fair value, the duration of time of that decline and management's judgment as to the issuer's current and prospective financial condition, as well as, ACC's ability and intent to hold until recovery. The charges are reflected in net realized gain (loss) on investments in the statements of income. FIRST MORTGAGE LOANS ON REAL ESTATE AND OTHER LOANS First mortgage loans on real estate reflect principal amounts outstanding less allowance for losses, which is the basis for determining realized gains (losses). Estimated fair values of mortgage loans on real estate are determined by a discounted cash flow analysis using mortgage interest rates currently offered for mortgages of similar maturities. Other loans reflect amortized cost less allowance for losses. Carrying values of other loans represent estimated fair values when quoted prices are not available. The allowance for loan losses is measured as the excess of the loan's recorded investment over its present value of expected principal and interest payments discounted at the loan's effective interest rate or the fair value of collateral. Additionally, the level of the allowance for loan losses is determined based on several factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the allowance for loan losses, and believes it is adequate to absorb estimated losses in the portfolio. F-10 ACC generally stops accruing interest on mortgage loans on real estate for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. CERTIFICATE RESERVES Investment certificates may be purchased either with a lump-sum payment or by installment payments. Certificate product owners are entitled to receive, at maturity, a definite sum of money. Payments from certificate owners are credited to investment certificate reserves. Investment certificate reserves accumulate interest at specified percentage rates as declared by ACC. Reserves also are maintained for advance payments made by certificate owners, accrued interest thereon, and for additional credits in excess of minimum guaranteed rates and accrued interest thereon. On certificates allowing for the deduction of a surrender charge, the cash surrender values may be less than accumulated investment certificate reserves prior to maturity dates. Cash surrender values on certificates allowing for no surrender charge are equal to certificate reserves. The payment distribution, reserve accumulation rates, cash surrender values, reserve values and other matters are governed by the 1940 Act. Certain certificates offer a return based on the relative change in a stock market index. The certificates with an equity-based return contain embedded derivatives, which are carried at fair value within investment certificate reserves on the balance sheets. The fair values of these embedded derivatives incorporate current market data inputs. Changes in fair value are reflected in provision for certificate reserves within the statements of income. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Derivative instruments, consisting of interest rate swaps and options and futures contracts, are classified in the Balance Sheets at fair value. The fair value of ACC's derivative financial instruments are determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market data inputs. The accounting for the change in the fair value of the derivative financial instrument depends on its intended use and the resulting hedge designation, if any. ACC has historically designated interest rate swaps as cash flow hedges and does not designate options and futures contracts as accounting hedges. For derivative financial instruments that qualify as cash flow hedges, the effective portions of the gain or loss on the derivative instruments are reported in accumulated other comprehensive income (loss) and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented in the statements of income with the hedged instrument or transaction impact. If a hedge is de-designated or terminated prior to maturity, the amount previously recorded in accumulated other comprehensive income (loss) is recognized into earnings over the period that the hedged item impacts earnings. For any hedge relationships that are discontinued because the forecasted transaction is not expected to occur according to the original strategy, any related amounts previously recorded in accumulated other comprehensive income (loss) are recognized in earnings immediately. Derivative financial instruments that are entered into for hedging purposes are designated as such at the time that ACC enters into the contract. For all derivative financial instruments that are designated for hedging activities, ACC formally documents all of the hedging relationships between the hedge instruments and the hedged items at the inception of the relationships. Management also formally documents its risk management objectives and strategies for entering into the hedge transactions. ACC formally assesses, at inception and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of hedged items. If it is determined that a derivative is not highly effective as a hedge, ACC will discontinue the application of hedge accounting. See Note 9 for further discussion of derivatives and hedging activities of ACC. For derivative financial instruments that do not qualify for hedge accounting or are not designated as hedges, changes in fair value are recognized in current period earnings. F-11 DEFERRED DISTRIBUTION FEES AND OTHER Prior to September 30, 2004, distribution fees on sales of certain certificate products were deferred and amortized over the estimated lives of the related certificates, which were generally one year but could have been up to 10 years. Upon surrender prior to maturity, unamortized deferred distribution fees were reflected in expenses and any related surrender charges were reflected as a reduction to the provision expense for certificate reserves. During the third quarter of 2004, and based on management's review of ACC's certificate product portfolio mix and certificate portfolio maturities, ACC determined it to be appropriate to not defer distribution fees in the future and to completely write-down previously deferred balances to zero. As a result of these actions, investment expenses increased $5.7 million on a pre-tax basis during the third quarter of 2004. FEDERAL INCOME TAXES ACC's taxable income is included in the consolidated federal income tax return of Ameriprise Financial, Inc. ACC provides for income taxes on a separate return basis, except that, under an agreement between Ameriprise Financial and ACC, tax benefits are recognized for losses to the extent they can be used in the consolidated return. It is the policy of Ameriprise Financial that it will reimburse its subsidiaries for any tax benefits recorded. ACC's provision for income taxes represents the net amount of income taxes that the Company expects to pay or to receive from various taxing jurisdictions in connection with its operations. The Company provides for income taxes based on amounts that the Company believes it will ultimately owe. Inherent in the provision for income taxes are estimates and judgments regarding the tax treatment of certain items and the realization of certain offsets and credits. In connection with the provision for income taxes, ACC's financial statements reflect certain amounts related to deferred tax assets and liabilities, which result from temporary differences between the assets and liabilities measured for financial statement purposes versus the assets and liabilities measured for tax return purposes. RECENTLY ISSUED ACCOUNTING STANDARDS On November 3, 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." FSP FAS 115-1 and FAS 124-1 addresses the determination as to when an investment is considered impaired, whether that impairment is other-than-temporary and the measurement of loss. It also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP FAS 115-1 and FAS 124-1 are effective for reporting periods beginning after December 15, 2005. ACC is currently evaluating the impact of FSP FAS 115-1 and FAS 124-1 on its results of operations and financial position. 2. DEPOSIT OF ASSETS AND MAINTENANCE OF QUALIFIED ASSETS Under the provisions of its certificates and the 1940 Act, ACC was required to have Qualified Assets (as defined in Section 28(b) of the 1940 Act) in the amount of $5.6 billion and $5.8 billion at December 31, 2005 and 2004, respectively. ACC reported Qualified Assets of $6.0 billion and $6.2 billion at December 31, 2005 and 2004, respectively. Qualified Assets exclude net unrealized pretax losses on Available-for-Sale securities of $89 million and pretax gains on Available-for-Sale securities of $22 million at December 31, 2005 and 2004, respectively, and unsettled investment purchases of $7 million and $26 million at December 31, 2005 and 2004, respectively. Qualified Assets are valued in accordance with such provisions of Minnesota Statutes as are applicable to investments of life insurance companies. These values are the same as financial statement carrying values, except for debt securities classified as Available-for-Sale and all marketable equity securities, which are carried at fair value in the financial statements but are valued at either amortized cost, market value or par value based on the state requirements for qualified asset and deposit maintenance purposes. F-12 Pursuant to provisions of the certificates, the 1940 Act, the central depository agreement and requirements of various states, qualified assets (accounted for on a trade date basis) of ACC were deposited as follows:
December 31, 2005 --------------------------------------------------- Required Deposits Deposits Excess - ------------------------------------------------------------------------------------------------------------------- (in thousands) Deposits to meet certificate liability requirements: Pennsylvania (at market value) $ 150 $ 150 $ - Texas, Illinois, New Jersey (at par value) $ 222 $ 215 $ 7 Central Depository (at amortized cost) $5,968,097 $5,615,849 $ 352,248 - ------------------------------------------------------------------------------------------------------------------- December 31, 2004 --------------------------------------------------- Required Deposits Deposits Excess - ------------------------------------------------------------------------------------------------------------------- (in thousands) Deposits to meet certificate liability requirements: Pennsylvania (at market value) $ 155 $ 155 $ - Texas, Illinois, New Jersey (at par value) $ 215 $ 215 $ - Central Depository (at amortized cost) $6,133,903 $5,791,601 $ 342,402 - -------------------------------------------------------------------------------------------------------------------
The assets on deposit with the central depository at December 31, 2005 and 2004 consisted of securities and other loans having a deposit value of $5.6 billion and $5.7 billion, respectively, mortgage loans on real estate of $303 million and $322 million, respectively, and other investments of $69 million and $81 million, respectively. Additionally, these assets on deposit include unsettled purchases of investments in the amount of $7 million and $26 million at December 31, 2005 and 2004, respectively. Ameriprise Trust Company, the custodian for ACC, is the Central Depository. See Note 7. 3. INVESTMENTS IN UNAFFILIATED ISSUERS Fair values of investments in securities represent market prices or estimated fair values when quoted prices are not available. Estimated fair values are determined by using established procedures involving, among other things, review of market indexes, price levels of current offerings and comparable issues, price estimates, estimated future cash flows, and market data from independent brokers. Available-for-Sale securities at December 31, 2005 are distributed by type as presented below:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value - ------------------------------------------------------------------------------------------------------------------ (in thousands) Mortgage and other asset-backed securities $3,266,592 $4,313 $(52,414) $3,218,491 Corporate debt securities 2,035,108 3,794 (43,152) 1,995,750 Stated maturity preferred stock 11,186 73 (82) 11,177 Perpetual preferred stock 7,782 17 (234) 7,565 U.S. Government and agency obligations 22,661 - (465) 22,196 State and municipal obligations 9,032 - (397) 8,635 - ------------------------------------------------------------------------------------------------------------------ Total $5,352,361 $8,197 $(96,744) $5,263,814 - ------------------------------------------------------------------------------------------------------------------
F-13 Available-for-Sale securities at December 31, 2004 are distributed by type as presented below:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value - ------------------------------------------------------------------------------------------------------------------ (in thousands) Mortgage and other asset-backed securities $3,226,417 $23,251 $(17,372) $3,232,296 Corporate debt securities 2,279,295 29,927 (14,043) 2,295,179 Stated maturity preferred stock 24,043 348 (9) 24,382 Perpetual preferred stock 17,782 168 (81) 17,869 U.S. Government and agency obligations 25,365 62 (120) 25,307 State and municipal obligations 9,048 2 (294) 8,756 - ------------------------------------------------------------------------------------------------------------------ Total $5,581,950 $53,758 $(31,919) $5,603,789 - ------------------------------------------------------------------------------------------------------------------
Investments in securities with fixed maturities, on an amortized cost basis, comprised 90 percent and 92 percent of ACC's total investments at December 31, 2005 and 2004, respectively. Securities are rated by either Moody's, Standard & Poor's (S&P), or by Ameriprise's internal analysts, using criteria similar to Moody's and S&P, when a public rating does not exist. Ratings are presented using S&P's convention and if the two agency's ratings differ, the lower rating is used. A summary of investments in securities with fixed maturities, at amortized cost, by rating of investment is as follows: Rating 2005 2004 - --------------------------------------------------------------------- AAA 59% 57% AA 8 6 A 14 15 BBB 16 18 Below investment grade 3 4 - --------------------------------------------------------------------- Total 100% 100% - --------------------------------------------------------------------- Of the securities rated AAA, 43 percent and 63 percent at December 31, 2005 and 2004, respectively, are U.S. Government Agency mortgage-backed securities that are rated by a public rating agency. At both December 31, 2005 and 2004, approximately 3 percent, of securities with fixed maturities, other than GNMA, FNMA and FHLMC, are rated by Ameriprise's internal analysts. The following table provides information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2005:
Less than 12 months 12 months or more Total -------------------------------------------------------------------------------------------------- Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses - ---------------------------------------------------------------------------------------------------------------------------------- (in thousands) Mortgage and other asset- backed securities $1,884,284 $ (26,741) $ 816,052 $(25,673) $2,700,336 $ (52,414) Corporate debt securities 1,002,070 (20,372) 601,793 (22,780) 1,603,863 (43,152) Stated maturity preferred stock 3,079 (53) 1,105 (29) 4,184 (82) Perpetual preferred stock - - 5,059 (234) 5,059 (234) U.S. Government and agency obligations 21,996 (465) - - 21,996 (465) State and municipal obligations - - 8,605 (397) 8,605 (397) - ---------------------------------------------------------------------------------------------------------------------------------- Total $2,911,429 $ (47,631) $1,432,614 $(49,113) $4,344,043 $ (96,744) - ----------------------------------------------------------------------------------------------------------------------------------
F-14 The following table provides information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2004:
Less than 12 months 12 months or more Total -------------------------------------------------------------------------------------------------- Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses - ---------------------------------------------------------------------------------------------------------------------------------- (in thousands) Mortgage and other asset- backed securities $1,444,363 $(12,085) $180,808 $(5,287) $1,625,171 $(17,372) Corporate debt securities 875,416 (10,104) 135,885 (3,939) 1,011,301 (14,043) Stated maturity preferred stock 1,285 (9) - - 1,285 (9) Perpetual preferred stock 5,213 (81) - - 5,213 (81) U.S. Government and agency obligations 10,053 (120) - - 10,053 (120) State and municipal obligations 3,850 (150) 4,859 (144) 8,709 (294) - ---------------------------------------------------------------------------------------------------------------------------------- Total $2,340,180 $(22,549) $321,552 $(9,370) $2,661,732 $(31,919) - ----------------------------------------------------------------------------------------------------------------------------------
In evaluating potential other-than-temporary impairments, ACC considers the extent to which cost exceeds fair value and the duration and size of that difference. A key metric in performing this evaluation is the ratio of fair value to cost. The following table summarizes the unrealized losses by ratio of fair value to cost as of December 31, 2005:
Less than 12 months 12 months or more Total - ---------------------------------------------------------------------------------------------------------------------------------- Number Gross Number Gross Number Gross Ratio of Fair Value of Unrealized of Unrealized of Unrealized to Amortized Cost Securities Fair Value Losses Securities Fair Value Losses Securities Fair Value Losses - ---------------------------------------------------------------------------------------------------------------------------------- (in thousands, except number of securities) 95% - 100% 351 $2,854,715 $(43,875) 165 $1,304,761 $(40,141) 516 $4,159,476 $(84,016) 90% - 95% 23 55,861 (3,650) 10 115,141 (6,928) 33 171,002 (10,578) 80% - 90% 2 853 (106) 2 12,712 (2,044) 4 13,565 (2,150) - ---------------------------------------------------------------------------------------------------------------------------------- Total 376 $2,911,429 $(47,631) 177 $1,432,614 $(49,113) 553 $4,344,043 $(96,744) - ----------------------------------------------------------------------------------------------------------------------------------
A majority of the gross unrealized losses related to corporate debt and substantially all of the gross unrealized losses related to mortgage and other asset-backed securities are attributable to changes in interest rates. A portion of the gross unrealized losses related to corporate debt securities are also attributed to credit spreads and specific issuer credit events. As noted in the table above, a significant portion of the unrealized loss relates to securities that have a fair value to amortized cost ratio of 95% or above resulting in an overall 98% ratio of fair value to amortized cost for all securities with an unrealized loss. The $2 million in unrealized losses for securities with an unrealized loss for twelve months or more and a fair value to amortized cost ratio in the 80-90% category relates to two corporate debt securities for which ACC expects that all contractual principal and interest will be received. The unrealized losses in the other categories are not concentrated in any individual industry or with any individual security. ACC monitors the investments and metrics discussed above on a quarterly basis to identify and evaluate investments that have indications of possible other-than-temporary impairment. See the Available-for-Sale Securities section of Note 1 for information regarding ACC's policy for determining when an investment's decline in value is other than temporary. F-15 As stated earlier, the majority of the gross unrealized losses on its Available-for-Sale securities are attributable to changes in interest rates. Additionally, ACC has the ability and intent to hold these securities for a time sufficient to recover its amortized cost and has, therefore, concluded that none are other-than-temporarily impaired at December 31, 2005. The following is a distribution of Available-for-Sale securities by maturity as of December 31, 2005. Cash flows may differ from contractual maturities because issuers may call or prepay obligations. Amortized Fair Cost Value - ------------------------------------------------------------------------------ (in thousands) Due within 1 year $ 226,766 $ 227,005 Due from 1 to 5 years 1,543,251 1,510,767 Due from 5 to 10 years 305,764 297,804 Due in more than 10 years 2,206 2,183 - ------------------------------------------------------------------------------ 2,077,987 2,037,759 Mortgage and asset-backed securities 3,266,592 3,218,490 Perpetual preferred stock 7,782 7,565 - ------------------------------------------------------------------------------ Total $5,352,361 $5,263,814 - ------------------------------------------------------------------------------ Mortgage and other asset-backed securities primarily reflect GNMA, FNMA, and FHLMC securities at December 31, 2005 and 2004. The expected payouts on mortgage and other asset-backed securities may not coincide with their contractual maturities. As such, these securities, as well as perpetual preferred stock, were not included in the maturities distribution. At December 31, 2005 and 2004 no one issuer, other than GNMA, FNMA and FHLMC, is greater than 1 percent of the fair market value of ACC's total investment portfolio. Included in net realized gains and losses are gross realized gains and losses on sales of securities, as well as other-than-temporary impairment losses on investments, classified as Available-for-Sale, using the specific identification method, as noted in the following table for the years ended December 31: 2005 2004 2003 - ------------------------------------------------------------------------------ (in millions) Gross realized gains from sales $ 2.0 $ 6.1 $ 47.1 Gross realized losses from sales $(19.4) $(1.1) $ (2.8) Other-than-temporary impairments $ - $(0.6) $(36.0) - ------------------------------------------------------------------------------ The $36.0 million of other-than-temporary impairments in 2003 was primarily related to corporate debt securities impacted by continued operating difficulties and bankruptcies of certain large airline carriers and the overall impact on the airline industry. ACC reserves freedom of action with respect to its acquisition of restricted securities that offer advantageous and desirable investment opportunities. In a private negotiation, ACC may purchase for its portfolio all or part of an issue of restricted securities. Since ACC would intend to purchase such securities for investment and not for distribution, it would not be "acting as a distributor" if such securities are resold by ACC at a later date. ACC's board of directors, using the aforementioned procedures and factors, approve fair value procedures, which are implemented by investment accounting. F-16 In the event ACC were to be deemed to be a distributor of the restricted securities, it is possible that ACC would be required to bear the costs of registering those securities under the Securities Act of 1933, although in most cases such costs would be incurred by the issuer of the restricted securities. 4. INVESTMENTS IN FIRST MORTGAGE LOANS ON REAL ESTATE AND OTHER LOANS The carrying amounts and fair values of first mortgage loans on real estate and other loans at December 31 are below:
2005 2004 ------------------------------------------------------------------ Carrying Fair Carrying Fair Amount Value Amount Value - ------------------------------------------------------------------------------------------------------------------ (in thousands) First mortgage loans on real estate $306,318 $311,007 $329,452 $342,116 Other loans 130,969 131,576 139,295 140,428 Reserve for losses (6,536) - (7,536) - - ------------------------------------------------------------------------------------------------------------------ Net first mortgage and other loans $430,751 $442,583 $461,211 $482,544 - ------------------------------------------------------------------------------------------------------------------
At December 31, 2005 and 2004, ACC held investments in impaired mortgage or other loans with carrying values totaling nil and $4.6 million, respectively. ACC recognized $0.1 million and $0.5 million of interest income related to such investments for the years ended December 31, 2005 and 2004, respectively. At both December 31, 2005 and 2004, approximately 5 percent, of ACC's invested assets were first mortgage loans on real estate. Concentrations of credit risk of first mortgage loans on real estate by region at December 31 were: 2005 2004 - -------------------------------------------------------------------------- Mortgages by U.S. region: North Central 25% 25% Atlantic 22 24 Pacific 19 16 South Central 14 17 Mountain 12 10 New England 8 8 - -------------------------------------------------------------------------- Total 100% 100% - -------------------------------------------------------------------------- Concentrations of credit risk of first mortgage loans on real estate by property type at December 31 were: 2005 2004 - -------------------------------------------------------------------------- Mortgage loans by U.S. property type: Office buildings 46% 44% Shopping centers and Retail 17 21 Apartments 16 11 Industrial buildings 12 14 Other 9 10 - -------------------------------------------------------------------------- Total 100% 100% - -------------------------------------------------------------------------- F-17 At December 31, 2005 and 2004, commitments for funding of first mortgage loans on real estate, at market interest rates, aggregated $9.3 million and $2.5 million, respectively. ACC holds the mortgage document, which gives ACC the right to take possession of the property if the borrower fails to perform according to the terms of the agreements. ACC employs policies and procedures to ensure the creditworthiness of the borrowers and that funds will be available on the funding date. ACC's first mortgage loans on real estate are restricted to 80 percent or less of the market value of the real estate at the time of the loan funding. Fair values for these commitments were not substantially different from the commitment amounts at December 31, 2005 and 2004. 5. CERTIFICATE RESERVES Reserves maintained on outstanding certificates have been computed in accordance with the provisions of the certificates and Section 28 of the 1940 Act. The average rates of accumulation on certificate reserves at December 31, 2005 were as follows:
Average Gross Average Reserve Accumulation Additional Balance Rates Credit Rates - ----------------------------------------------------------------------------------------------------------------- (in thousands, except percentages) Installment certificates: Reserves to mature: With guaranteed rates $ 7,496 4.00% 0.50% Without guaranteed rates (a) 80,388 - 2.25% Additional credits and accrued interest 2,632 3.30% - Advance payments and accrued interest (b) 369 3.41% - Other 1 - 0.23% Fully paid certificates: Reserves to mature: With guaranteed rates 74,115 3.20% 0.07% Without guaranteed rates (a) and (c) 5,448,914 - 2.88% Additional credits and accrued interest 34,689 0.41% - Due to unlocated certificate holders 31 - - - ---------------------------------------------------------------------------- Total $5,648,635 - ----------------------------------------------------------------------------
The average rates of accumulation on certificate reserves at December 31, 2004 were as follows:
Average Gross Average Reserve Accumulation Additional Balance Rates Credit Rates - -------------------------------------------------------------------------------------------------------------- (in thousands, except percentages) Installment certificates: Reserves to mature: With guaranteed rates $ 9,394 4.00% 1.00% Without guaranteed rates (a) 107,243 - 1.76% Additional credits and accrued interest 3,092 3.25% - Advance payments and accrued interest (b) 474 3.37% - Other 2 - 0.01% Fully paid certificates: Reserves to mature: With guaranteed rates 82,424 3.21% 0.02% Without guaranteed rates (a) and (c) 5,584,515 - 1.30% Additional credits and accrued interest 48,053 0.32% - Due to unlocated certificate holders 46 - - - ---------------------------------------------------------------------------- Total $5,835,243 - ---------------------------------------------------------------------------- (a) There is no minimum rate of accrual on these reserves. Interest is declared periodically, quarterly, or annually in accordance with the terms of the separate series of certificates. (b) Certain series of installment certificates guarantee accrual of interest on advance payments at an average of 3.26 percent. ACC's rate of accrual is currently set at 4 percent, which is in effect through April 2007. (c) Ameriprise Stock Market Certificate and Ameriprise Market Strategy Certificate enable the certificate owner to participate in any relative rise in a major stock market index without risking loss of principal. Generally the certificates have a term of 52 weeks and may continue for up to 20 successive terms. The reserve balances on these certificates at December 31, 2005 and 2004 were $1.2 billion and $1.5 billion, respectively.
F-18 Certificate maturities and surrenders during the years ended December 31, 2005 and 2004 were $3.6 billion and $2.4 billion, respectively. On certain series of single payment certificates, additional interest is pre-declared for periods greater than one year. The retained earnings appropriated for the pre-declared additional interest at December 31, 2005 and 2004 was $3.2 million and $0.5 million, respectively, which reflects the difference between certificate reserves on these series, calculated on a statutory basis, and the reserves maintained per books. Fair values of certificate reserves with interest rate terms of one year or less (including embedded derivatives) approximated the carrying values less any applicable surrender charges. Fair values for other certificate reserves are determined by discounted cash flow analyses using interest rates currently offered for certificates with similar remaining terms, less any applicable surrender charges. The carrying amounts and fair values of certificate reserves at December 31, 2005 and 2004, respectively consisted of the following:
2005 2004 --------------------------- ------------------------------ Carrying Fair Carrying Fair Amount Value Amount Value - ------------------------------------------------------------------------------------------------------------------------ (in thousands) Reserves with terms of one year or less $5,073,606 $5,070,933 $5,393,448 $5,390,878 Other 575,029 569,420 441,795 439,636 - ------------------------------------------------------------------------------------------------------------------------ Total certificate reserves 5,648,635 5,640,353 5,835,243 5,830,514 - ------------------------------------------------------------------------------------------------------------------------ Unapplied certificate transactions 975 975 4,933 4,933 Certificate loans and accrued interest (11,456) (11,456) (13,176) (13,176) - ------------------------------------------------------------------------------------------------------------------------ Total $5,638,154 $5,629,872 $5,827,000 $5,822,271 - ------------------------------------------------------------------------------------------------------------------------
6. DIVIDEND RESTRICTION Certain series of installment certificates outstanding provide that cash dividends may be paid by ACC only in calendar years for which additional credits of at least one-half of one percent on such series of certificates have been authorized by ACC. This restriction has been satisfied for 2005 and 2004 by ACC's declaration of additional credits in meeting this requirement. ACC is required to maintain cash and "qualified assets" meeting the standards of Section 28(b) of the 1940 Act, as modified by an order of the SEC. The amortized cost of such investments must be at least equal to ACC's net liabilities on all outstanding face-amount certificates plus $250,000. ACC's qualified assets consist of cash and cash equivalents, first mortgage loans on real estate and other loans, U.S. government and government agency securities, municipal bonds, corporate bonds, preferred stocks and other securities meeting specified standards. F-19 So long as ACC wishes to rely on the SEC order, as a condition to the order, ACC has agreed to maintain an amount of unappropriated retained earnings and capital equal to at least 5 percent of certificate reserves (less outstanding certificate loans). To the extent that payment of a dividend would decrease the capital ratio below the required 5 percent, payment of a dividend would be restricted. In determining compliance with this condition, qualified assets are valued in accordance with the provisions of Minnesota Statutes where such provisions are applicable. ACC has also entered into a written understanding with the State of Minnesota, Department of Commerce, that ACC will maintain capital equal to 5 percent of the assets of ACC (less outstanding certificate loans). To the extent that payment of a dividend would decrease this ratio below the required 5 percent, payment of a dividend would be restricted. When computing its capital for these purposes, ACC values its assets on the basis of statutory accounting for insurance companies rather than GAAP. ACC is subject to annual examination and supervision by the State of Minnesota, Department of Commerce (Banking Division). 7. RELATED PARTY TRANSACTIONS INVESTMENT ADVISORY, JOINT FACILITIES AND TECHNOLOGY SUPPORT The investment advisory and services agreement with RiverSource Investments provides for a graduated scale of fees equal on an annual basis to 0.750 percent on the first $250 million of total book value of investments of ACC, 0.650 percent on the next $250 million, 0.550 percent on the next $250 million, 0.500 percent on the next $250 million and 0.107 percent on the amount in excess of $1 billion. The fee is payable monthly in an amount equal to one-twelfth of each of the percentages set forth above. Excluded from investments for purposes of this computation are first mortgage and other loans, real estate and any other asset on which ACC pays an outside advisory or service fee. The fee paid to RiverSource Investments for managing and servicing bank loans is equal to 0.35 percent of book value of the investment on an annual basis. DISTRIBUTION SERVICES Fees payable to AMPF on sales of ACC's certificates are based upon terms of agreements giving AMPF the right to distribute the certificates covered under the agreements. The agreements provide for payment of fees over a period of time. From time to time, ACC may sponsor or participate in sales promotions involving one or more of the certificates and their respective terms. These promotions may offer a special interest rate to attract new clients or retain existing clients. To cover the cost of these promotions, distribution fees paid to AMPF may be lowered. From September 29, 2004 through March 1, 2005, ACC sponsored a sales promotion on the Flexible Savings Certificate. During that time, the distribution fee on 7 and 11 month Flexible Savings Certificates was 0.08 percent of the initial payment and 0.08 percent of the reserves maintained for these certificates at the beginning of the second and subsequent quarters after issuance. The aggregate fees payable under the agreements is $25 per $1,000 face amount of installment certificates sold on or after April 30, 1997. The aggregate fees payable for the first year is $2.50 and the remaining $22.50 aggregate fees is payable over nine subsequent years. The previously offered American Express Investors Certificates have contractual distribution fee rates at an annualized rate of 1 percent of the reserves maintained for the certificates. Fees are paid at the end of each term on certificates with a one, two or three-month term. Fees are paid each quarter from date of issuance on certificates with a six, twelve, twenty-four or thirty-six month term. On October 1, 2005, the distribution fee rate decreased 15 basis points as a consequence of the orderly wind-down of business marketed through AEB and AEBI. F-20 Effective April 26, 2000, the Ameriprise Flexible Savings Certificates have contractual distribution fee rates of 0.08 percent of the purchase price at the time of issuance and 0.08 percent of the reserves maintained for these certificates at the beginning of the second and subsequent quarters from issue date. Effective April 25, 2001, the Ameriprise Cash Reserve Certificates have contractual distribution fee rates of 0.0625 percent of the purchase price at the time of issuance and 0.0625 percent of the reserves maintained for these certificates at the beginning of the second and subsequent quarters from issue date. Effective April 28, 1999, the Ameriprise Stock Market Certificate, sold through AMPF, and Ameriprise Market Strategy Certificates have contractual distribution fee rates of 0.90 percent of the initial investment on the first day of the certificate's term and 0.90 percent of the reserves maintained for these certificates at the beginning of each subsequent term. Effective April 26, 2000, the previously offered American Express Stock Market Certificates, sold through American Express Bank International, have contractual distribution fee rates of 1 percent. Fees are paid on the purchase price on the first day of the certificate's term and on the reserves maintained for these certificates at the beginning of each subsequent term. The basis for computing fees paid or payable to AEB for the distribution of the previously offered American Express Special Deposits Certificates on an annualized basis is 1.25 percent of the reserves maintained for the certificates on an amount from $100,000 to $249,999, 0.80 percent on an amount from $250,000 to $499,999, 0.65 percent on an amount from $500,000 to $999,999 and 0.50 percent on an amount $1,000,000 or more. Fees are paid at the end of each term on certificates with a one, two, or three-month term. Fees are paid at the end of each quarter from date of issuance on certificates with six, twelve, twenty-four, or thirty-six month terms. On October 1, 2005, the distribution fee rate decreased 15 basis points as a consequence of the orderly wind-down of business marketed through AEB and AEBI. DEPOSITORY FEES The basis for computing fees paid or payable to Ameriprise Trust Company for depository services is as follows: Depository fees paid or payable to Ameriprise Trust Company is: Maintenance charge per account 5 cents per $1,000 of assets on deposit Transaction charge $20 per transaction Security loan activity: Depository Trust Company receive/deliver $20 per transaction Physical receive/deliver $25 per transaction Exchange collateral $15 per transaction A transaction consists of the receipt or withdrawal of securities and commercial paper and/or a change in the security position. The charges are payable quarterly except for maintenance, which is an annual fee. TRANSFER AGENT FEES The basis of computing transfer agent fees paid or payable to RiverSource Service Corporation is under a Transfer Agency Agreement effective December 2, 2004. RiverSource Service Corporation maintains certificate owner accounts and records. ACC pays RiverSource Service Corporation a monthly fee of one-twelfth of $10.353 per certificate owner account for this service. F-21 8. INCOME TAXES Provisions (benefits) for income taxes were:
2005 2004 2003 --------- --------- -------- (in thousands) Federal income tax: Current $ 3,760 $ 44,763 $ 44,777 Deferred 12,987 (18,934) (17,804) - ----------------------------------------------------------------------------------------------- Total federal income tax 16,747 25,829 26,973 State, local and other income taxes (534) 826 1,354 - ----------------------------------------------------------------------------------------------- Total $ 16,213 $ 26,655 $ 28,327 - -----------------------------------------------------------------------------------------------
The principal reasons that the aggregate income tax provision is different from that computed by using the U.S. statutory rate of 35% are as follows: 2005 2004 2003 - ----------------------------------------------------------------------------- Tax at U.S. statutory rate 35.0% 35.0% 35.0% Dividend exclusion (1.0)% (1.1)% (1.2)% Other, net 2.5% (0.1)% (0.6)% - ----------------------------------------------------------------------------- Income tax provision 36.5% 33.8% 33.2% - ----------------------------------------------------------------------------- Deferred income tax provision (benefit) results from differences between assets and liabilities measured for financial reporting and for income tax purposes. The significant components of deferred tax assets and liabilities at December 31, 2005 and 2004, respectively are reflected in the following table:
2005 2004 - ------------------------------------------------------------------------------------------ (in thousands) Deferred income tax assets: Certificate reserves $11,010 $18,676 Investments, including bond discounts and premiums 18,754 24,512 Investment unrealized losses, net 30,991 - Other 33 - - ------------------------------------------------------------------------------------------ Total deferred income tax assets 60,788 43,188 - ------------------------------------------------------------------------------------------ Deferred income tax liabilities: Investment unrealized gains, net - 7,780 Other 520 925 - ------------------------------------------------------------------------------------------ Total deferred income tax liabilities 520 8,705 - ------------------------------------------------------------------------------------------ Net deferred income tax assets $60,268 $34,483 - ------------------------------------------------------------------------------------------
ACC is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that ACC will realize the benefit of the deferred tax assets and, therefore, no such valuation allowance has been established. 9. DERIVATIVE FINANCIAL INSTRUMENTS ACC maintains an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate and equity market volatility. ACC may enter into interest rate swaps to manage interest rate sensitivity and currently enters into options and futures contracts to mitigate the negative effect on earnings that would result from an increase in the equity markets. ACC did not hold any interest rate swaps at December 31, 2005. ACC reclassified into earnings pretax losses of $0.1 million and $5.4 million as a result of interest rate swap agreements during 2005 and 2004, respectively. F-22 For the years ended December 31, 2005 and 2004, ACC recognized no losses on the derivatives as a result of ineffectiveness. ACC offers Ameriprise Stock Market Certificates (SMC) that offer a return based upon the relative change in a major stock market index between the beginning and end of the SMC's term. The SMC product contains an embedded derivative, essentially the equity based return of the certificate that must be separated from the host contract and accounted for as a derivative instrument. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivative, the amount of expenses incurred by ACC related to SMC will positively or negatively impact reported earnings. As a means of hedging its obligations under the provisions for these certificates, ACC purchases and writes call options on the major stock market index. ACC views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. ACC also purchases futures on the major stock market index to economically hedge its obligations. The futures are marked-to-market daily and exchange traded, exposing ACC to no counterparty risk. The options and futures contracts do not receive special hedge accounting under SFAS No. 133. As such, any changes in the fair value of the contracts are taken through earnings. The fair values of the purchased and written call options are included in equity indexed options and other liabilities, respectively, on the balance sheet. The fair value of the embedded derivatives is reflected in certificate reserves. Gains (losses) on options and futures are reflected in investment income, equity index options, on the statements of income. Changes in fair values of embedded derivative instruments are reflected in provision for certificate reserves. By using derivative instruments, ACC is exposed to credit and market risk. Credit risk is the possibility that the counterparty will not fulfill the terms of the contract. ACC monitors credit risk related to derivative financial instruments through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral where appropriate. Market risk is the possibility that the value of the derivative financial instrument will change due to fluctuations in a factor from which the instrument derives its value, primarily an interest rate or a major stock market index. ACC manages the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. ACC primarily uses derivatives to manage risk and, therefore, cash flow and income effects of such derivatives generally offset effects of the underlying certificate product reserves. 10. FAIR VALUES OF FINANCIAL INSTRUMENTS The following table discloses fair value information for financial instruments. ACC discloses fair value information for financial instruments for which it is practicable to estimate that value. The fair values of the financial instruments presented are estimates based upon market conditions and perceived risks at December 31, 2005 and 2004 and may require management judgment to estimate such values. These figures may not be indicative of future fair values. The fair value of the Company, therefore, cannot be estimated by aggregating the amounts presented herein. The estimated fair value of certain financial instruments such as cash and cash equivalents and certificate loans approximate the carrying amounts disclosed in the Balance Sheets. F-23 The following table discloses carrying value and fair value information for the financial instruments at December 31:
2005 2004 - ------------------------------------------------------------------------------------------------------------------------------- Carrying Fair Carrying Fair Value Value Value Value - ------------------------------------------------------------------------------------------------------------------------------- (in thousands) Financial assets: Assets for which carrying values approximate fair values $ 119,100 $ 119,100 $ 35,212 $ 35,212 Available-for-Sale securities $5,263,814 $5,263,814 $5,603,789 $5,603,789 Net first mortgage loans on real estate and other loans $ 430,751 $ 442,583 $ 461,211 $ 482,544 Derivative financial instruments $ 73,942 $ 73,942 $ 116,285 $ 116,285 Financial liabilities: Liabilities for which carrying values approximate fair values $ 23,343 $ 23,343 $ 10,793 $ 10,793 Net certificate reserves $5,638,154 $5,629,872 $5,827,000 $5,822,271 Derivative financial instruments $ 38,128 $ 38,128 $ 72,708 $ 72,708 - -------------------------------------------------------------------------------------------------------------------------------
The following methods were used to estimate the fair values of financial assets and financial liabilities: FINANCIAL ASSETS Assets for which carrying values approximate fair values are cash and cash equivalents. Available-for-Sale securities are carried at fair value in the Balance Sheets. Gains and losses are recognized in the results of operations upon disposition. In addition, impairment losses are recognized when management determines that a decline in value is other-than-temporary. The fair value of mortgage loans on real estate, except those with significant credit deterioration, are estimated using discounted cash flow analysis, based on current interest rates for loans with similar terms to borrowers of similar credit quality. For loans with significant credit deterioration, fair values are based on estimates of future cash flows discounted at rates commensurate with the risk inherent in the revised cash flow projections, or for collateral dependent loans, on collateral values. Derivative financial instruments are carried at fair value within other qualified assets or other liabilities. The fair value of the derivative financial instruments are determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market data inputs. FINANCIAL LIABILITIES Liabilities for which carrying values approximate fair values include certain other liabilities. The carrying value approximates fair value due to the short-term nature of these liabilities. For variable rate investment certificates that reprice within a year, fair values approximate carrying values. For other investment certificates, fair value is estimated using discounted cash flows based on current interest rates. The valuations are reduced by the amount of the applicable surrender charges. F-24 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005
BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- TOTAL - BONDS AND NOTES U.S. GOVERNMENT U.S. Government-Direct Obligations FNMA COLLATERAL - MUNI 2008 4.000% 15,000 14,995 14,703 FNMA COLLATERAL - MUNI 2012 4.450% 7,294 7,294 7,124 U.S. TREASURY 2006 5.625% 200 200 200 U.S. TREASURY 2014 4.750% 165 172 169 TOTAL - U.S. GOVERNMENT-DIRECT OBLIGATIONS 22,659 22,661 22,196 TOTAL - U.S. GOVERNMENT 22,659 22,661 22,196 MORTGAGE BACKED SECURITIES Mortgage Backed Securities ADJUSTABLE RATE MORTGAGE TRUST 2035 4.659% 5,556 5,556 5,567 AESOP FUNDING II LLC AESOP_03- 2009 3.720% 7,500 7,598 7,302 (d) AESOP_05-4 2010 4.400% 18,000 17,995 17,624 (d) AESOP_2003-2 2009 3.610% 4,700 4,640 4,573 (d) ALPS_05-1 2030 4.731% 4,877 4,877 4,882 (d) AMCAR_04-BM 2011 2.670% 4,200 4,152 4,080 ARG FUNDING CORP 2007 4.820% 389 389 389 (d) ARMT_2004-2 2035 5.261% 5,366 5,424 5,362 BAA_2003-1 2033 5.000% 5,081 5,104 5,040 BACM_03-1 2036 3.878% 8,936 8,884 8,600 BACM_2004-5 2041 4.176% 12,000 12,028 11,730 BALL_01-FM 2016 6.119% 3,129 3,129 3,226 (d) BANC OF AMERICA FUNDING CORP B 2035 5.449% 9,134 9,198 9,130 BANK OF AMERICA MORTGAGE SECUR 2033 4.164% 15,000 14,933 14,685 BANK ONE ISSUANCE TRUST BOIT 2010 4.739% 9,750 9,790 9,798 BANK ONE ISSUANCE TRUST BOIT 2011 4.689% 10,000 10,037 10,045 BANK ONE ISSUANCE TRUST BOIT 2011 3.860% 13,400 13,398 13,096 BEAR STEARNS ALT-A TRUST BALTA 2035 4.722% 12,039 12,015 11,817 BEAR STEARNS ALT-A TRUST BALTA 2035 5.274% 4,716 4,735 4,688 BOAMS_04-B 2034 3.971% 9,365 9,338 8,912 BOAMS_04-F_2A6 2034 4.156% 10,000 9,791 9,776 BOAMS_04G 2034 4.577% 8,587 8,474 8,703 BOAMS_2004-E 2034 4.114% 15,000 14,889 14,484 BOAMS_2004-E 2034 4.035% 5,916 5,704 5,745 BOAMS_2004-H 2034 4.468% 4,860 4,810 4,828 BSARM_2003-2 2033 3.990% 7,374 7,406 7,259 (d) BSCMS_03-TOP10 2040 4.000% 7,651 7,678 7,420 BSCMS_2004-PWR5 2042 4.254% 7,200 7,230 7,012 BVMBS_05-1 2035 4.475% 15,976 15,925 15,399 CARAT_2004-2 2007 3.120% 5,334 5,334 5,315 CARAT_2004-2 2009 3.920% 10,000 9,868 9,768 CDCSC_02-FX1 2019 5.252% 8,292 8,313 8,361 CDTIM_05-1A 2017 4.670% 8,008 8,007 7,926 (d) CENTEX HOME EQUITY CHECK_03-A 2031 3.750% 7,390 7,304 7,308 CENTEX HOME EQUITY CHEC_01-A 2029 6.470% 176 176 176 CIT EQUIPMENT COLLATERAL 2004- 2008 3.500% 5,000 5,000 4,925 CMAC_98-C1 2031 6.490% 7,404 7,822 7,605 CMLTI_05-3 2035 4.704% 9,412 9,364 9,258 CNH_05-A 2007 3.640% 19,675 19,675 19,592 COAFT_02-B 2009 3.320% 7,326 7,378 7,277 COMM_04-LNB3 2037 4.713% 7,500 7,523 7,441 COPAR_2004-3 2007 3.040% 4,537 4,537 4,526 COUNTRYWIDE HOME EQUITY LOAN C 2034 4.649% 4,081 4,079 4,087 COUNTRYWIDE HOME LOANS CWHL_05 2035 5.522% 2,264 2,263 2,263 COUNTRYWIDE HOME LOANS CWHL_05 2035 4.484% 8,220 8,220 8,220 CSFBMSC_04-C2 2036 3.819% 6,411 6,258 6,087 F-25 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- CWALT_05-24 2035 4.473% 13,991 14,138 14,030 CWALT_05-27 2035 4.657% 18,744 18,937 18,744 CWA_2004-33 2034 4.953% 6,203 6,256 6,263 CWA_2004-J7 2034 4.673% 9,861 9,839 9,712 CWHEL_04-K 2034 4.669% 3,948 3,953 3,955 CWHEL_04-R 2030 4.619% 5,728 5,728 5,733 CWHEL_04-U 2034 4.639% 5,961 5,961 5,969 CWHEL_05-A 2035 4.609% 6,467 6,467 6,470 CWHEL_05-B 2035 4.549% 6,838 6,838 6,835 CWHEL_2004-N 2034 4.649% 3,992 3,990 3,998 CWHEL_2004-S 2030 4.609% 5,478 5,478 5,481 CWHL_04-12 2034 4.602% 7,496 7,423 7,293 CWHL_05-HYB7 2035 5.832% 24,022 24,238 24,296 DART_05-2 2010 4.120% 15,000 14,999 14,862 (d) DLJCMC_99-CG3 2032 7.120% 2,541 2,542 2,565 DRAT_04-1 2008 3.500% 4,573 4,573 4,549 (d) DSLA_05-AR1 2045 4.620% 8,751 8,751 8,712 EQUITY ONE EQABS_2004-3 2034 4.265% 10,000 10,057 9,928 EQUITY ONE EQABS_2004-3 2034 5.100% 10,000 10,222 9,976 FANNIE MAE FNMA_03-28 2022 5.000% 8,580 8,697 8,504 FANNIE MAE FNMA_04-3 2034 3.750% 10,000 10,045 9,887 FANNIE MAE FNMA_05-40 2030 5.000% 12,612 12,690 12,472 FANNIE MAE FNMA_99-8 2014 6.000% 4,727 4,698 4,797 FHAMS_04-AA7 2035 4.742% 6,858 6,909 6,810 FHAMS_05-AA2 2035 5.137% 10,451 10,662 10,619 FHAMS_05-AA3 2035 5.394% 15,648 15,807 15,665 FHAT_2004-A4 2034 5.405% 5,916 5,980 5,978 FHLMC_2382 2030 5.500% 5,065 5,026 5,125 FHLMC_2473 2030 5.500% 1,243 1,240 1,242 FHLMC_2478 2021 5.250% 6,293 6,286 6,235 FHLMC_2619 2022 5.000% 19,333 19,719 19,078 FHLMC_2835 2032 4.500% 11,460 11,446 11,174 FHLMC_2872 2022 4.500% 10,000 10,015 9,705 FHLMC_2901 2033 4.500% 8,029 8,022 7,879 FHLMC_2907 2019 4.500% 8,427 8,423 8,270 FMGT_03-T5 2013 4.055% 6,847 6,847 6,715 FNMA COLLATERAL - MUNI 2019 6.075% 12,908 13,196 13,047 FNMA COLLATERAL - MUNI 2033 4.536% 10,449 10,300 10,129 FNMA COLLATERAL - MUNI 050973 2009 6.000% 2,444 2,414 2,482 FNMA COLLATERAL - MUNI 105989 2020 5.759% 288 301 295 FNMA COLLATERAL - MUNI 190726 2033 5.748% 878 897 881 FNMA COLLATERAL - MUNI 249907 2024 5.125% 1,125 1,136 1,177 FNMA COLLATERAL - MUNI 250670 2011 7.000% 332 333 344 FNMA COLLATERAL - MUNI 250671 2011 7.500% 954 954 996 FNMA COLLATERAL - MUNI 250857 2012 7.000% 868 866 901 FNMA COLLATERAL - MUNI 252259 2014 5.500% 65 64 66 FNMA COLLATERAL - MUNI 252344 2014 5.500% 4,559 4,460 4,604 FNMA COLLATERAL - MUNI 252381 2014 5.500% 4,520 4,416 4,555 FNMA COLLATERAL - MUNI 254010 2008 5.500% 1,161 1,159 1,163 FNMA COLLATERAL - MUNI 254195 2017 5.500% 7,162 7,143 7,215 FNMA COLLATERAL - MUNI 254508 2012 5.000% 13,041 13,288 13,033 FNMA COLLATERAL - MUNI 254584 2012 5.000% 19,985 20,279 19,973 FNMA COLLATERAL - MUNI 254586 2013 5.000% 31,245 31,916 31,225 FNMA COLLATERAL - MUNI 254590 2018 5.000% 25,071 25,263 24,843 FNMA COLLATERAL - MUNI 254591 2018 5.500% 13,467 13,919 13,560 FNMA COLLATERAL - MUNI 254663 2013 5.000% 4,457 4,519 4,454 FNMA COLLATERAL - MUNI 254720 2018 4.500% 71,173 71,506 69,478 FNMA COLLATERAL - MUNI 303259 2025 5.504% 927 953 936 FNMA COLLATERAL - MUNI 303445 2009 5.500% 1,600 1,565 1,614 FNMA COLLATERAL - MUNI 303970 2024 6.000% 3,379 3,334 3,410 FNMA COLLATERAL - MUNI 313042 2011 7.000% 695 696 718 F-26 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- FNMA COLLATERAL - MUNI 313522 2012 7.000% 1,711 1,716 1,775 FNMA COLLATERAL - MUNI 313561 2012 8.000% 972 985 1,028 FNMA COLLATERAL - MUNI 323290 2013 6.000% 160 159 163 FNMA COLLATERAL - MUNI 323748 2014 6.500% 2,688 2,635 2,765 FNMA COLLATERAL - MUNI 323833 2014 6.000% 1,378 1,366 1,409 FNMA COLLATERAL - MUNI 36225 2016 9.000% 11 11 12 FNMA COLLATERAL - MUNI 367005 2012 7.000% 696 692 723 FNMA COLLATERAL - MUNI 386642 2008 3.930% 11,589 11,834 11,277 FNMA COLLATERAL - MUNI 509806 2014 6.500% 1,122 1,111 1,154 FNMA COLLATERAL - MUNI 51617 2017 10.000% 12 12 13 FNMA COLLATERAL - MUNI 545249 2016 5.500% 8,519 8,550 8,581 FNMA COLLATERAL - MUNI 545303 2016 5.000% 9,762 9,628 9,672 FNMA COLLATERAL - MUNI 545400 2017 5.500% 11,553 11,497 11,638 FNMA COLLATERAL - MUNI 545492 2022 5.500% 3,448 3,414 3,451 FNMA COLLATERAL - MUNI 545679 2022 5.500% 7,193 7,005 7,198 FNMA COLLATERAL - MUNI 545786 2032 5.547% 2,683 2,694 2,564 FNMA COLLATERAL - MUNI 555724 2018 4.500% 10,589 10,538 10,328 FNMA COLLATERAL - MUNI 566074 2031 5.858% 835 834 840 FNMA COLLATERAL - MUNI 584507 2031 5.669% 1,196 1,191 1,220 FNMA COLLATERAL - MUNI 584829 2016 6.000% 2,783 2,763 2,845 FNMA COLLATERAL - MUNI 585743 2016 5.500% 8,009 8,046 8,068 FNMA COLLATERAL - MUNI 616220 2016 5.000% 7,088 6,958 7,023 FNMA COLLATERAL - MUNI 617270 2017 5.000% 8,098 8,002 8,024 FNMA COLLATERAL - MUNI 620293 2032 5.498% 3,126 3,100 3,094 FNMA COLLATERAL - MUNI 622462 2016 5.500% 6,505 6,427 6,552 FNMA COLLATERAL - MUNI 623866 2017 5.000% 9,580 9,552 9,491 FNMA COLLATERAL - MUNI 625943 2017 5.000% 13,686 13,649 13,561 FNMA COLLATERAL - MUNI 651629 2032 5.152% 1,400 1,403 1,396 FNMA COLLATERAL - MUNI 653342 2032 5.156% 926 929 937 FNMA COLLATERAL - MUNI 654158 2032 4.917% 3,587 3,591 3,568 FNMA COLLATERAL - MUNI 654195 2032 4.919% 4,338 4,341 4,316 FNMA COLLATERAL - MUNI 655646 2032 5.777% 2,396 2,399 2,389 FNMA COLLATERAL - MUNI 655798 2032 5.224% 5,661 5,649 5,639 FNMA COLLATERAL - MUNI 661349 2032 5.429% 1,279 1,282 1,282 FNMA COLLATERAL - MUNI 661501 2032 5.091% 1,947 1,955 1,943 FNMA COLLATERAL - MUNI 661744 2032 5.343% 3,339 3,351 3,366 FNMA COLLATERAL - MUNI 664521 2032 5.124% 3,708 3,722 3,703 FNMA COLLATERAL - MUNI 664750 2032 4.948% 2,401 2,405 2,401 FNMA COLLATERAL - MUNI 670731 2032 5.328% 5,624 5,647 5,445 FNMA COLLATERAL - MUNI 670779 2032 5.126% 6,972 7,012 6,939 FNMA COLLATERAL - MUNI 670890 2032 4.719% 7,571 7,593 7,450 FNMA COLLATERAL - MUNI 670912 2032 5.069% 6,326 6,345 6,280 FNMA COLLATERAL - MUNI 670947 2032 4.681% 7,878 7,906 7,745 FNMA COLLATERAL - MUNI 685479 2018 4.500% 24,123 24,277 23,527 FNMA COLLATERAL - MUNI 694852 2033 5.015% 6,677 6,797 6,634 FNMA COLLATERAL - MUNI 70007 2017 5.164% 194 196 198 FNMA COLLATERAL - MUNI 701161 2018 4.500% 16,898 17,010 16,481 FNMA COLLATERAL - MUNI 70117 2017 4.969% 83 83 84 FNMA COLLATERAL - MUNI 701269 2018 4.500% 19,071 19,194 18,600 FNMA COLLATERAL - MUNI 704592 2018 5.000% 11,122 11,482 11,019 FNMA COLLATERAL - MUNI 708635 2018 5.000% 8,030 8,287 7,956 FNMA COLLATERAL - MUNI 708646 2018 4.500% 10,679 10,709 10,416 FNMA COLLATERAL - MUNI 722779 2033 4.418% 13,437 13,466 12,779 FNMA COLLATERAL - MUNI 725558 2034 4.581% 4,202 4,161 4,136 FNMA COLLATERAL - MUNI 725694 2034 4.766% 6,480 6,348 6,269 FNMA COLLATERAL - MUNI 725719 2033 4.843% 8,732 8,697 8,565 FNMA COLLATERAL - MUNI 733525 2033 3.958% 13,106 12,562 12,446 FNMA COLLATERAL - MUNI 739194 2033 5.041% 4,058 4,071 4,011 FNMA COLLATERAL - MUNI 743856 2033 4.703% 3,419 3,424 3,334 FNMA COLLATERAL - MUNI 758873 2033 4.494% 7,233 7,149 6,996 FNMA COLLATERAL - MUNI 774968 2034 4.760% 4,066 4,114 3,952 F-27 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- FNMA COLLATERAL - MUNI 794787 2034 5.180% 10,830 10,976 10,732 FNMA COLLATERAL - MUNI 799733 2034 5.056% 6,218 6,330 6,163 FNMA COLLATERAL - MUNI 801917 2034 5.026% 12,343 12,407 12,130 FNMA COLLATERAL - MUNI 804561 2034 4.448% 8,085 8,105 7,972 FNMA COLLATERAL - MUNI 809532 2035 4.933% 9,365 9,437 9,265 FNMA COLLATERAL - MUNI 834552 2035 4.898% 9,834 9,894 9,647 FNMA COLLATERAL - MUNI 88879 2019 4.817% 279 284 280 FNMA COLLATERAL - MUNI 89125 2019 4.999% 759 777 772 FNMA_02-10 2042 5.000% 599 599 599 FNMA_03-18 2043 4.610% 15,000 15,050 14,922 FNMA_04-81 2020 4.350% 12,500 12,508 12,219 FNMA_04-89 2022 4.500% 10,000 9,943 9,758 FNMA_2004-W8 2044 4.572% 9,000 8,997 8,943 FREDDIE MAC 1B0183 2031 5.350% 2,106 2,081 2,116 FREDDIE MAC 350190 2022 5.375% 288 299 296 FREDDIE MAC 405014 2019 5.047% 127 127 130 FREDDIE MAC 405092 2019 5.366% 131 130 133 FREDDIE MAC 405185 2018 4.552% 348 346 354 FREDDIE MAC 405243 2019 5.033% 133 135 137 FREDDIE MAC 405360 2019 4.882% 49 49 50 FREDDIE MAC 405437 2019 5.775% 107 106 109 FREDDIE MAC 405455 2019 5.470% 119 120 122 FREDDIE MAC 405615 2019 5.424% 221 225 224 FREDDIE MAC 605041 2019 5.267% 25 25 25 FREDDIE MAC 605048 2018 5.206% 139 139 142 FREDDIE MAC 605432 2017 5.522% 141 141 143 FREDDIE MAC 605433 2017 4.886% 280 280 285 FREDDIE MAC 605454 2017 5.111% 521 519 529 FREDDIE MAC 606024 2019 4.778% 285 283 288 FREDDIE MAC 606025 2019 4.999% 870 871 877 FREDDIE MAC 630074 2018 4.750% 49 49 50 FREDDIE MAC 780514 2033 5.017% 14,722 15,115 14,492 FREDDIE MAC 780845 2033 4.551% 7,317 7,108 7,220 FREDDIE MAC 780903 2033 4.554% 7,164 7,096 6,935 FREDDIE MAC 781884 2034 5.162% 47,150 47,737 46,516 FREDDIE MAC 785363 2025 4.931% 450 456 461 FREDDIE MAC 785619 2026 5.750% 238 239 243 FREDDIE MAC 785634 2026 5.625% 205 205 210 FREDDIE MAC 788941 2031 5.590% 782 770 786 FREDDIE MAC 840031 2019 5.500% 12 12 12 FREDDIE MAC 840035 2019 5.583% 122 121 123 FREDDIE MAC 840036 2019 5.630% 234 238 239 FREDDIE MAC 840072 2019 4.870% 145 145 146 FREDDIE MAC 845154 2022 5.468% 329 342 336 FREDDIE MAC 845523 2023 5.460% 267 276 268 FREDDIE MAC 845654 2024 5.537% 790 803 813 FREDDIE MAC 845730 2023 5.694% 1,217 1,259 1,254 FREDDIE MAC 845733 2024 5.215% 1,060 1,077 1,091 FREDDIE MAC 846072 2029 5.279% 426 436 434 FREDDIE MAC 846107 2025 5.909% 445 455 454 FREDDIE MAC 865008 2018 6.063% 554 565 566 FREDDIE MAC FHLMC_2542 2022 5.500% 12,806 13,098 12,840 FREDDIE MAC FHLMC_2548 2022 5.500% 33,095 33,622 33,321 FREDDIE MAC FHLMC_2550 2022 5.500% 9,520 9,684 9,545 FREDDIE MAC FHLMC_2556 2022 5.500% 40,043 40,782 39,988 FREDDIE MAC FHLMC_2558 2022 5.500% 12,276 12,470 12,392 FREDDIE MAC FHLMC_2574 2022 5.000% 9,381 9,531 9,295 FREDDIE MAC FHLMC_2586 2023 5.500% 12,180 12,447 12,310 FREDDIE MAC FHLMC_2595 2022 5.500% 85,242 87,062 86,311 FREDDIE MAC FHLMC_2597 2022 5.500% 37,295 38,131 37,447 FREDDIE MAC FHLMC_2603 2022 5.500% 30,609 31,278 30,849 F-28 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- FREDDIE MAC FHLMC_2770 2032 3.750% 10,000 9,962 9,654 FREDDIE MAC FHR_2931-QA 2015 4.500% 15,972 16,109 15,811 FREDDIE MAC GOLD C90581 2022 5.500% 3,884 3,855 3,888 FREDDIE MAC GOLD C90582 2022 5.500% 2,396 2,379 2,399 FREDDIE MAC GOLD E00151 2007 7.500% 156 157 160 FREDDIE MAC GOLD E00383 2010 7.000% 895 893 924 FREDDIE MAC GOLD E00388 2010 7.000% 486 481 501 FREDDIE MAC GOLD E00426 2011 6.500% 517 513 531 FREDDIE MAC GOLD E00484 2012 6.500% 405 398 416 FREDDIE MAC GOLD E01140 2017 6.000% 10,983 11,348 11,211 FREDDIE MAC GOLD E76761 2014 6.500% 1,944 1,916 1,999 FREDDIE MAC GOLD E77557 2014 6.500% 169 166 174 FREDDIE MAC GOLD E80594 2014 6.500% 149 146 153 FREDDIE MAC GOLD E90153 2017 6.000% 2,223 2,310 2,269 FREDDIE MAC GOLD E90154 2017 6.000% 6,242 6,486 6,371 FREDDIE MAC GOLD E91041 2017 5.000% 8,663 8,676 8,592 FREDDIE MAC GOLD E91491 2012 5.000% 5,216 5,316 5,207 FREDDIE MAC GOLD E93341 2012 5.000% 16,035 16,492 16,006 FREDDIE MAC GOLD E95403 2018 5.000% 8,592 8,875 8,521 FREDDIE MAC GOLD E95556 2013 4.500% 5,208 5,361 5,114 FREDDIE MAC GOLD E95562 2013 4.500% 9,503 9,773 9,331 FREDDIE MAC GOLD E95671 2018 5.000% 11,173 11,521 11,077 FREDDIE MAC GOLD E96172 2013 4.500% 29,587 30,488 28,933 FREDDIE MAC GOLD G10364 2010 7.000% 755 752 777 FREDDIE MAC GOLD G10665 2012 7.000% 3,317 3,309 3,442 FREDDIE MAC GOLD G10949 2014 6.500% 1,200 1,185 1,234 FREDDIE MAC GOLD G11004 2015 7.000% 453 450 471 FREDDIE MAC GOLD G11193 2016 5.000% 6,091 6,007 6,041 FREDDIE MAC GOLD G11298 2017 5.000% 8,651 8,666 8,579 FREDDIE MAC GOLD G30227 2023 5.500% 9,743 10,127 9,751 GCCF_02-C1 2013 3.357% 3,239 3,237 3,164 GCCF_03-C2 2036 4.022% 6,000 6,078 5,822 GECAF_2003-1A 2015 4.929% 10,000 10,097 9,997 (d) GECAF_2004-1A 2013 4.549% 10,000 10,000 9,826 (d) GECCMC_04-C2 2040 4.119% 12,700 12,555 12,355 GINNIE MAEII 8157 2023 4.375% 574 584 578 GINNIE MAEII 8206 2017 4.375% 257 254 258 GINNIE MAEII 8240 2017 4.750% 109 105 110 GINNIE MAEII 8251 2017 4.750% 10 10 10 GINNIE MAEII 8274 2017 4.125% 370 365 372 GINNIE MAEII 8283 2017 4.125% 49 48 49 GINNIE MAEII 8293 2017 4.125% 88 87 89 GINNIE MAEII 8341 2018 4.375% 16 15 16 GINNIE MAEII 8353 2018 4.375% 185 180 185 GINNIE MAEII 8365 2018 4.375% 231 223 231 GINNIE MAEII 8377 2018 4.750% 93 90 94 GINNIE MAEII 8428 2018 4.125% 33 33 34 GINNIE MAEII 8440 2018 4.125% 142 140 143 GINNIE MAEII 8638 2025 4.375% 583 588 586 GMACCMSI_2004-C3 2041 4.207% 8,000 8,030 7,775 GMHE_2004-AR2 2034 4.405% 7,079 7,094 6,948 GMHE_2004-AR2 2034 5.237% 10,626 10,639 10,602 GNMA_02-48 2030 5.750% 741 739 740 GNMA_02-81 2025 3.815% 10,791 10,733 10,387 GNMA_03-17 2018 2.578% 8,632 8,592 8,206 GNMA_04-10 2031 4.043% 9,358 9,316 8,979 GNMA_04-19 2034 4.500% 12,390 12,432 12,219 GNMA_04-77 2020 4.585% 9,049 9,217 8,957 GNMA_05-02 2019 4.116% 11,477 11,477 11,224 GNMA_05-10 2021 4.031% 7,250 7,250 7,068 GNMA_2004-23 2027 3.629% 14,423 14,420 13,652 F-29 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- GNMA_2004-45 2021 4.020% 9,328 9,272 9,032 GNMA_2004-60 2018 4.104% 7,773 7,773 7,624 GNMA_2004-XX 2020 2.913% 8,237 8,042 7,879 GPMF_05-AR1 2045 4.619% 14,936 14,936 14,625 GPMF_05-AR5 2045 5.163% 19,915 20,365 20,363 GSAP_05-5 2045 5.370% 21,210 21,068 21,065 (d) GSMS_2004-GG2 2038 4.602% 12,215 12,343 12,058 GSR_04-10F 2019 4.500% 5,712 5,754 5,613 GSR_05-AR1 2035 4.952% 15,058 15,109 14,899 GSR_05-AR3 2035 5.039% 13,171 13,234 13,034 GSR_05-AR5 2035 5.197% 19,034 19,039 18,951 HARBORVIEW MORTGAGE LOAN TRUST 2034 4.785% 8,160 8,224 7,863 HERTZ CORP 2009 3.230% 15,000 14,996 14,364 (d) HLMLT_2004-2 2035 4.689% 6,343 6,343 6,356 HOND_2004-3 2008 2.910% 7,500 7,499 7,362 HVMLT_04-11 2035 4.720% 11,110 11,110 11,034 HVMLT_04-5 2034 3.978% 10,000 9,703 9,712 HVMLT_04-7 2034 4.646% 9,230 9,150 9,155 HVMLT_05-15 2045 5.163% 24,758 25,334 25,253 HVMLT_05-2 2035 4.590% 8,832 8,832 8,823 HVMLT_05-8 2035 4.663% 14,813 14,965 14,961 HVMLT_2004-10 2035 5.258% 5,253 5,291 5,256 HVMLT_2004-6 2034 4.713% 5,495 5,459 5,365 HVML_2004-4 2034 2.975% 5,707 5,651 5,603 IMM_05-2 2035 4.639% 7,935 7,935 7,947 IMPAC CMB TRUST IMM_05-5 2035 4.699% 6,784 6,784 6,785 INDX_04-AR12 2034 4.769% 9,593 9,627 9,604 INDX_04-AR8 2034 4.779% 10,607 10,641 10,607 INDX_05-AR1 2035 5.242% 5,870 5,928 5,964 INDX_05-AR2 2035 4.719% 8,363 8,363 8,361 INDYMAC INDX MORTGAGE LOAN TRU 2035 5.213% 8,070 8,168 8,095 JPMCCMSC_03-CIBC6 2037 4.393% 8,433 8,340 8,238 JPMCC_02-CIB5 2037 4.372% 8,650 8,721 8,502 JPMCC_04-C2 2041 4.278% 10,598 10,585 10,414 JPMCMFC_04-C1 2038 3.053% 5,527 5,433 5,302 LB COMM CONDUIT MORT TRUST LBC 2035 5.870% 170 169 170 LB-UBS COMM MORT TRUST LBUBSCM 2026 5.969% 7,500 7,510 7,601 LB-UBS COMM MORT TRUST LBUBSCM 2026 4.904% 7,500 7,513 7,495 LB-UBS COMM MORT TRUST LBUBSCM 2026 4.023% 5,500 5,511 5,383 LB-UBS COMM MORT TRUST LBUBSCM 2026 4.071% 8,383 8,432 8,165 LB-UBS COMM MORT TRUST LBUBSCM 2027 4.064% 10,000 10,026 9,714 LB-UBS COMM MORT TRUST LBUBSCM 2027 3.636% 12,298 12,330 11,957 LB-UBS COMM MORT TRUST LBUBSCM 2027 4.207% 9,680 9,696 9,486 LBUBSCMT_04-C4 2029 4.567% 10,000 10,092 9,887 LBUBSCMT_05-C5 2040 4.741% 19,244 19,332 19,197 LBUBSCMT_2004-C7 2029 3.625% 6,108 6,130 5,952 LBUBSCMT_2004-C8 2029 4.201% 18,425 18,239 17,969 LBUBS_05-C1 2030 4.310% 13,100 12,979 12,731 LEHMAN ABS CORPORATION LABS_05 2034 4.559% 4,791 4,791 4,791 LIFT - LEASE INVESTMENT FLIGHT 2016 4.799% 3,079 3,079 2,865 MARM_04-7 2034 4.819% 10,068 10,106 10,109 MARM_05-1 2035 5.169% 11,666 11,890 11,778 MBNA CREDIT CARD MASTER NOTE T 2010 4.809% 10,000 10,049 10,073 MERRILL LYNCH MOR INVEST INC M 2033 4.086% 10,000 9,980 10,056 MLCC MORTGAGE INVESTORS MLCC_0 2030 4.609% 8,354 8,354 8,356 MLCC_2004-1 2034 4.742% 4,248 4,256 4,198 MLMI_05-A1 2034 4.602% 8,231 8,250 8,102 MLMI_05-A2 2035 4.497% 13,255 13,260 12,979 MORGAN STANLEY CAPITAL I MSDWC 2040 3.270% 7,862 7,888 7,383 MSAC_2004-OP1 2034 4.959% 10,000 10,000 10,017 MSALT_2004-HB2 2009 2.940% 4,670 4,670 4,568 F-30 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- MSC 2004-IQ8 A3 2040 4.500% 7,000 7,025 6,847 MSCI_04-HQ4 2040 4.220% 7,000 7,004 6,817 MSDWCI_02-IQ2 2035 5.160% 1,487 1,487 1,489 MSDWCI_02-TOP7 2039 5.380% 3,480 3,503 3,521 MSDWCI_04-T13 2045 3.940% 15,000 14,745 14,415 MSM_2004-10AR 2034 4.842% 7,201 7,271 7,239 MSM_2004-10AR 2034 5.142% 7,497 7,577 7,536 MSM_2004-6AR 2034 4.362% 7,449 7,402 7,483 NAVOT_05-A 2014 4.430% 9,000 8,999 8,862 NEW YORK CITY TAX LIEN NYCTL_0 2010 4.780% 2,977 2,977 2,950 (d) NPF XII INC NPF12_00-2 2006 4.711% 10,000 370 370 (b)(d)(e) NSLT_2001-A 2012 5.760% 8,804 9,049 8,943 PCMT_03-PWR1 2036 3.669% 6,816 6,620 6,544 POPLR_05-3 2035 4.437% 10,060 10,055 9,871 PROVIDIAN GATEWAY MASTER TRUST 2011 3.350% 5,000 4,999 4,882 (d) RALI_05-QA2 2035 5.081% 13,197 13,340 13,009 RALI_2004-QR1 2034 5.250% 6,862 6,907 6,728 RALI_2004-QS5 2034 4.750% 4,955 4,937 4,904 RAMC_05-3 2035 4.814% 10,000 9,997 9,894 RASC_04-KS12 2035 4.909% 7,000 7,000 7,022 RASC_04-KS9 2034 4.669% 14,925 14,936 14,951 RESIDENTIAL ACCREDIT LOANS INC 2035 5.631% 5,339 5,396 5,330 RESTRUCTURED ASSET SECURITIES 2030 4.000% 7,141 7,111 6,857 (d) RFMSI_03-QS2 2033 4.500% 6,346 6,291 6,128 RFMSI_04-KS9 2034 4.620% 11,000 10,995 10,635 RFMSI_05-SA2 2035 5.160% 26,475 26,540 26,091 SASC_2003-24A 2033 5.571% 3,504 3,571 3,503 SASC_2004-18H 2034 4.750% 10,000 10,067 9,811 SAST_2004-3 2034 4.559% 776 776 776 SBAP_05-10D 2015 4.510% 5,571 5,571 5,497 SMALL BUSINESS ADMIN 2022 4.750% 3,948 4,025 3,897 SMALL BUSINESS ADMIN 2013 3.900% 2,325 2,354 2,254 SMALL BUSINESS ADMIN 2014 3.870% 5,666 5,728 5,494 STRUCTURED ADJUSTABLE RATE MOR 2034 4.935% 9,917 10,032 9,816 TMCL_05-1A 2020 4.619% 18,833 18,833 18,836 (d) TOPT_01-TZH 2013 6.522% 5,000 4,997 5,070 (d) TRIAD FINANCIAL CORP 2010 4.280% 10,000 9,999 9,901 WAMU_04-AR10 2044 4.819% 9,741 9,777 9,744 WAMU_04-AR12 2044 4.640% 13,624 13,659 13,646 WAMU_05-AR2 2045 4.599% 3,497 3,497 3,496 WAMU_05-AR3 2035 4.650% 13,047 13,106 12,821 WAMU_2004-AR4 2034 3.804% 10,000 9,799 9,610 WASHINGTON MUTUAL WAMU_03-A10 2033 4.067% 15,000 14,805 14,577 WASHINGTON MUTUAL WAMU_03-A11 2033 3.985% 7,500 7,491 7,283 WASHINGTON MUTUAL WAMU_03-A12 2034 3.961% 12,500 12,485 12,307 WASHINGTON MUTUAL WAMU_03-AR3 2033 3.927% 9,213 9,213 9,002 WASHINGTON MUTUAL WAMU_04-AR5- 2034 3.851% 10,000 9,700 9,830 WASHINGTON MUTUAL WAMU_04-AR7 2034 3.946% 10,000 9,729 9,674 WASHINGTON MUTUAL WAMU_04-S3 2034 5.500% 16,047 16,340 15,965 WASHINGTON MUTUAL WAMU_05-AR1 2045 4.629% 10,687 10,687 10,689 WASHINGTON MUTUAL WAMU_05-AR10 2035 4.845% 10,000 10,002 9,799 WASHINGTON MUTUAL WAMU_05-AR4 2035 4.679% 10,000 9,957 10,030 WASHINGTON MUTUAL WAMU_05-AR9 2045 4.699% 9,592 9,592 9,584 WBCMT_2004-C11 2041 3.333% 7,397 7,346 7,196 WFMBS_04-DD 2035 4.522% 5,761 5,771 5,883 WFMBS_04-P 2034 4.259% 7,877 7,676 7,634 WFMBS_05-AR10 2035 4.110% 11,865 11,784 11,694 WFMBS_05-AR2 2035 4.556% 5,000 5,021 4,907 WFMBS_05-AR2 2035 4.950% 6,624 6,680 6,646 WFMBS_05-AR4 2035 4.531% 13,133 13,099 12,895 WFMBS_2004-0 2034 4.896% 7,808 7,730 7,606 F-31 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- WFMBS_2004-CC 2035 4.964% 8,476 8,518 8,395 WFMBS_2004-W 2034 4.583% 20,000 20,154 19,804 WFOT_03-4 2008 2.390% 1,433 1,433 1,430 TOTAL - MORTGAGE BACKED SECURITIES 3,261,182 3,266,592 3,218,491 TOTAL - MORTGAGE BACKED SECURITIES 3,261,182 3,266,592 3,218,491 MUNICIPAL BONDS New Jersey NEW JERSEY STATE TRNPK AUTH 2009 3.140% 4,000 4,000 3,813 TOTAL - NEW JERSEY 4,000 4,000 3,813 New York NEW YORK CITY GO - LT 2008 3.000% 5,000 5,002 4,792 TOTAL - NEW YORK 5,000 5,002 4,792 Pennsylvania WYOMING VALLEY PA SANI AUTH WT 2007 5.125% 30 30 30 TOTAL - PENNSYLVANIA 30 30 30 TOTAL - MUNICIPAL BONDS 9,030 9,032 8,635 CORPORATE DEBT SECURITIES Corporate - Asset Backed HERTZ CORP 2014 8.875% 1,440 1,446 1,467 (d) TOTAL - CORPORATE - ASSET BACKED 1,440 1,446 1,467 Corporate - Finance ALLIANCE CAPITAL MGMT -LP 2006 5.625% 12,500 12,491 12,562 ALLSTATE CORP 2006 5.375% 5,000 4,997 5,023 ALLSTATE FINANCIAL GLOBAL FUND 2008 4.250% 5,000 4,994 4,916 (d) AMERICAN EXPRESS CREDIT CORP 2010 5.000% 10,000 9,965 9,994 AMERICAN GENERAL FINANCE CORP 2007 4.500% 7,500 7,491 7,440 AMERICAN GENERAL FINANCE CORP 2008 2.750% 7,500 7,449 7,115 ASIF GLOBAL FINANCE 2008 4.444% 15,000 15,000 14,983 (d) ASSOCIATED BK GREEN BAY 2007 3.700% 6,000 5,976 5,878 BANK OF AMERICA CORP 2010 7.800% 5,000 5,635 5,521 BANK OF AMERICA CORP 2009 5.875% 5,000 5,263 5,135 BANK OF NEW YORK CO INC 2007 5.200% 7,000 7,035 7,035 BANK OF NEW YORK CO INC 2009 3.625% 10,000 9,983 9,681 BANK ONE NA - CHICAGO 2008 3.700% 19,000 19,103 18,612 BANKNORTH GROUP INC 2008 3.750% 8,650 8,690 8,460 BCP CRYSTAL US HOLDINGS CORP 2014 9.625% 325 327 362 BERKSHIRE HATHAWAY 2008 3.375% 17,500 17,465 16,862 CAMDEN PROPERTY TRUST 2009 4.700% 3,750 3,746 3,693 CAMDEN PROPERTY TRUST 2010 4.375% 10,000 10,014 9,673 CAPITAL ONE BANK 2006 6.875% 8,800 8,819 8,814 CLOROX COMPANY 2010 4.200% 27,660 27,660 26,803 COUNTRYWIDE FUNDING CORP 2006 5.500% 5,000 4,997 5,017 COUNTRYWIDE FUNDING CORP 2009 4.125% 15,000 14,674 14,449 CROWN AMERICAS INC 2013 7.625% 1,570 1,574 1,629 (d) CROWN AMERICAS INC 2015 7.750% 825 848 854 (d) DIAGEO CAPITAL PLC 2007 3.500% 4,000 3,997 3,896 DIAGEO CAPITAL PLC 2008 3.375% 10,000 9,965 9,679 EOP OPERATING LP 2007 7.750% 10,762 11,506 11,273 ERAC USA FINANCE COMPANY 2008 7.350% 14,658 15,789 15,381 (d) ERAC USA FINANCE COMPANY 2008 5.300% 12,000 11,992 12,045 (d) ERP OPERATING LP 2009 4.750% 12,500 12,484 12,355 F-32 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- FIFTH THIRD BANCORP 2008 3.375% 12,000 11,939 11,585 FLEETBOSTON FINANCIAL CORP 2007 4.200% 11,000 11,079 10,901 FORD MOTOR CREDIT CO 2006 6.875% 5,000 4,989 4,989 GOLDMAN SACHS 2012 6.600% 10,000 10,127 10,742 HEINZ H.J. COMPANY 2008 6.428% 10,000 10,290 10,273 (d) HOUSEHOLD FINANCE CORP 2006 6.500% 2,000 2,000 2,002 HOUSEHOLD FINANCE CORP 2007 5.750% 5,000 4,973 5,041 HOUSEHOLD FINANCE CORP 2008 4.625% 12,000 12,173 11,921 HSBC BANK USA 2009 3.875% 20,000 19,906 19,283 INDESIT COMPANY SPA 2009 5.170% 19,000 19,000 18,573 (d) JP MORGAN CHASE & COMPANY 2008 4.000% 10,000 10,024 9,832 KELLOGG UK HOLDING CO LIMITED 2006 4.490% 2,800 2,800 2,783 (d) KEY BANK OF NY 2008 7.500% 9,000 10,031 9,616 M & I MARSHALL & ILSLEY BANK 2009 3.950% 21,500 21,474 20,908 MARSHALL & ILSLEY CORPORATION 2006 5.750% 10,000 9,999 10,046 MBNA CORP 2008 4.625% 5,000 4,996 4,971 MERRILL LYNCH & CO INC 2009 4.750% 10,000 9,988 9,921 MERRILL LYNCH & CO INC 2008 3.700% 7,500 7,620 7,307 MERRILL LYNCH & CO INC 2010 4.500% 2,000 2,008 1,956 MERRILL LYNCH AIG CBO 2010 0.000% 6,500 - 0 (b)(d)(e) MERRILL LYNCH ELLIOTT & PAIGE 2010 0.000% 11,000 0 0 (b)(d)(e) METROPOLITAN LIFE GLOBAL FUNDI 2010 4.500% 20,000 19,949 19,610 (d) MORGAN STANLEY 2006 6.100% 5,000 5,000 5,018 MORGAN STANLEY 2007 5.800% 5,000 4,996 5,051 NATIONWIDE BLDG SOCIETY 2009 4.000% 5,000 4,993 4,871 NEWS AMERICA INC 2008 6.625% 3,150 3,353 3,249 NEWS AMERICA INC 2010 4.750% 2,000 2,029 1,970 OLD NATIONAL BANCORP 2008 3.500% 7,000 6,989 6,755 POPULAR NA INC 2008 4.250% 12,500 12,478 12,265 POPULAR NA INC 2008 3.875% 2,500 2,502 2,416 PRICOA GLOBAL FUNDING I 2008 4.350% 38,000 38,111 37,577 (d) PRICOA GLOBAL FUNDING I 2010 4.360% 15,000 15,000 15,025 (d) PRICOA GLOBAL FUNDING I 2010 4.200% 2,480 2,477 2,402 (d) PRINCIPAL LIFE INC FNDG 2010 5.200% 5,000 4,998 5,039 QUEBECOR WORLD CAPITAL CORP 2006 7.200% 10,000 10,000 10,006 (d) ROGERS WIRELESS INC 2010 7.616% 1,500 1,544 1,549 SAFECO CORP 2010 4.875% 6,000 5,980 5,931 SHEAR LEH HUTT HLDG 2006 6.250% 10,000 9,998 10,057 SHEAR LEH HUTT HLDG 2010 4.375% 8,500 8,448 8,267 SHEAR LEH HUTT HLDG 2010 4.250% 5,000 4,983 4,876 SIMON PROPERTY GROUP INC 2007 7.125% 10,000 10,087 10,321 ST PAUL COMPANIES 2007 5.750% 7,000 6,994 7,058 SUNTRUST BANK 2009 4.550% 20,000 19,987 19,746 SUNTRUST BANK 2011 6.375% 3,500 3,869 3,710 SUNTRUST BANKS INC 2007 5.050% 7,500 7,499 7,516 TIAA GLOBAL MARKETS 2008 3.875% 7,500 7,497 7,361 (d) TRAVELERS PROPERTY CASUALTY 2008 3.750% 5,000 4,994 4,868 UNION PLANTERS NATIONAL BANK 2007 5.125% 5,000 4,999 5,020 US BANCORP 2008 3.125% 5,000 4,939 4,828 US BANK NA 2009 3.400% 6,800 6,731 6,510 US BANK NA 2011 6.375% 21,455 23,228 22,910 WACHOVIA CORP 2006 4.950% 6,000 5,998 6,000 WACHOVIA CORP 2009 3.625% 10,000 9,985 9,645 WASHINGTON MUTUAL BANK FA 2011 6.875% 1,500 1,649 1,620 WASHINGTON MUTUAL INC 2006 7.500% 1,400 1,399 1,423 WASHINGTON MUTUAL INC 2008 4.375% 12,980 13,135 12,825 WELLS FARGO & CO 2007 5.125% 5,000 5,000 5,010 WELLS FARGO & CO 2008 3.500% 5,000 4,998 4,858 WELLS FARGO BANK NA 2011 6.450% 20,250 22,238 21,581 WESTFIELD GROUP 2010 4.375% 12,500 12,462 12,099 (d) WORLD SAVINGS BANK FSB 2009 4.125% 15,000 14,963 14,602 F-33 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- WORLD SAVINGS BANK FSB 2009 4.500% 30,000 30,098 29,613 TOTAL - CORPORATE - FINANCE 860,815 851,921 838,849 Corporate - Industrial ALLIED WASTE NORTH AMERICA 2011 6.375% 505 489 492 ALUMINUM CO OF AMERICA-ALCOA 2007 4.250% 10,000 9,989 9,903 AMERICAN STANDARD INC 2008 7.375% 2,000 1,967 2,088 AMERISOURCE CORP 2012 5.625% 400 398 400 (d) AMERISOURCE CORP 2015 5.875% 1,295 1,283 1,306 (d) BALL CORP 2012 6.875% 2,000 2,049 2,045 BEAZER HOMES USA INC 2013 6.500% 750 767 713 BOISE CASCADE LLC 2012 7.025% 1,000 1,013 975 BOISE CASCADE LLC 2014 7.125% 500 524 466 BOYD GAMING CORP 2014 6.750% 1,000 1,002 993 BRITISH SKY BROADCASTING 2009 6.875% 1,500 1,474 1,571 BURLINGTON NORTHERN AND SANTA 2012 4.255% 5,562 5,562 5,177 (d) BURLINGTON NORTHERN AND SANTA 2012 4.255% 9,978 9,978 9,324 (d) BURLINGTON NORTHERN SANTA FE C 2010 7.125% 5,000 5,592 5,442 CADBURY SCHWEPPES US 2008 3.875% 12,500 12,479 12,139 (d) CAESARS ENTERTAINMENT INC 2013 7.000% 1,000 1,071 1,070 CALIFORNIA STEEL INDUSTRIES 2014 6.125% 1,500 1,493 1,403 CANADIAN NATL RAILWAY COMPANY 2009 4.250% 15,250 15,215 14,871 CARDINAL HEALTH INC 2008 6.250% 16,585 17,431 16,983 CARNIVAL PLC 2007 3.750% 10,000 9,983 9,775 CASCADES INC 2013 7.250% 425 435 387 CHESAPEAKE ENERGY CORP 2013 7.500% 1,500 1,570 1,594 CHESAPEAKE ENERGY CORP 2014 7.500% 1,000 1,021 1,060 CHESAPEAKE ENERGY CORP 2015 6.375% 300 304 300 CHESAPEAKE ENERGY CORP 2017 6.500% 210 208 211 (d) CHURCH & DWIGHT 2012 6.000% 1,750 1,758 1,724 COMCAST CORP 2011 5.500% 7,500 7,852 7,543 COMMUNITY HEALTH SYSTEMS INC 2012 6.500% 2,350 2,372 2,288 CONOCO FUNDING CO 2006 5.450% 3,000 3,028 3,012 COTT BEVERAGES INC 2011 8.000% 1,750 1,739 1,794 CSC HOLDINGS INC 2007 7.875% 2,500 2,455 2,544 CSC HOLDINGS INC 2012 7.000% 500 513 473 (d) CSX CORP 2009 4.875% 8,000 8,076 7,963 CVS CORP 2009 4.000% 17,500 17,567 16,831 DAIMLERCHRYSLER NA HLDG 2006 6.400% 6,000 6,024 6,028 DAIMLERCHRYSLER NA HLDG 2008 4.750% 9,000 9,232 8,917 DAIMLERCHRYSLER NA HLDG 2008 4.050% 10,000 10,080 9,734 DAVITA INC 2013 6.625% 1,000 999 1,018 DEL MONTE CORPORATION 2015 6.750% 1,500 1,510 1,463 DENBURY RESOURCES INC 2013 7.500% 665 684 675 DEX MEDIA WEST 2010 8.500% 890 928 932 DEX MEDIA WEST 2011 5.875% 1,250 1,250 1,258 DIRECT TV 2015 6.375% 1,985 1,963 1,940 DISNEY COMPANY - THE WALT 2006 5.500% 10,000 10,015 10,046 DISNEY COMPANY - THE WALT 2007 5.375% 5,000 4,996 5,028 DOMINOS INC 2011 8.250% 500 518 523 DONNELLEY - RR & SONS 2009 3.750% 7,500 7,493 7,107 DOW CHEMICAL 2009 4.027% 22,500 22,500 21,604 (d) DRS TECHNOLOGIES INC 2013 6.875% 2,550 2,592 2,438 ECHOSTAR DBS CORP 2008 5.750% 1,750 1,755 1,715 ECHOSTAR DBS CORP 2011 6.375% 1,000 1,000 963 EMMIS COMMUNICATIONS CORP 2012 6.875% 1,000 1,004 994 ENCORE ACQUISITION CO 2014 6.250% 1,000 955 950 ENERGIZER HOLDINGS INC 2007 3.440% 6,000 6,000 5,817 (d) ENERGIZER HOLDINGS INC 2008 4.900% 4,000 4,000 3,977 (d) EQUIFAX INC 2007 4.950% 4,000 3,997 3,997 F-34 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- EQUISTAR CHEMICALS LP 2009 8.750% 1,500 1,546 1,579 FISHER SCIENTIFIC INTL INC 2015 6.125% 1,175 1,182 1,175 (d) FLEXTRONICS INTERNATIONAL 2013 6.500% 1,050 1,060 1,067 GARDNER DENVER INC 2013 8.000% 250 250 263 GENERAL ELECTRIC CAP CORP 2008 3.500% 7,500 7,496 7,279 GENERAL ELECTRIC CAP CORP 2010 4.250% 2,000 1,993 1,939 GENERAL ELECTRIC CAP CORP 2007 5.375% 5,000 4,995 5,031 GENERAL ELECTRIC CAP CORP 2008 4.250% 4,000 3,990 3,954 GENERAL MOTORS ACCEPTANCE CORP 2011 6.875% 12,500 13,234 11,399 GEORGIA GULF CORP 2013 7.125% 2,450 2,547 2,514 GIBRALTAR INDUSTRIES 2015 8.000% 250 250 250 (d) HALLMARK CARDS INC 2008 4.220% 10,000 10,000 9,684 (d) HCA INC 2012 6.300% 1,800 1,822 1,809 HCA INC 2009 5.500% 500 502 494 HILTON HOTELS CORP 2009 7.200% 1,500 1,538 1,575 HORTON D R INC 2009 8.000% 2,000 1,996 2,128 HORTON D R INC 2012 5.375% 5,825 5,799 5,628 HOST MARRIOTT L.P. 2013 7.125% 2,000 2,061 2,080 ING SECURITY LIFE INSTITUTIONA 2010 4.250% 23,750 23,724 23,148 (d) ING SECURITY LIFE INSTITUTIONA 2010 4.340% 11,750 11,767 11,757 (d) INTERNATIONAL PAPER COMPANY 2008 3.800% 15,000 15,054 14,541 JONES APPAREL GROUP INC 2006 7.875% 2,000 1,999 2,018 JONES APPAREL GROUP INC 2009 4.250% 11,250 11,248 10,722 K HOVNANIAN ENTERPRISES INC 2014 6.375% 1,000 1,027 946 K HOVNANIAN ENTERPRISES INC 2015 6.250% 750 750 706 KB HOME 2014 5.750% 1,660 1,652 1,565 KB HOME 2015 5.875% 2,035 2,024 1,919 KELLOGG CO. 2008 2.875% 5,000 4,999 4,768 KENDALL-JACKSON WINE ESTATES L 2009 5.456% 12,000 12,000 11,307 (d) KRAFT FOODS INC 2006 4.625% 15,000 14,996 14,963 KRAFT FOODS INC 2011 5.625% 9,250 9,611 9,463 KRAFT FOODS INC 2008 4.000% 4,000 3,987 3,897 KROGER COMPANY 2006 8.150% 4,000 4,000 4,060 L-3 COMMUNICATIONS CORP 2013 6.125% 2,750 2,751 2,729 L-3 COMMUNICATIONS CORP 2015 5.875% 1,000 1,000 970 LIN TELEVISION CORP 2013 6.500% 1,500 1,482 1,438 MANITOWOC CO 2013 7.125% 1,575 1,603 1,618 MASCO CORP 2007 4.625% 5,000 4,996 4,959 MASSEY ENERGY COMPANY 2024 6.875% 990 991 999 (d) MAY DEPT STORES 2009 4.800% 17,500 17,563 17,256 MEDIANEWS GROUP INC 2013 6.875% 1,500 1,494 1,434 (d) MERITAGE CORP 2015 6.250% 575 545 523 MERITOR AUTOMOTIVE INC 2009 6.800% 500 513 466 MGM MIRAGE INC 2009 6.000% 2,250 2,259 2,239 MIRANT NORTH AMERICA LLC 2013 7.375% 490 496 496 (d) MOHEGAN TRIBAL GAMING AUTHORIT 2009 6.375% 500 504 503 MOLSON COORS CAPITAL FINANCE U 2010 4.850% 5,000 5,000 4,931 MOOG INC 2015 6.250% 1,500 1,514 1,478 NALCO COMPANY 2011 7.750% 1,500 1,538 1,541 NEWFIELD EXPLORATION CO 2011 7.625% 2,500 2,568 2,675 NEWFIELD EXPLORATION CO 2014 6.625% 200 209 204 NISOURCE INC 2006 3.628% 10,000 10,021 9,892 NORAMPAC INC 2013 6.750% 2,500 2,487 2,413 NORTHROP GRUMMAN 2011 7.125% 5,000 5,499 5,448 NOVA CHEMICALS CORPORATION 2012 6.500% 1,800 1,872 1,744 NOVELIS INC 2015 7.500% 1,300 1,331 1,212 (d) OCCIDENTAL PETROLEUM CORP 2008 7.375% 7,500 8,016 8,012 OFFICEMAX INC 2013 7.000% 1,500 1,573 1,474 OFFSHORE LOGISTICS INC 2013 6.125% 500 481 468 OMNICARE INC 2013 6.125% 1,750 1,776 1,728 OMNICARE INC 2015 6.875% 575 584 584 F-35 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- OWENS-BROCKWAY 2011 7.750% 1,500 1,547 1,566 PACIFIC ENERGY PARTNERS L.P. 2014 7.125% 500 507 515 PACIFIC ENERGY PARTNERS L.P. 2015 6.250% 250 252 246 (d) PACKAGING CORP OF AMERICA 2008 4.375% 3,250 3,242 3,151 PEABODY ENERGY CORP 2013 6.875% 2,800 2,886 2,912 PEABODY ENERGY CORP 2016 5.875% 1,000 1,007 974 PRAXAIR INC. 2008 2.750% 15,000 14,967 14,253 RAYTHEON COMPANY 2010 6.550% 1,655 1,825 1,744 RAYTHEON COMPANY 2010 6.000% 638 693 660 RAYTHEON COMPANY 2007 4.500% 2,995 3,017 2,969 RIO TINTO LTD 2008 2.625% 12,500 12,498 11,759 ROGERS CABLE SYSTEMS 2013 6.250% 1,500 1,520 1,479 SAFEWAY INC 2007 4.800% 5,000 4,997 4,981 SARA LEE CORP 2008 2.750% 15,000 14,974 14,187 SCOTTS COMPANY 2013 6.625% 1,500 1,525 1,519 SEAGATE TECHNOLOGY HDD HOLDING 2009 8.000% 250 262 263 SHAW COMMUNICATIONS INC 2011 7.250% 1,250 1,295 1,303 SILGAN HOLDING 2013 6.750% 1,000 1,001 995 SPEEDWAY MOTOR SPORT 2013 6.750% 1,000 1,010 1,013 STANDARD PACIFIC CP 2008 6.500% 1,500 1,503 1,483 STANDARD PACIFIC CP 2010 6.500% 295 298 281 STANLEY WORKS 2007 3.500% 2,500 2,496 2,440 STARWOOD HOTELS AND RESORTS WO 2012 7.875% 500 545 551 STATION CASINOS INC. 2012 6.000% 1,660 1,630 1,656 SUNGARD DATA 2014 4.875% 370 325 322 SUSQUEHANNA MEDIA CO 2013 7.375% 1,000 1,030 1,065 TEXAS GENCO HOLDINGS 2014 6.875% 2,250 2,327 2,436 (d) THOMSON CORP 2009 4.250% 7,500 7,459 7,304 TIME WARNER INC 2006 6.125% 8,000 7,999 8,024 TRANSDIGM INC 2011 8.375% 655 685 689 TRIAD HOSPITALS 2013 7.000% 500 512 501 TRIAD HOSPITALS 2012 7.000% 1,500 1,500 1,532 TYCO INTL GROUP SA 2009 6.125% 13,500 14,031 13,798 UNION PACIFIC CORP 2009 3.875% 6,000 5,990 5,797 UNION PACIFIC CORP 2010 3.625% 3,000 2,986 2,820 UNION PACIFIC RAILROAD COMPANY 2012 3.860% 13,242 13,242 12,329 (d) UNION TANK 2008 6.500% 1,653 1,652 1,680 UNITED RENTALS - NORTH AMERICA 2012 6.500% 915 914 891 UNITED STATES STEEL 2010 9.750% 1,500 1,561 1,631 VAIL RESORTS INC 2014 6.750% 500 508 500 VALERO ENERGY CORP 2007 6.125% 3,500 3,498 3,549 VALMONT INDUSTRIES 2014 6.875% 1,500 1,503 1,511 VALSPAR CORP 2007 6.000% 10,000 9,985 10,115 VIACOM INC 2007 5.625% 2,500 2,512 2,513 VIDEOTRON - LE GRPE LTD 2014 6.875% 1,000 1,018 1,013 VIN & SPIRIT AB - V&S 2008 3.570% 15,000 15,000 14,375 (d) WABTEC 2013 6.875% 1,360 1,378 1,374 WALMART STORES 2006 5.450% 10,000 10,042 10,043 WCI COMMUNITIES 2013 7.875% 1,810 1,849 1,706 WEYERHAEUSER CO 2008 5.950% 10,000 10,208 10,202 XTO ENERGY INC 2013 6.250% 1,500 1,536 1,595 XTO ENERGY INC 2014 4.900% 1,000 994 973 TOTAL - CORPORATE - INDUSTRIAL 700,998 707,656 690,228 Corporate - Utility ALLTEL CORP 2007 4.656% 10,000 10,092 9,955 AMERICAN ELECTRIC POWER 2010 5.375% 6,000 6,240 6,048 AMERICAN ELECTRIC POWER 2009 5.527% 15,000 15,000 14,105 (d) AMERITECH CAPITAL FUNDING CORP 2008 6.150% 7,000 7,425 7,130 BELLSOUTH CAP FUNDING 2010 7.750% 15,000 16,811 16,412 F-36 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- CINCINNATI BELL 2013 7.250% 1,250 1,270 1,300 CINGULAR WIRELESS LLC 2006 5.625% 5,000 4,996 5,036 COMCAST CABLE COMMUNICATIONS I 2008 6.200% 15,000 15,853 15,398 COMCAST CABLE COMMUNICATIONS I 2006 6.375% 1,300 1,300 1,302 CONSOLIDATED EDISON CO OF NEW 2008 6.250% 6,000 6,339 6,150 CONSOLIDATED NAT GAS CO 2008 6.625% 5,700 6,114 5,929 CONSUMERS ENERGY 2008 6.375% 3,500 3,675 3,582 CONSUMERS ENERGY 2008 4.250% 9,500 9,669 9,304 DETROIT ENERGY 2009 6.650% 5,000 5,357 5,222 DEUTSCHE TELEKOM INTERNATIONAL 2010 8.500% 15,750 18,334 17,857 DEUTSCHE TELEKOM INTERNATIONAL 2008 3.875% 5,000 5,001 4,882 DPL INC 2011 6.875% 899 926 947 DUKE ENERGY CORP. 2008 3.750% 4,500 4,501 4,393 DUKE ENERGY CORP. 2008 4.200% 10,000 10,050 9,780 ENERGY EAST CORP 2006 5.750% 7,500 7,492 7,540 FIRSTENERGY CORP. 2006 5.500% 10,000 9,998 10,028 FLORIDA POWER CORP 2008 4.880% 10,000 10,000 9,999 FPL FUELS INC 2006 2.340% 5,370 5,370 5,312 (d) FPL FUELS INC 2006 2.340% 4,630 4,630 4,579 (d) FPL GROUP CAPITAL INC. 2007 4.086% 15,000 15,094 14,851 FRANCE TELECOM 2006 7.200% 14,301 14,385 14,358 GULF STATE UTILITIES 2009 4.810% 10,000 10,000 9,755 KANSAS CITY POWER & LIGHT 2007 6.000% 4,000 3,998 4,033 NISOURCE FINANCE CORPORATION 2010 7.875% 7,500 8,549 8,310 NISOURCE FINANCE CORPORATION 2006 3.200% 3,000 3,001 2,952 NORTHERN STATES POWER 2010 4.750% 3,500 3,494 3,463 NRG ENERGY INC 2013 8.000% 1,000 1,019 1,115 PACIFIC GAS AND ELECTRIC COMPA 2009 3.600% 17,500 17,202 16,788 PACIFIC GAS AND ELECTRIC COMPA 2011 4.200% 6,250 6,237 5,981 PACIFICORP 2008 4.300% 6,500 6,495 6,400 PLAINS EXPLOR & PROD 2014 7.125% 895 904 926 PPL ELECTRIC UTILITIES CORPORA 2007 5.875% 6,135 6,423 6,221 PROGRESS ENERGY CAROLINAS 2009 5.950% 4,000 4,194 4,103 PROGRESS ENERGY INC 2006 6.750% 2,100 2,100 2,107 PSEG POWER 2007 5.381% 5,000 5,044 5,011 PUB SERV CO OF COLORADO 2008 4.375% 8,730 8,859 8,609 PUGET ENERGY INC 2008 3.363% 3,500 3,500 3,368 RELIANT RESOURCES INC 2014 6.750% 1,500 1,523 1,313 SBC COMMUNICATIONS INC 2011 6.250% 7,000 7,487 7,318 SBC COMMUNICATIONS INC 2006 5.750% 5,000 5,013 5,013 SBC COMMUNICATIONS INC 2009 4.125% 5,000 4,973 4,828 SCANA CORP 2008 4.560% 20,000 20,000 20,013 SEMPRA ENERGY 2009 4.750% 11,000 10,996 10,846 SOUTHERN CA EDISON 2007 4.555% 15,000 14,985 14,985 SOUTHERN CA GAS CO 2009 4.580% 10,000 10,000 9,998 SOUTHERN COMPANY CAPITAL FUNDI 2007 5.300% 6,500 6,497 6,498 SOUTHWESTERN PUB SRV CO 2006 5.125% 7,000 6,997 7,001 SPRINT CAPITAL CORP 2011 7.625% 10,000 11,155 11,027 TAMPA ELECTRIC CO 2007 5.375% 3,785 3,931 3,801 TELECOM ITALIA 2010 4.000% 15,000 14,795 14,287 TELUS CORP ORD 2007 7.500% 9,000 9,404 9,294 TELUS CORP ORD 2011 8.000% 9,900 11,347 11,098 TRANS CONTINENTAL GAS PIPELINE 2011 7.000% 750 789 783 US WEST COMMUNICATIONS INC 2015 7.625% 510 515 546 (d) VERIZON NEW YORK INC 2012 6.875% 4,000 4,336 4,170 VERIZON PENNSYLVANIA 2011 5.650% 12,250 12,704 12,213 VIRGINIA ELEC & PWR CO 2006 5.750% 4,675 4,674 4,686 WISCONSIN ENERGY 2008 5.500% 2,500 2,572 2,539 XCEL ENERGY 2008 3.400% 2,500 2,455 2,408 TOTAL - CORPORATE - UTILITY 460,680 474,085 465,206 F-37 AMERIPRISE CERTIFICATE COMPANY SCHEDULE I INVESTMENTS OF SECURITIES IN UNAFFILIATED ISSUERS AT DECEMBER 31, 2005 BAL HELD AT 12/31/05 PRINCIPAL AMT OF BONDS & NOTES OR # OF COST VALUE AT 12/31/05 ISSUER NAME AND ISSUER TITLE SHARES (NOTES a & c) (NOTE a) - ----------------------------------------------------- ----------------------------------------------------- TOTAL - CORPORATE DEBT SECURITIES 2,023,933 2,035,108 1,995,750 TOTAL - BONDS AND NOTES 5,316,804 5,333,393 5,245,072 PREFERRED STOCK PREFERRED STOCK - STATED MATURITY Corporate - Industrial BHP OPERATIONS 2006 6.760% 50 5,000 5,066 (d) WHIRLPOOL CORP 2008 6.550% 9 902 908 (d) TOTAL - CORPORATE - INDUSTRIAL 59 5,902 5,973 Corporate - Utility AMERENCILCO 2008 5.850% 31 3,131 3,079 LOUISVILLE GAS & ELECTRIC CO 2008 5.875% 10 1,019 1,021 SAN DIEGO GAS & ELEC COMPANY 2008 7.050% 45 1,134 1,104 TOTAL - CORPORATE - UTILITY 86 5,284 5,204 TOTAL - PREFERRED STOCK - STATED MATURITY 145 11,186 11,177 PREFERRED STOCK - PERPETUAL Corporate - Finance CITIGROUP INC 5.860% 150 7,782 7,565 TOTAL - CORPORATE - FINANCE 150 7,782 7,565 TOTAL - PREFERRED STOCK - PERPETUAL 150 7,782 7,565 TOTAL - PREFERRED STOCK 295 18,968 18,742 TOTAL INVESTMENTS IN SECURITIES OF UNAFFILIATED ISSUERS 5,317,099 5,352,361 5,263,814 NOTES: a) See Notes 1 and 3 to the financial statements regarding determination of cost and fair values. All available for sale securities are carried at fair value on the balance sheet. Certain amounts may not total due to rounding of individual components. b) In the absence of market quotations, securities are valued by Ameriprise Certificate Company at fair value. c) Aggregate cost of investment in securities of unaffiliated issuers for federal income tax purposes was $5,401,013. d) Securities acquired in private negotiation which may require registration under federal securities law if they were to be publicly sold. Also see Note 3 to the financial statements. e) Non-income producing securities.
F-38 AMERIPRISE CERTIFICATE COMPANY SCHEDULE II INVESTMENTS IN AND ADVANCES TO AFFILIATES AND INCOME THEREON DECEMBER 31, 2005, 2004 AND 2003 ($ in thousands)
BALANCE DECEMBER 31, 2005 ----------------------------------------------------- INTEREST DIVIDENDS PRINCIPAL CARRYING CREDITED AMOUNT OR COST VALUE TO INCOME NAME OF ISSUER AND TITLE OF ISSUE NO. OF SHARES (a) (b) (c) - --------------------------------- --------------- ----------- ----------- ----------- Wholly Owned Subsidiary (b): Real Estate Investment Company: Investors Syndicate Development Corporation: Capital Stock..................................... 100 $0 $0 $0 =============== Investors Syndicate Development Corporation: Undistributed Net Income.......................... $0 0 =============== Other Affiliates (as defined in Sec. 2(a)(3) of the Investment Company Act of 1940)....................... $0 0 0 0 =============== ----------- ----------- ----------- TOTAL AFFILIATES.................................. $0 $0 $0 =========== =========== =========== BALANCE DECEMBER 31, 2004 ----------------------------------------------------- INTEREST DIVIDENDS PRINCIPAL CARRYING CREDITED AMOUNT OR COST VALUE TO INCOME NAME OF ISSUER AND TITLE OF ISSUE NO. OF SHARES (a) (b) (c) - --------------------------------- --------------- ----------- ----------- ----------- Wholly Owned Subsidiary (b): Real Estate Investment Company: Investors Syndicate Development Corporation: Capital Stock..................................... 100 ($41) ($41) $0 =============== Investors Syndicate Development Corporation: Undistributed Net Income.......................... $0 0 =============== Other Affiliates (as defined in Sec. 2(a)(3) of the Investment Company Act of 1940)....................... $0 0 0 0 =============== ----------- ----------- ----------- TOTAL AFFILIATES.................................. ($41) ($41) $0 =========== =========== =========== BALANCE DECEMBER 31, 2003 ----------------------------------------------------- INTEREST DIVIDENDS PRINCIPAL CARRYING CREDITED AMOUNT OR COST VALUE TO INCOME NAME OF ISSUER AND TITLE OF ISSUE NO. OF SHARES (a) (b) (c) - --------------------------------- --------------- ----------- ----------- ----------- Wholly Owned Subsidiary (b): Real Estate Investment Company: Investors Syndicate Development Corporation: Capital Stock..................................... 100 ($45) ($45) $0 =============== Other Controlled Companies: $0 4 4 0 =============== Other Affiliates (as defined in Sec. 2(a)(3) of the Investment Company Act of 1940)....................... $0 0 0 0 =============== ----------- ----------- ----------- TOTAL AFFILIATES.................................. ($41) ($41) $0 =========== =========== =========== NOTES: (a) The aggregate cost for federal income tax purposes was $0, ($41) and ($41) at December 31, 2005, 2004 and 2003, subject to possible adjustment in certain circumstances under consolidated income tax return regulations. (b) Investments in stocks of wholly owned subsidiaries are carried at cost adjusted for equity in undistributed net income since organization or acquisition of the subsidiaries. (c) There were no dividends or interest earned which were not credited to income.
F-39 AMERIPRISE CERTIFICATE COMPANY SCHEDULE III MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands)
PART 2 - INTEREST EARNED PART 1 - MORTGAGE LOANS ON REAL ESTATE AT END OF PERIOD ON MORTGAGES -------- ------------------------------------------------- ------------------------ AMOUNT OF PRINCIPAL UNPAID AT END OF PERIOD ------------------- AVERAGE INTEREST GROSS RATE SUBJECT AMOUNT DUE AND OF INTEREST CARRYING TO OF ACCRUED ON MORTGAGES NUMBER PRIOR AMOUNT OF DELINQUENT MORTGAGES AT END OF HELD AT END LOAN NO. & OF LIENS MORTGAGES (c), INTEREST BEING PERIOD OF PERIOD DESCRIPTION(a) PROPERTY LOCATION LOANS (b) (g),(h) AND (i) TOTAL (d) FORECLOSED (e) (f) - ------------------------------------------------------------------------ -------- ---------- ---------- --------- ------------ First mortgages: Insured by Federal Housing Administration - liens on: Residential - under $100 0 $0 $0 $0 $0 0.000% Apartment and business - under $100 0 0 0 0 0 0.000% ------ --------------- ----- ---------- ---------- ------------ Total 0 0 0 0 0 0.000% ------ --------------- ----- ---------- ---------- ------------ Partially guaranteed under Serviceman's Readjustment Act of 1944, as amended - liens on: Residential - under $100 0 0 0 0 0 0.000% Apartment and business - under $100 0 0 0 0 0 0.000% ------ --------------- ----- ---------- ---------- ------------ Total 0 0 0 0 0 0.000% ------ --------------- ----- ---------- ---------- ------------ Other - liens on: Residential 0 0 0 0 0 0.000% ------ --------------- ----- ---------- ---------- ------------ Apartment and business: Under $100 0 0 0 0 0 0.000% $100 to $150 0 0 0 0 0 0.000% $150 to $200 0 0 0 0 0 0.000% $200 to $250 0 0 0 0 0 0.000% $250 to $300 0 0 0 0 0 0.000% $300 to $350 0 0 0 0 0 0.000% $350 to $400 0 0 0 0 0 0.000% $400 to $450 0 0 0 0 0 0.000% $450 to $500 0 0 0 0 0 0.000% Over $500: 21-47139 EAGAN, MN 1 1,004 1,004 0 0 4.91000 21-47157 TAMPA, FL 1 2,259 2,259 0 0 7.65000 21-47167 RUSKIN, FL 1 5,064 5,064 0 0 7.44000 21-47168 RIVERVIEW, FL 1 2,714 2,714 0 0 7.44000 21-47173 FAIRFIELD, NJ 1 3,368 3,368 0 0 7.26000 21-47187 MEBANE, NC 1 2,429 2,429 0 0 7.22000 21-47195 PHARR, TX 1 1,767 1,767 0 0 3.80000 21-47196 PHARR, TX 1 3,955 3,955 0 0 3.80000 21-47197 ALAMO, TX 1 906 906 0 0 3.80000 21-47204 MARY ESTHER, FL 1 2,498 2,498 0 0 7.04000 21-47205 TUCSON, AZ 1 3,444 3,444 0 0 7.05000 21-47210 WEST HAVEN, CT 1 3,541 3,541 0 0 6.60000 21-47214 PLYMOUTH, MN 1 9,657 9,657 0 0 7.45000 21-47215 URBANDALE, IA 1 2,768 2,768 0 0 6.25000 21-47216 URBANDALE, IA 1 2,179 2,179 0 0 6.25000 21-47223 HOUSTON, TX 1 5,279 5,279 0 0 6.15000 21-47224 PLANO, TX 1 2,379 2,379 0 0 6.00000 21-47226 AUSTIN, TX 1 2,356 2,356 0 0 5.50000 21-47228 BRIDGEPORT, CT 1 3,674 3,674 0 0 7.14000 21-47230 HOUSTON,TX 1 1,924 1,924 0 0 5.11000 21-47232 MILWAUKEE, WI 1 3,279 3,279 0 0 7.40000 21-47233 JEFFERSON CITY, MO 1 1,729 1,729 0 0 7.15000 21-47234 LITTLETON, CO 1 2,843 2,843 0 0 7.18000 21-47235 SOUTHPORT,CT 1 2,375 2,375 0 0 7.02000 21-47237 ROANOKE, VA 1 1,195 1,195 0 0 5.25000 21-47238 CICERO, IN 1 2,991 2,991 0 0 7.00000 21-47240 BALTIMORE, MD 1 3,460 3,460 0 0 7.02000 21-47241 SIOUX FALLS, SD 1 839 839 0 0 7.05000 21-47243 CHESAPEAKE, VA 1 2,638 2,638 0 0 6.96000 21-47245 SOUTHPORT, CT 1 2,156 2,156 0 0 6.98000 21-47246 DALLAS, TX 1 818 818 0 0 7.01000 21-47249 VENTURA, CA 1 3,280 3,280 0 0 6.75000 21-47250 ALEXANDRIA, VA 1 2,405 2,405 0 0 6.90000 21-47251 PHOENIX, AZ 1 2,467 2,467 0 0 6.80000 21-47252 BROKEN ARROW, OK 1 2,943 2,943 0 0 6.80000 21-47253 PHOENIX, AZ 1 1,471 1,471 0 0 6.80000 21-47254 TULSA, OK 1 3,072 3,072 0 0 6.80000 21-47255 FOREST LAKE, MN 1 4,037 4,037 0 0 6.83000 21-47256 RAPID CITY, SD 1 806 806 0 0 6.75000 21-47259 SANTA CLARITA, CA 1 1,693 1,693 0 0 6.95000 21-47260 ANN ARBOR, MI 1 2,446 2,446 0 0 6.98000 21-47261 BLOOMINGTON, MN 1 945 945 0 0 7.06000 21-47262 FARGO, ND 1 5,080 5,080 0 0 6.90000 21-47264 OREM, UT 1 1,711 1,711 0 0 6.81000 21-47266 CLARKSTON, MI 1 3,524 3,524 0 0 6.89000 21-47267 CHARLOTTE, NC 1 1,177 1,177 0 0 6.91000 21-47268 SEBRING, FL 1 5,603 5,603 0 0 6.85000 21-47269 SPOKANE, WA 1 3,201 3,201 0 0 7.15000 21-47270 HOUSTON , TX 1 2,461 2,461 0 0 6.80000 21-47271 WILSONVILLE, OR 1 1,447 1,447 0 0 6.85000 21-47272 AURORA, CO 1 1,732 1,732 0 0 6.44000 21-47273 RAPID CITY, SD 1 661 661 0 0 6.85000 21-47277 TUCSON, AZ 1 1,985 1,985 0 0 7.00000 21-47278 KENNEWICK, WA 1 5,866 5,866 0 0 6.75000 21-47281 SHAKER HEIGHTS, OH 1 2,037 2,037 0 0 7.00000 21-47285 FORT MYERS, FL 1 3,326 3,326 0 0 6.75000 21-47286 LAS VEGAS, NV 1 2,281 2,281 0 0 7.00000 21-47287 ROGERS, MN 1 4,491 4,491 0 0 7.30000 21-47288 PLYMOUTH, MN 1 1,737 1,737 0 0 6.85000 21-47289 NEWPORT NEWS, VA 1 2,019 2,019 0 0 6.90000 21-47291 LIVERPOOL , NY 1 2,616 2,616 0 0 7.00000 21-47292 LAS VEGAS, NV 1 9,212 9,212 0 0 6.50000 F-40 AMERIPRISE CERTIFICATE COMPANY SCHEDULE III MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands) PART 2 - INTEREST EARNED PART 1 - MORTGAGE LOANS ON REAL ESTATE AT END OF PERIOD ON MORTGAGES -------- ------------------------------------------------- ------------------------ AMOUNT OF PRINCIPAL UNPAID AT END OF PERIOD ------------------- AVERAGE INTEREST GROSS RATE SUBJECT AMOUNT DUE AND OF INTEREST CARRYING TO OF ACCRUED ON MORTGAGES NUMBER PRIOR AMOUNT OF DELINQUENT MORTGAGES AT END OF HELD AT END LOAN NO. & OF LIENS MORTGAGES (c), INTEREST BEING PERIOD OF PERIOD DESCRIPTION(a) PROPERTY LOCATION LOANS (b) (g),(h) AND (i) TOTAL (d) FORECLOSED (e) (f) - ------------------------------------------------------------------------ ------- ---------- ---------- --------- ------------ 21-47293 CORVALLIS, OR 1 3,900 3,900 0 0 6.75000 21-47294 HOPE MILLS, NC 1 1,214 1,214 0 0 7.00000 21-47295 CONCORD, OH 1 951 951 0 0 7.00000 21-47297 CONCORD, OH 1 1,618 1,618 0 0 7.00000 21-47298 ROCK HILL, SC 1 684 684 0 0 7.25000 21-47299 ESCONDIDO, CA 1 2,012 2,012 0 0 7.00000 21-47303 SANTA MONICA, CA 1 6,024 6,024 0 0 5.54000 21-47304 HOUSTON, TX 1 6,613 6,613 0 0 4.75000 21-47306 FAIRVIEWPRK/CUYAHOGA, OH 1 4,071 4,071 0 0 6.46625 21-47308 CLEARWATER, FL 1 5,821 5,821 0 0 5.32000 21-47310 SACRAMENTO, CA 1 5,168 5,168 0 0 5.73375 21-47311 SACRAMENTO, CA 1 3,435 3,435 0 0 5.73375 21-47312 BOXBOROUGH, MA 1 7,406 7,406 0 0 5.86000 21-47317 OAK LAWN, IL 1 1,174 1,174 0 0 5.00000 21-47318 SILVERDALE, WA 1 4,145 4,145 0 0 4.41000 21-47319 PITTSBURGH,PA 1 2,490 2,490 0 0 5.04000 21-47320 KIRLAND, WA 1 3,147 3,147 0 0 4.66000 21-47321 CLINTON TOWNSHIP MI 1 6,652 6,652 0 0 3.81000 21-47322 COLLEYVILLE, TX 1 2,364 2,364 0 0 5.73375 21-47323 ALAMEDA , CA 1 5,919 5,919 0 0 5.54000 21-47336 BURR RIDG, IL 1 3,794 3,794 0 0 5.18000 21-87290 DORAVILLE, GA 1 2,661 2,661 0 0 5.77000 21-87313 ORCHARD PARK , NY 1 4,000 4,000 0 0 5.46000 21-87324 FALLS CHURCH, VA 1 2,250 2,250 0 0 4.79000 21-87325 AUSTIN, TX 1 3,842 3,842 0 0 4.85000 21-87327 MARIETTA, GA 1 2,429 2,429 0 0 4.80000 21-87328 CHARLOTTE, NC 1 3,201 3,201 0 0 4.99000 21-87329 OMAHA, NE 1 1,120 1,120 0 0 5.40000 21-87330 MERIDEN, CT 1 4,300 4,300 0 0 5.39000 21-87331 OMAHA, NE 1 4,046 4,046 0 0 5.34000 21-87332 DENVER, CO 1 5,090 5,090 0 0 4.80000 21-87333 BROKEN ARROW, OK 1 1,642 1,642 0 0 5.13000 21-87334 GLENDALE, AZ 1 5,939 5,939 0 0 4.96000 21-87335 BLUE ASH,OH 1 3,476 3,476 0 0 4.95000 21-87337 ISSAQUAH, WA 1 8,500 8,500 0 0 5.33000 Total Other 97 306,318 306,318 0 0 6.14 ------ -------- -------- ---------- ---------- ------------ Unallocated Reserve for Losses 3,036 -------- Total First Mortgage Loans on Real Estate 97 $303,282 $306,318 $0 $0 6.14% ====== ======== ======== ========== ========== ============
F-41 AMERIPRISE CERTIFICATE COMPANY SCHEDULE III MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands)
PART 3 - LOCATION OF MORTGAGED PROPERTIES Amount of principal - ----------------------------------------- unpaid at end of period ------------------------------ Carrying Subject amount of to Amount of State in Number Prior mortgages delinquent mortgages which mortgaged of liens (c), (g), interest being property is located loans (b) (h) and (i) Total (d) foreclosed - ----------------------- ---------- --------- --------------- ---------- -------------- -------------- Arizona 5 $ 15,305 $ 15,305 $0 $0 California 7 27,532 27,532 0 0 Colorado 3 9,664 9,664 0 0 Connecticut 5 16,045 16,045 0 0 Florida 7 27,286 27,286 0 0 Georgia 2 5,090 5,090 0 0 Iowa 2 4,946 4,946 0 0 Illinois 2 4,968 4,968 0 0 Indiana 1 2,991 2,991 0 0 Massachusetts 1 7,406 7,406 0 0 Maryland 1 3,460 3,460 0 0 Michigan 3 12,623 12,623 0 0 Minnesota 6 21,871 21,871 0 0 Missouri 1 1,729 1,729 0 0 Nevada 2 11,493 11,493 0 0 New Jersey 1 3,368 3,368 0 0 New York 2 6,616 6,616 0 0 North Carolina 5 8,973 8,973 0 0 North Dakota 1 5,080 5,080 0 0 Nebraska 2 5,166 5,166 0 0 Ohio 4 11,202 11,202 0 0 Oklahoma 3 7,657 7,657 0 0 Oregon 2 5,347 5,347 0 0 Pennsylvania 1 2,490 2,490 0 0 South Carolina 1 684 684 0 0 South Dakota 3 2,306 2,306 0 0 Texas 12 34,664 34,664 0 0 Utah 1 1,711 1,711 0 0 Virginia 5 10,507 10,507 0 0 Washington 5 24,859 24,859 0 0 Wisconsin 1 3,279 3,279 0 0 ---------- ------------- ---------- -------------- -------------- Total 97 306,318 306,318 0 0 ---------- ------------- ---------- -------------- -------------- Unallocated Reserve for Losses 3,036 ------------- Total 97 $303,282 $306,318 $0 $0 ========== ============= ========== ============== ============== NOTES: (a) The classification "residential" includes single dwellings only. Residential multiple dwellings are included in "apartment and business". (b) Real estate taxes and easements, which in the opinion of the Company are not undue burden on the properties, have been excluded from the determination of "prior liens". (c) In this schedule III, carrying amount of mortgage loans represents unpaid principal balances plus unamortized premiums less unamortized discounts and reserve for loss. (d) Interest in arrears for less than three months has been disregarded in computing the total amount of principal subject to delinquent interest. The amounts of mortgage loans being foreclosed are also included in amounts subject to delinquent interest. (e) Information as to interest due and accrued for the various classes within the types of mortgage loans is not readily available and the obtaining thereof would involve unreasonable effort and expense. The Company does not accrue interest on loans which are over three months delinquent. (f) Information as to interest income by type and class of loan has been omitted because it is not readily available and the obtaining thereof would involve unreasonable effort and expense. In lieu thereof, the average gross interest rates (exclusive of amortization of discounts and premiums) on mortgage loans held at December 31, 2005 are shown by type and class of loan.
F-42 AMERIPRISE CERTIFICATE COMPANY SCHEDULE III MORTGAGE LOANS ON REAL ESTATE AND INTEREST EARNED ON MORTGAGES YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 ($ in thousands) The average gross interest rates on mortgage loans held at December 31, 2005, 2004 and 2003 are summarized as follows:
2005 2004 2003 --------------- ---------------- ---------------- First mortgages: Insured by Federal Housing Administration 0.000% 0.000% 0.000% Partially guaranteed under Servicemen's Readjustment Act of 1944, as amended 0.000 0.000 0.000 Other 6.142 6.010 6.108 --------------- ---------------- ---------------- Combined average 6.142% 6.010% 6.108% =============== ================ ================ (g) Following is a reconciliation of the carrying amount of mortgage loans for the years ended December 31, 2005, 2004 and 2003: 2005 2004 2003 --------------- ---------------- ---------------- Balance at beginning of period $325,416 $330,953 $338,924 Additions during period: New loans acquired - nonaffiliated companies 25,768 34,507 43,030 Reserve for loss reversal, net of realized losses from sales 879 606 - --------------- ---------------- ---------------- Total additions 26,647 35,113 43,030 --------------- ---------------- ---------------- 352,063 366,066 381,954 --------------- ---------------- ---------------- Deductions during period: Collections of principal 48,781 40,650 47,688 Reserve for loss - - 3,313 --------------- ---------------- ---------------- Total deductions 48,781 40,650 51,001 --------------- ---------------- ---------------- Balance at end of period $303,282 $325,416 $330,953 =============== ================ ================ (h) The aggregate cost of mortgage loans for federal income tax purposes at December 31, 2005 was $306,318. (i) At December 31, 2005, an unallocated reserve for loss on first mortgage loans of $3,036 is recorded.
F-43 AMERIPRISE CERTIFICATE COMPANY SCHEDULE V QUALIFIED ASSETS ON DEPOSIT DECEMBER 31, 2005 ($ in thousands)
INVESTMENT SECURITIES ----------------------------- BONDS AND MORTGAGE NOTES STOCKS LOANS OTHER NAME OF DEPOSITORY (a) (b) (c) (d) TOTAL - ------------------------------------------ -------------- ----------- ------------ ----------- -------------- Deposits with states or their depositories to meet requirements of statutes and agreements: Illinois - Secretary of State of Illinois $52 $0 $0 $0 $52 New Jersey - Commissioner of Banking and Insurance of New Jersey 50 0 0 0 50 Pennsylvania - Treasurer of the State of Pennsylvania 150 0 0 0 150 Texas - Treasurer of the State of Texas 120 0 0 0 120 -------------- ----------- ------------ ----------- -------------- Total deposits with states or their depositories to meet requirements of statutes and agreements 372 0 0 0 372 Central depository - Ameriprise Trust Company 5,583,089 18,968 303,282 62,758 5,968,097 -------------- ----------- ------------ ----------- -------------- Total $5,583,461 $18,968 $303,282 $62,758 $5,968,469 ============== =========== ============ =========== ============== Notes: (a) Represents amortized cost of bonds and notes. (b) Represents average cost of individual issues of stocks. (c) Represents unpaid principal balance of mortgage loans less unamortized discounts and reserve for losses. (d) Represents cost of purchased call options and accounts payable purchased.
F-44 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 1 - SUMMARY OF CHANGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands)
Balance at beginning of period ---------------------------------- Number of Yield accounts Amount to maturity with of Amount on an annual security maturity of Description payment basis holders value reserves ----------- ------------- -------- --------- --------- Installment certificates: Reserves to mature: Series 15, includes extended maturities 15, " " " " 0 $ 0 $ 0 20, " " " " 0 0 0 15A, " " " " 0 0 0 22A, " " " " 3.09 208 5,270 4,787 I-76, " " " " 3.35 264 5,816 4,606 Reserve Plus Flex Payment 2 24 44 IC-Q-Installment 13 229 46 IC-Q-Ins 133 1,481 722 IC-Q-Ins Emp 2 23 18 IC-I 6,786 108,275 59,252 IC-I-Emp 51 888 861 Inst 10,541 0 44,400 Inst-E 67 0 261 RP-Q-Installment 26 343 184 RP-Q-Flexible Payment 4 45 40 RP-Q-Ins 3 24 3 RP-Q-Ins Emp 0 0 1 RP-I 19 360 238 RP-I-EMP 0 0 0 Inst-R & RP I95 291 26,098 1,081 Inst-R-E 5 860 16 -------- ---------- ---------- Total 18,415 149,736 116,560 -------- ---------- ---------- Payments made in advance of certificate year requirements and accrued interest thereon: 15, includes extended maturities 2.00 0 0 0 20, " " " 2.00 0 0 (1) 15A, " " " 3.00 0 0 1 22A, " " " 3.00 0 0 129 I-76, " " " 3.50 0 0 344 -------- ---------- ---------- Total 0 0 473 -------- ---------- ---------- Additional credits and accrued interest thereon: " 15, includes extended maturities 2.50 0 0 0 " 20, " " " 2.50 0 0 0 " 15A, " " " 3.00 0 0 0 " 22A, " " " 3.00 0 0 1,120 " I-76, " " " 3.50 0 0 1,090 " Res Plus Flex Pay 0 0 0 " IC-Q-Installment 0 0 (1) " IC-Q-Ins 0 0 0 " IC-Q-Ins Emp 0 0 0 " IC-I 0 0 64 " IC-I-Emp 0 0 1 " Inst 0 0 13 " Inst-E 0 0 0 " RP-Q-Installment 0 0 0 " RP-Q-Flexible Pay 0 0 0 " RP-Q-Ins 0 0 (1) " RP-Q-Ins Emp 0 0 0 " RP-I 0 0 0 " RP-I-EMP 0 0 0 " Inst-R 0 0 0 " Inst-R-E 0 0 0 -------- ---------- ---------- Total 0 0 2,286 -------- ---------- ---------- Res for accrued 3rd year 0 0 859 Res for accrued 6th year 0 0 0 Acc int - default I-76 3.5 0 0 1 Res for add'l credits to be allowed 0 0 0 Installment Cert-Special Add'l 0 0 0 Credits I-76 0 0 0 Accrued for add'l credits to 0 0 0 be allowed at next anniversary 0 0 22 Reserve for death & disability 0 0 0 Res for reconversion 0 0 1 -------- ---------- ---------- Total 0 0 883 -------- ---------- ---------- TOTAL INSTALLMENT CERTIFICATES 18,415 $ 149,736 $ 120,202 -------- ---------- ---------- Fully paid certificates: Single-Payment certificates: SP 74 3.50 0 $ 0 $ 0 SP 75 3.50 0 0 0 SP 76 3.50 0 0 0 SP 77 3.50 0 0 0 SP 78 3.50 0 0 0 SP 79 3.50 2 15 15 SP 80 3.50 0 0 2 SP 81A 3.50 1 10 10 SP 82A 3.50 2 22 22 SP 82B 3.50 3 20 29 SP 83A 3.50 0 0 (10) SP 83B 3.50 0 0 0 IC-2-84 3.50 113 1,302 1,298 IC-2-85 3.50 145 2,004 2,148 IC-2-86 3.50 90 1,372 1,102 IC-2-87 3.50 113 1,798 1,628 IC-2-88 3.50 221 3,236 3,153 Reserve Plus Single Payment 9 128 173 Cash Reserve Single Payment 0 0 0 IC-Flexible Savings (Variable Term) 136,212 1,922,458 2,022,923 IC-Flexible Savings Emp (VT) 483 6,716 8,806 IC-Preferred Investors 17 16,152 16,349 IC-Investors 587 1,209,080 1,236,934 IC-Special Deposits U.K. 26 36,405 38,445 IC-Special Deposits Hong Kong 0 0 0 IC-1-84 7 76 51 Cash Reserve Variable Payment 110 476 701 Cash Reserve Variable PMT-3mo. 29,481 119,970 124,118 IC-Future Value 201 1,612 1,612 IC-Future Value Emp 2 6 5 IC-Stock Market 84,759 520,219 575,482 IC-MSC 25,206 389,104 408,519 IC-EISC 31 1,494 1,503 IC-AEBI Stock Market 741 272,665 276,552 -------- ---------- ---------- Total 278,562 $4,506,340 $4,721,570 -------- ---------- ---------- Additions to Reserves Deductions from Reserves ------------------------------------ ------------------------------------ Charged Credited Charged Reserve to other Cash to other to profit payments by accounts surrenders accounts and loss certificate (per prior to (per Description or income holders part 2) Maturities maturity part 2) ----------- --------- ----------- -------- ---------- ---------- -------- Installment certificates: Reserves to mature: Series 15, includes extended maturities 15, " " " " $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 20, " " " " 0 0 0 0 0 0 15A, " " " " 0 0 0 0 0 0 22A, " " " " 113 37 32 474 360 1,117 I-76, " " " " 151 98 7 0 224 160 Reserve Plus Flex Payment 0 0 0 0 0 0 IC-Q-Installment 0 4 0 36 12 0 IC-Q-Ins 0 91 1 57 214 11 IC-Q-Ins Emp 0 1 0 0 0 0 IC-I 0 8,141 1,391 23,027 17,642 0 IC-I-Emp 0 294 28 116 222 0 Inst 0 19,641 462 0 15,624 0 Inst-E 0 133 4 0 123 0 RP-Q-Installment 0 0 0 52 41 16 RP-Q-Flexible Payment 0 0 0 0 11 0 RP-Q-Ins 0 0 0 0 0 0 RP-Q-Ins Emp 0 0 0 0 0 0 RP-I 0 16 4 146 62 0 RP-I-EMP 0 0 0 0 0 0 Inst-R & RP I95 0 534 5 0 195 0 Inst-R-E 0 3 0 0 0 0 --------- ----------- -------- ---------- ---------- -------- Total 264 28,993 1,934 23,908 34,730 1,304 --------- ----------- -------- ---------- ---------- -------- Payments made in advance of certificate year requirements and accrued interest thereon: 15, includes extended maturities 0 0 0 0 0 0 20, " " " 0 0 0 0 0 0 15A, " " " 0 0 0 0 0 0 22A, " " " 3 19 0 26 3 44 I-76, " " " 10 15 0 0 71 7 --------- ----------- -------- ---------- ---------- -------- Total 13 34 0 26 74 51 --------- ----------- -------- ---------- ---------- -------- Additional credits and accrued interest thereon: " 15, includes extended maturities 0 0 0 0 0 0 " 20, " " " 0 0 0 0 0 0 " 15A, " " " 0 0 0 0 0 0 " 22A, " " " 25 0 22 120 86 279 " I-76, " " " 36 0 18 0 49 42 " Res Plus Flex Pay 0 0 0 0 0 0 " IC-Q-Installment 0 0 0 0 0 0 " IC-Q-Ins 1 0 0 0 0 1 " IC-Q-Ins Emp 0 0 0 0 0 0 " IC-I 1,376 0 0 0 0 1,395 " IC-I-Emp 28 0 0 0 0 28 " Inst 478 0 0 0 0 461 " Inst-E 4 0 0 0 0 4 " RP-Q-Installment 0 0 0 0 0 0 " RP-Q-Flexible Pay 0 0 0 0 0 0 " RP-Q-Ins 0 0 0 0 0 0 " RP-Q-Ins Emp 0 0 0 0 0 0 " RP-I 4 0 0 0 0 4 " RP-I-EMP 0 0 0 0 0 0 " Inst-R 5 0 0 0 0 5 " Inst-R-E 0 0 0 0 0 0 --------- ----------- -------- ---------- ---------- -------- Total 1,957 0 40 120 135 2,219 --------- ----------- -------- ---------- ---------- -------- Res for accrued 3rd year 656 (634) 0 0 0 0 Res for accrued 6th year 0 0 0 0 0 0 Acc int - default I-76 3 0 0 0 0 3 Res for add'l credits to be allowed 0 0 0 0 0 0 Installment Cert-Special Add'l 0 0 0 0 0 0 Credits I-76 0 0 0 0 0 0 Accrued for add'l credits to 0 0 0 0 0 0 be allowed at next anniversary 34 0 0 0 0 40 Reserve for death & disability 0 0 0 0 0 0 Res for reconversion 0 0 0 0 0 0 --------- ----------- -------- ---------- ---------- -------- Total 693 (634) 0 0 0 43 --------- ----------- -------- ---------- ---------- -------- TOTAL INSTALLMENT CERTIFICATES $ 2,927 $ 28,393 $ 1,974 $ 24,054 $ 34,939 $ 3,617 --------- ----------- -------- ---------- ---------- -------- Fully paid certificates: Single-Payment certificates: SP 74 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 SP 75 0 0 0 0 0 0 SP 76 0 0 0 0 0 0 SP 77 0 0 0 0 0 0 SP 78 0 0 0 0 0 0 SP 79 0 0 0 0 0 0 SP 80 0 0 0 0 0 0 SP 81A 0 0 0 0 0 0 SP 82A 0 0 0 0 0 0 SP 82B 0 0 0 10 0 0 SP 83A 0 0 0 0 0 0 SP 83B 0 0 0 0 0 0 IC-2-84 5 0 0 864 29 389 IC-2-85 0 0 68 1,192 287 340 IC-2-86 0 0 37 0 129 0 IC-2-87 0 0 55 0 126 0 IC-2-88 0 0 108 0 201 0 Reserve Plus Single Payment 0 0 3 0 15 0 Cash Reserve Single Payment 0 0 0 0 0 0 IC-Flexible Savings (Variable Term) 0 1,449,469 73,570 624 1,067,367 0 IC-Flexible Savings Emp (VT) 0 89 218 0 1,471 0 IC-Preferred Investors 0 40,221 625 0 39,004 0 IC-Investors 0 622,502 30,251 0 1,302,464 0 IC-Special Deposits U.K. 0 17,445 940 0 42,519 0 IC-Special Deposits Hong Kong 0 0 0 0 0 0 IC-1-84 0 0 1 10 33 6 Cash Reserve Variable Payment 0 20 2 586 139 0 Cash Reserve Variable PMT-3mo. 0 391,176 4,004 24 232,623 0 IC-Future Value 0 0 0 1,157 206 0 IC-Future Value Emp 0 0 0 3 0 0 IC-Stock Market 0 73,192 20,888 502 208,434 0 IC-MSC 0 75,848 13,811 0 90,135 0 IC-EISC 0 254 73 0 1,825 0 IC-AEBI Stock Market 0 33,309 9,538 0 194,247 0 --------- ----------- -------- ---------- ---------- -------- Total $ 5 $ 2,703,525 $154,192 $ 4,972 $3,181,254 $ 735 --------- ----------- -------- ---------- ---------- -------- Balance at close of period ---------------------------------- Number of accounts Amount with of Amount security maturity of Description holders value reserves ----------- -------- --------- --------- Installment certificates: Reserves to mature: Series 15, includes extended maturities 15, " " " " 0 $ 0 $ 0 20, " " " " 0 0 0 15A, " " " " 0 0 0 22A, " " " " 127 3,266 3,018 I-76, " " " " 240 5,330 4,478 Reserve Plus Flex Payment 2 24 44 IC-Q-Installment 1 24 2 IC-Q-Ins 98 1,129 532 IC-Q-Ins Emp 2 23 19 IC-I 3,220 49,126 28,115 IC-I-Emp 25 520 845 Inst 10,126 0 48,879 Inst-E 63 0 275 RP-Q-Installment 11 111 75 RP-Q-Flexible Payment 3 39 29 RP-Q-Ins 3 24 3 RP-Q-Ins Emp 0 0 1 RP-I 10 94 50 RP-I-EMP 0 0 0 Inst-R & RP I95 314 35,167 1,425 Inst-R-E 6 872 19 -------- ---------- ---------- Total 14,251 95,749 87,809 -------- ---------- ---------- Payments made in advance of certificate year requirements and accrued interest thereon: 15, includes extended maturities 0 0 0 20, " " " 0 0 (1) 15A, " " " 0 0 1 22A, " " " 0 0 78 I-76, " " " 0 0 291 -------- ---------- ---------- Total 0 0 369 -------- ---------- ---------- Additional credits and accrued interest thereon: " 15, includes extended maturities 0 0 0 " 20, " " " 0 0 0 " 15A, " " " 0 0 0 " 22A, " " " 0 0 682 " I-76, " " " 0 0 1,053 " Res Plus Flex Pay 0 0 0 " IC-Q-Installment 0 0 (1) " IC-Q-Ins 0 0 0 " IC-Q-Ins Emp 0 0 0 " IC-I 0 0 45 " IC-I-Emp 0 0 1 " Inst 0 0 30 " Inst-E 0 0 0 " RP-Q-Installment 0 0 0 " RP-Q-Flexible Pay 0 0 0 " RP-Q-Ins 0 0 (1) " RP-Q-Ins Emp 0 0 0 " RP-I 0 0 0 " RP-I-EMP 0 0 0 " Inst-R 0 0 0 " Inst-R-E 0 0 0 -------- ---------- ---------- Total 0 0 1,809 -------- ---------- ---------- Res for accrued 3rd year 0 0 881 Res for accrued 6th year 0 0 0 Acc int - default I-76 0 0 1 Res for add'l credits to be allowed 0 0 0 Installment Cert-Special Add'l 0 0 0 Credits I-76 0 0 0 Accrued for add'l credits to 0 0 0 be allowed at next anniversary 0 0 16 Reserve for death & disability 0 0 0 Res for reconversion 0 0 1 -------- ---------- ---------- Total 0 0 899 -------- ---------- ---------- TOTAL INSTALLMENT CERTIFICATES 14,251 $ 95,749 $ 90,886 -------- ---------- ---------- Fully paid certificates: Single-Payment certificates: SP 74 0 $ 0 $ 0 SP 75 0 0 0 SP 76 0 0 0 SP 77 0 0 0 SP 78 0 15 0 SP 79 2 0 15 SP 80 0 10 2 SP 81A 1 22 10 SP 82A 2 10 22 SP 82B 2 0 19 SP 83A 0 0 (10) SP 83B 0 0 0 IC-2-84 6 20 21 IC-2-85 36 660 397 IC-2-86 81 1,055 1,010 IC-2-87 106 1,691 1,557 IC-2-88 203 3,043 3,060 Reserve Plus Single Payment 7 122 161 Cash Reserve Single Payment 0 0 0 IC-Flexible Savings (Variable Term) 163,484 2,351,761 2,477,971 IC-Flexible Savings Emp (VT) 422 5,720 7,642 IC-Preferred Investors 17 17,856 18,191 IC-Investors 264 562,962 587,223 IC-Special Deposits U.K. 11 12,786 14,311 IC-Special Deposits Hong Kong 0 0 0 IC-1-84 1 1 3 Cash Reserve Variable Payment 0 0 (2) Cash Reserve Variable PMT-3mo. 34,229 280,852 286,651 IC-Future Value 31 248 249 IC-Future Value Emp 1 3 2 IC-Stock Market 71,240 404,486 460,626 IC-MSC 25,154 383,497 408,043 IC-EISC 3 5 5 IC-AEBI Stock Market 390 122,495 125,152 -------- ---------- ---------- Total 295,693 $4,149,320 $4,392,331 -------- ---------- ---------- F-45 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 1 - SUMMARY OF CHANGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Balance at beginning of period ---------------------------------- Number of Yield accounts Amount to maturity with of Amount on an annual security maturity of Description payment basis holders value reserves ----------- ------------- -------- --------- --------- Additional credits and accrued interest thereon: SP 74 3.50 0 $ 0 $ 0 SP 75 3.50 0 0 0 SP 76 3.50 0 0 0 SP 77 3.50 0 0 0 SP 78 3.50 0 0 0 SP 79 3.50 0 0 15 SP 80 3.50 0 0 1 SP 81A 3.50 0 0 9 SP 82A 3.50 0 0 19 SP 82B 3.50 0 0 16 SP 83A 3.50 0 0 0 SP 83B 3.50 0 0 1 IC-2-84 3.50 0 0 677 IC-2-85 3.50 0 0 30 IC-2-86 3.50 0 0 18 IC-2-87 3.50 0 0 29 IC-2-88 3.50 0 0 59 Reserve Plus SP 0 0 0 Cash Reserve SP 0 0 0 IC-Flexible Savings 0 0 2,205 IC-Preferred Investors 0 0 9 IC-FS-EMP 0 0 10 IC-Investors 0 0 1,085 IC-Special Deposits U.K. 0 0 30 IC-Special Deposits Hong Kong 0 0 0 IC-1-84 0 0 2 Cash Reserve VP 0 0 0 Cash Reserve Variable Payment-3mo. 0 0 250 IC-Future Value 0 0 1,465 IC-Future Value Emp 0 0 4 IC-Stk Mkt 0 0 552 IC-MSC 0 0 171 IC - EISC 0 0 0 IC-AEBI Stk Mkt 0 0 352 -------- ---------- ---------- Total 0 0 7,009 -------- ---------- ---------- Accrued for additional credits to be allowed at next anniversaries: SP 74 0 0 0 SP 75 0 0 0 SP 76 0 0 0 SP 77 0 0 0 SP 78 0 0 0 SP 79 0 0 0 SP 80 0 0 0 SP 81A 0 0 (1) SP 82A 0 0 0 SP 82B 0 0 1 SP 83A 0 0 0 SP 83B 0 0 (1) IC-2-84 0 0 1 IC-2-85 0 0 (1) IC-2-86 0 0 1 IC-2-87 0 0 0 IC-2-88 0 0 (1) IC-Stock Mkt 0 0 21,426 IC-Market Strategy Certificate 0 0 12,796 IC-EISC 0 0 68 IC-AEBI Stock Market 0 0 10,394 -------- ---------- ---------- Total 0 0 44,683 -------- ---------- ---------- TOTAL SINGLE PAYMENT - NON QUALIFIED 278,562 $4,506,340 $4,773,262 -------- ---------- ---------- R Series Single-Payment certificates: R-76 3.50 3 $ 10 $ 11 R-77 3.50 13 257 201 R-78 3.50 27 180 180 R-79 3.50 44 501 455 R-80 3.50 30 240 222 R-81 3.50 12 112 91 R-82A 3.50 92 621 456 RP-Q 152 217 571 R-II 3.50 60 491 275 RP-2-84 3.50 109 1,152 557 RP-2-85 3.50 58 219 294 RP-2-86 3.50 17 63 76 RP-2-87 3.50 35 638 252 RP-2-88 3.50 38 173 180 Cash Reserve RP 4 14 30 RP-Flexible Savings 35,035 541,885 575,857 RP-Preferred Investors 2 1,906 1,975 Cash Reserve RP-3 mo. 1,947 14,251 14,704 RP-Flexible Savings Emp 173 2,099 2,951 RP-Future Value 204 3,881 3,881 RP-Future Value Emp 9 155 156 RP-Stock Market 14,104 147,093 159,890 Market Strategy Cert 3,935 94,386 99,480 D-1 113 9,985 12,447 -------- ---------- ---------- Total 56,216 820,526 875,192 -------- ---------- ---------- Additional Interest on R-Series Single Payment Reserves: R-76 3.50 0 0 0 R-77 3.50 0 0 1 R-78 3.50 0 0 4 R-79 3.50 0 0 7 R-80 3.50 0 0 5 R-81 3.50 0 0 0 R-82A 3.50 0 0 13 RP-Q 0 0 0 R-II 3.50 0 0 5 RP-2-84 3.50 0 0 16 RP-2-85 3.50 0 0 6 RP-2-86 3.50 0 0 2 RP-2-87 3.50 0 0 6 RP-2-88 3.50 0 0 4 Cash Reserve RP 0 0 0 RP-Flexible Savings 0 0 651 RP-Preferred Investors 0 0 3 Cash Reserve RP-3 mo. Plus 0 0 28 RP-Flexible Savings Emp 0 0 4 RP-Future Value 0 0 3,659 RP-Future Value Emp 0 0 150 RP-Stock Market 0 0 146 Market Strategy Cert 0 0 49 D-1 1 -------- ---------- ---------- Total 0 0 4,760 -------- ---------- ---------- Additions to Reserves Deductions from Reserves ------------------------------------ ------------------------------------ Charged Credited Charged Reserve to other Cash to other to profit payments by accounts surrenders accounts and loss certificate (per prior to (per Description or income holders part 2) Maturities maturity part 2) ----------- --------- ----------- -------- ---------- ---------- -------- Additional credits and accrued interest thereon: SP 74 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 SP 75 0 0 0 0 0 0 SP 76 0 0 0 0 0 0 SP 77 0 0 0 0 0 0 SP 78 0 0 0 0 0 0 SP 79 0 0 0 0 0 0 SP 80 0 0 0 0 0 0 SP 81A 0 0 0 0 0 0 SP 82A 0 0 0 0 0 0 SP 82B 0 0 0 8 0 0 SP 83A 0 0 0 0 0 0 SP 83B 0 0 0 0 0 0 IC-2-84 3 0 0 446 16 205 IC-2-85 49 0 0 0 5 67 IC-2-86 35 0 0 0 2 37 IC-2-87 56 0 0 0 2 55 IC-2-88 109 0 0 0 2 107 Reserve Plus SP 3 0 0 0 0 3 Cash Reserve SP 0 0 0 0 0 0 IC-Flexible Savings 79,514 1 0 0 4,466 73,622 IC-Preferred Investors 675 0 0 0 31 627 IC-FS-EMP 256 0 0 0 37 218 IC-Investors 37,034 0 0 0 6,954 30,251 IC-Special Deposits U.K. 937 0 0 0 2 942 IC-Special Deposits Hong Kong 0 0 0 0 0 0 IC-1-84 0 0 0 0 1 0 Cash Reserve VP 2 0 0 0 0 2 Cash Reserve Variable Payment-3mo. 4,824 (304) 0 0 42 4,007 IC-Future Value 59 0 0 1,139 202 0 IC-Future Value Emp 0 0 0 2 0 0 IC-Stk Mkt 996 0 0 0 95 795 IC-MSC 1,572 4 0 0 0 1,557 IC - EISC 0 0 0 0 0 0 IC-AEBI Stk Mkt 601 0 0 0 106 673 --------- ----------- -------- ---------- ---------- -------- Total 126,725 (299) 0 1,595 11,963 113,168 --------- ----------- -------- ---------- ---------- -------- Accrued for additional credits to be allowed at next anniversaries: SP 74 0 0 0 0 0 0 SP 75 0 0 0 0 0 0 SP 76 0 0 0 0 0 0 SP 77 0 0 0 0 0 0 SP 78 0 0 0 0 0 0 SP 79 0 0 0 0 0 0 SP 80 0 0 0 0 0 0 SP 81A 0 0 0 0 0 0 SP 82A 0 0 0 0 0 0 SP 82B 0 0 0 0 0 0 SP 83A 0 0 0 0 0 0 SP 83B 0 0 0 0 0 0 IC-2-84 0 0 0 0 0 0 IC-2-85 0 0 0 0 0 0 IC-2-86 0 0 0 0 0 0 IC-2-87 0 0 0 0 0 0 IC-2-88 0 0 0 0 0 0 IC-Stock Mkt 11,372 0 0 0 451 20,114 IC-Market Strategy Certificate 9,287 0 0 0 298 12,268 IC-EISC 5 0 0 0 0 73 IC-AEBI Stock Market 4,499 0 0 0 2,057 8,866 --------- ----------- -------- ---------- ---------- -------- Total 25,163 0 0 0 2,806 41,321 --------- ----------- -------- ---------- ---------- -------- TOTAL SINGLE PAYMENT - NON QUALIFIED $ 151,893 $ 2,703,226 $154,192 $ 6,567 $3,196,023 $155,224 --------- ----------- -------- ---------- ---------- -------- R Series Single-Payment certificates: R-76 $ 0 $ 0 $ 0 $ 0 $ 2 $ 0 R-77 0 0 7 0 6 0 R-78 0 0 6 0 13 0 R-79 0 0 15 0 35 0 R-80 0 0 8 0 8 0 R-81 0 0 3 0 32 0 R-82A 0 0 16 0 22 0 RP-Q 0 0 10 0 81 0 R-II 0 0 9 0 61 0 RP-2-84 0 0 19 410 94 56 RP-2-85 0 0 10 151 41 0 RP-2-86 0 0 3 0 3 0 RP-2-87 0 0 9 0 12 0 RP-2-88 0 0 6 0 43 0 Cash Reserve RP 0 0 0 20 10 0 RP-Flexible Savings 0 400,489 21,310 293 227,540 0 RP-Preferred Investors 0 972 46 0 1,495 0 Cash Reserve RP-3 mo. 0 63,575 503 0 42,575 0 RP-Flexible Savings Emp 0 36 85 0 483 0 RP-Future Value 0 0 0 2,875 621 0 RP-Future Value Emp 0 0 0 91 6 0 RP-Stock Market 0 26,997 5,889 307 52,022 0 Market Strategy Cert 0 19,973 3,391 0 19,038 0 D-1 0 101 256 0 5,752 0 --------- ----------- -------- ---------- ---------- -------- Total 0 512,143 31,601 4,147 349,995 56 --------- ----------- -------- ---------- ---------- -------- Additional Interest on R-Series Single Payment Reserves: R-76 0 0 0 0 0 0 R-77 7 0 0 0 0 7 R-78 6 0 0 0 0 6 R-79 15 0 0 0 0 15 R-80 8 0 0 0 0 8 R-81 3 0 0 0 0 3 R-82A 16 0 0 0 0 16 RP-Q 10 0 0 0 0 10 R-II 9 0 0 0 1 9 RP-2-84 3 0 0 0 0 19 RP-2-85 7 0 0 0 0 10 RP-2-86 2 0 0 0 0 3 RP-2-87 9 0 0 0 0 9 RP-2-88 6 0 0 0 0 6 Cash Reserve RP 0 0 0 0 0 0 RP-Flexible Savings 22,547 0 0 0 768 21,311 RP-Preferred Investors 46 0 0 0 0 46 Cash Reserve RP-3 mo. Plus 591 (33) 0 0 2 503 RP-Flexible Savings Emp 89 0 0 0 3 85 RP-Future Value 139 0 0 2,884 562 0 RP-Future Value Emp 9 0 0 108 6 0 RP-Stock Market 293 0 0 0 22 228 Market Strategy Cert 383 0 0 0 1 381 D-1 289 0 0 0 31 256 --------- ----------- -------- ---------- ---------- -------- Total 24,487 (33) 0 2,992 1,396 22,931 --------- ----------- -------- ---------- ---------- -------- Balance at close of period ---------------------------------- Number of accounts Amount with of Amount security maturity of Description holders value reserves ----------- -------- ---------- ---------- Additional credits and accrued interest thereon: SP 74 0 $ 0 $ 0 SP 75 0 0 0 SP 76 0 0 0 SP 77 0 0 0 SP 78 0 0 0 SP 79 0 0 15 SP 80 0 0 1 SP 81A 0 0 9 SP 82A 0 0 19 SP 82B 0 0 8 SP 83A 0 0 0 SP 83B 0 0 1 IC-2-84 0 0 13 IC-2-85 0 0 7 IC-2-86 0 0 14 IC-2-87 0 0 28 IC-2-88 0 0 59 Reserve Plus SP 0 0 0 Cash Reserve SP 0 0 0 IC-Flexible Savings 0 0 3,632 IC-Preferred Investors 0 0 26 IC-FS-EMP 0 0 11 IC-Investors 0 0 914 IC-Special Deposits U.K. 0 0 23 IC-Special Deposits Hong Kong 0 0 0 IC-1-84 0 0 1 Cash Reserve VP 0 0 0 Cash Reserve Variable Payment-3mo. 0 0 721 IC-Future Value 0 0 183 IC-Future Value Emp 0 0 2 IC-Stk Mkt 0 0 658 IC-MSC 0 0 190 IC - EISC 0 0 0 IC-AEBI Stk Mkt 0 0 174 -------- ---------- ---------- Total 0 0 6,709 -------- ---------- ---------- Accrued for additional credits to be allowed at next anniversaries: SP 74 0 0 0 SP 75 0 0 0 SP 76 0 0 0 SP 77 0 0 0 SP 78 0 0 0 SP 79 0 0 0 SP 80 0 0 0 SP 81A 0 0 (1) SP 82A 0 0 0 SP 82B 0 0 1 SP 83A 0 0 0 SP 83B 0 0 (1) IC-2-84 0 0 1 IC-2-85 0 0 (1) IC-2-86 0 0 1 IC-2-87 0 0 0 IC-2-88 0 0 (1) IC-Stock Mkt 0 0 12,233 IC-Market Strategy Certificate 0 0 9,517 IC-EISC 0 0 0 IC-AEBI Stock Market 0 0 3,970 -------- ---------- ---------- Total 0 0 25,719 -------- ---------- ---------- TOTAL SINGLE PAYMENT - NON QUALIFIED 295,693 $4,149,320 $4,424,759 -------- ---------- ---------- R Series Single-Payment certificates: R-76 2 $ 8 $ 9 R-77 13 220 202 R-78 24 166 173 R-79 42 467 435 R-80 30 232 222 R-81 11 75 62 R-82A 88 592 450 RP-Q 131 188 500 R-II 47 384 223 RP-2-84 3 160 16 RP-2-85 27 84 112 RP-2-86 16 61 76 RP-2-87 34 273 249 RP-2-88 32 134 143 Cash Reserve RP 0 0 0 RP-Flexible Savings 44,787 729,833 769,823 RP-Preferred Investors 2 1,402 1,498 Cash Reserve RP-3 mo. 3,622 35,597 36,207 RP-Flexible Savings Emp 157 1,840 2,589 RP-Future Value 25 385 385 RP-Future Value Emp 2 59 59 RP-Stock Market 12,712 127,086 140,447 Market Strategy Cert 3,973 97,852 103,806 D-1 99 5,695 7,052 -------- ---------- ---------- Total 65,879 1,002,793 1,064,738 -------- ---------- ---------- Additional Interest on R-Series Single Payment Reserves: R-76 0 0 0 R-77 0 0 1 R-78 0 0 4 R-79 0 0 7 R-80 0 0 5 R-81 0 0 0 R-82A 0 0 13 RP-Q 0 0 0 R-II 0 0 4 RP-2-84 0 0 0 RP-2-85 0 0 3 RP-2-86 0 0 1 RP-2-87 0 0 6 RP-2-88 0 0 4 Cash Reserve RP 0 0 0 RP-Flexible Savings 0 0 1,119 RP-Preferred Investors 0 0 3 Cash Reserve RP-3 mo. Plus 0 0 81 RP-Flexible Savings Emp 0 0 5 RP-Future Value 0 0 352 RP-Future Value Emp 0 0 45 RP-Stock Market 0 0 189 Market Strategy Cert 0 0 50 D-1 0 0 3 -------- --------- --------- Total 0 0 1,895 -------- --------- ---------
F-46
AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 1 - SUMMARY OF CHANGES YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Balance at beginning of period ---------------------------------- Number of Yield accounts Amount to maturity with of Amount on an annual security maturity of Description payment basis holders value reserves ----------- ------------- -------- --------- --------- Accrued for additional credits to be allowed at next anniversaries: RP-Stock Market 0 6,810 Market Strategy Cert 0 0 3,170 -------- ---------- ---------- Total 0 0 9,980 -------- ---------- ---------- TOTAL SINGLE PAYMENT - QUALIFIED 56,216 $ 820,529 $ 889,932 -------- ---------- ---------- Paid-up certificates: Series 15 and 20 3.25 2 $ 9 $ 10 " 15A and 22A 3.50 95 2,208 2,061 " I-76 3.50 448 2,440 2,043 -------- ---------- ---------- Total 545 4,657 4,114 -------- ---------- ---------- Additional credits and accrued interest thereon: Series 15 and 20 2.50 0 0 1 " 15A and 22A 3.00 0 0 43 " I-76 3.50 0 0 179 -------- ---------- ---------- Total 0 0 223 -------- ---------- ---------- Accrued for additional credits to be allowed at next anniversaries 0 0 0 -------- ---------- ---------- Total paid-up 545 $ 4,657 $ 4,337 -------- ---------- ---------- Optional settlement certificates: Series IST&G 3.00 1 $ 0 $ 0 Other series and conversions from Single 3,933 0 0 Payment certificates 2.50 - 3.50 0 0 65,296 Series R-76 thru R-82A 3.00 0 0 19 Series R-II & RP-2-84 thru 88 3.50 0 0 172 Reserve Plus Single-Payment 32 0 250 Reserve Plus Flex-Pay & IC-Q-Inst 10 0 57 Series R-Installment 13 0 69 Series R-Single-Payment 4 0 0 Add'l credits and accrued int. thereon 2.50-3.00 0 0 6,903 Add'l credits and accrued int. thereon-IST&G 2.50-3.00 0 0 0 Accrued for additional credits to be allowed 0 0 0 at next anniversaries 0 0 4 Accrued for additional credits to be allowed 0 0 0 at next anniversaries-R-76-R-82A & R-II 0 0 (1) Accrued for additional credits to be allowed 0 0 0 at next anniversaries-IST&G 0 0 0 -------- ---------- ---------- TOTAL OPTIONAL SETTLEMENT 3,993 $ 0 $ 72,769 -------- ---------- ---------- Due to unlocated cert holders 0 0 46 -------- ---------- ---------- TOTAL CERTIFICATE RESERVES 357,731 $5,481,259 $5,860,548 Additions to Reserves Deductions from Reserves ------------------------------------ ------------------------------------ Charged Credited Charged Reserve to other Cash to other to profit payments by accounts surrenders accounts and loss certificate (per prior to (per Description or income holders part 2) Maturities maturity part 2) ----------- --------- ----------- -------- ---------- ---------- -------- Accrued for additional credits to be allowed at next anniversaries: RP-Stock Market 3,570 0 0 0 834 5,660 Market Strategy Cert 2,290 0 0 0 123 3,009 --------- ----------- -------- ---------- ---------- -------- Total 5,860 0 0 0 957 8,669 --------- ----------- -------- ---------- ---------- -------- TOTAL SINGLE PAYMENT - QUALIFIED $ 30,347 $ 512,110 $ 31,601 $ 7,139 $ 352,348 $ 31,656 --------- ----------- -------- ---------- ---------- -------- Paid-up certificates: Series 15 and 20 $ 0 $ 0 $ 0 $ 9 $ 0 $ 0 " 15A and 22A 59 0 244 185 153 479 " I-76 75 0 206 0 101 0 --------- ----------- -------- ---------- ---------- -------- Total 134 0 450 194 254 479 --------- ----------- -------- ---------- ---------- -------- Additional credits and accrued interest thereon: Series 15 and 20 0 0 0 1 0 0 " 15A and 22A 1 0 0 6 3 10 " I-76 6 0 0 0 7 0 --------- ----------- -------- ---------- ---------- -------- Total 7 0 0 7 10 10 --------- ----------- -------- ---------- ---------- -------- Accrued for additional credits to be allowed at next anniversaries 0 0 0 0 0 0 --------- ----------- -------- ---------- ---------- -------- Total paid-up $ 141 $ 0 $ 450 $ 201 $ 264 $ 489 --------- ----------- -------- ---------- ---------- -------- Optional settlement certificates: Series IST&G $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Other series and conversions from Single 0 0 0 0 0 0 Payment certificates 1,971 0 2,811 4,023 4,387 0 Series R-76 thru R-82A 0 0 0 4 5 0 Series R-II & RP-2-84 thru 88 3 0 56 5 155 0 Reserve Plus Single-Payment 4 0 0 5 77 0 Reserve Plus Flex-Pay & IC-Q-Inst 0 0 11 1 16 0 Series R-Installment 0 0 16 12 15 0 Series R-Single-Payment 0 0 0 0 0 0 Add'l credits and accrued int. thereon 187 0 6 371 468 221 Add'l credits and accrued int. thereon-IST&G 0 0 0 0 0 0 Accrued for additional credits to be allowed 0 0 0 0 0 0 at next anniversaries 6 0 0 0 0 6 Accrued for additional credits to be allowed 0 0 0 0 0 0 at next anniversaries-R-76-R-82A & R-II 0 0 0 0 0 0 Accrued for additional credits to be allowed 0 0 0 0 0 0 at next anniversaries-IST&G 0 0 0 0 0 0 --------- ----------- -------- ---------- ---------- -------- TOTAL OPTIONAL SETTLEMENT $ 2,171 $ 0 $ 2,900 $ 4,421 $ 5,123 $ 227 --------- ----------- -------- ---------- ---------- -------- Due to unlocated cert holders 0 0 37 0 1 51 --------- ----------- -------- ---------- ---------- -------- TOTAL CERTIFICATE RESERVES $ 187,479 $ 3,243,729 $191,154 $ 42,382 $3,588,698 $191,264 Balance at close of period ---------------------------------- Number of accounts Amount with of Amount security maturity of Description holders value reserves ----------- -------- ---------- ---------- Accrued for additional credits to be allowed at next anniversaries: RP-Stock Market 0 0 3,886 Market Strategy Cert 0 0 2,328 -------- ---------- ---------- Total 0 0 6,214 -------- ---------- ---------- TOTAL SINGLE PAYMENT - QUALIFIED 65,879 $1,002,793 $1,072,847 -------- ---------- ---------- Paid-up certificates: Series 15 and 20 0 $ 0 $ 1 " 15A and 22A 74 1,641 1,547 " I-76 440 2,563 2,223 -------- ---------- ---------- Total 514 4,204 3,771 -------- ---------- ---------- Additional credits and accrued interest thereon: Series 15 and 20 0 0 0 " 15A and 22A 0 0 25 " I-76 0 0 178 -------- ---------- ---------- Total 0 0 203 -------- ---------- ---------- Accrued for additional credits to be allowed at next anniversaries 0 0 0 -------- ---------- ---------- Total paid-up 514 $ 4,204 $ 3,974 -------- ---------- ---------- Optional settlement certificates: Series IST&G 1 $ 0 $ 0 Other series and conversions from Single 3,510 0 0 Payment certificates 0 0 61,668 Series R-76 thru R-82A 0 0 10 Series R-II & RP-2-84 thru 88 0 0 71 Reserve Plus Single-Payment 25 0 172 Reserve Plus Flex-Pay & IC-Q-Inst 8 0 51 Series R-Installment 10 0 58 Series R-Single-Payment 4 0 0 Add'l credits and accrued int. thereon 0 0 6,036 Add'l credits and accrued int. thereon-IST&G 0 0 0 Accrued for additional credits to be allowed 0 0 0 at next anniversaries 0 0 4 Accrued for additional credits to be allowed 0 0 0 at next anniversaries-R-76-R-82A & R-II 0 0 (1) Accrued for additional credits to be allowed 0 0 0 at next anniversaries-IST&G 0 0 0 -------- ---------- ---------- TOTAL OPTIONAL SETTLEMENT 3,558 $ 0 $ 68,069 -------- ---------- ---------- Due to unlocated cert holders 0 0 31 -------- ---------- ---------- TOTAL CERTIFICATE RESERVES 379,895 $5,252,066 $5,660,566
F-47 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 2 - DESCRIPTIONS OF ADDITIONS TO RESERVES CHARGED TO OTHER ACCOUNTS AND DEDUCTIONS FROM RESERVES CREDITED TO OTHER ACCOUNTS DECEMBER 31, 2005 ($ in thousands) Additional credits on installment certificates and accrued interest thereon: Other additions represent: Transfers from accruals for additional credits to be allowed at next anniversaries $ 39 Reconversions of paid-up certificates-charged to paid-up reserves 39 Transfers from maturities to extended maturities, additional credits/interest and advance payments 1,896 ---------------- $ 1,974 ================ Other deductions represent: Transfers to reserves on a quarterly basis for Reserve Plus Flexible- Payment, IC-Q-Installment and R-Flexible-Payment $ 1,900 Conversions to optional settlement certificates-credited to optional settlement reserves 1,180 Conversions to paid-up certificates-credited to paid-up reserves 459 Transfers to extended maturities at maturity 0 ---------------- $ 3,539 ================ Accrual for additional credits to be allowed on installment certificates at next anniversaries: Other deductions represent: Transfers to reserves for additional credits on installment certificates $ 39 ================ Reserve for death and disability refund options: Other deductions represent: Payments, in excess of installment reserves, made to certificate holders who exercised the death and disability refund options. $ 0 ================ Reserve for reconversions of paid-up certificates: The amount shown as charged to profit and loss has been deducted from reserve recoveries in the accompanying Statement of Operations $ 0 ================ Other deductions represent: Amounts credited to installment certificate reserves to mature, on reconversions of paid-up certificates. $ 39 ================ Paid-up certificates: Other additions represent: Conversions from installment certificates (charged to installment reserves less surrender charges) $ 449 Transfers from accrual for additional credits to be allowed at next anniversaries 0 ---------------- $ 449 ================ Other deductions represent: Transfers credited to installment reserves on reconversions to installment certificates $ 0 Transfers for accrual for additional credits and accrued interest thereon 0 Transfers to settlement options 488 ---------------- $ 488 ================
F-48 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 2 - DESCRIPTIONS OF ADDITIONS TO RESERVES CHARGED TO OTHER ACCOUNTS AND DEDUCTIONS FROM RESERVES CREDITED TO OTHER ACCOUNTS DECEMBER 31, 2005 ($ in thousands) Default interest on installment certificates: Other additions represent: Reconversions of paid-up certificates charged to paid-up reserves $ 0 ================ Other deductions represent: Conversions to paid-up certificates - credited to paid-up reserves $ 0 Transfers to advance payments as late payments are credited to certificates 3 ---------------- $ 3 ================ Optional settlement certificates: Other additions represent: Transfers from installment certificate reserves (less surrender charges), single-payment and Series D certificate reserves upon election of optional settlement privileges $ 2,404 Transfers from paid-up certificate reserves 488 Transfers from accruals for additional credits to be allowed at next anniversaries 6 ---------------- $ 2,898 ================ Other deductions represent: Transfers to reserve for additional credits and accrued interest thereon $ 6 Transfers to optional settlement reserves 221 ---------------- $ 227 ================ Single-Payment certificates: Other additions represent: Transfers from accruals for additional credits to be allowed at next anniversaries $ 0 Transfers from accruals on a quarterly basis on: Reserve Plus Single-Payment 0 Cash Reserve Single-Payment 0 Flexible Savings 73,570 Flexible Savings-Emp 218 Preferred Investors 625 Investors 30,251 Special Deposits 941 Cash Reserve 2 Cash Reserve-3mo 4,004 Future Value 0 Stock Market 20,888 Market Strategy 13,811 AEBI Stock Market 9,538 Equity Index Stock Certificate 73 RP-Q 10 Cash Reserve-RP 0 Cash Reserve-RP-3mo 503 Flexible Saving-RP 21,310 Flexible Savings-RP-Emp 85 Preferred Investors-RP 46 Stock Market-RP 5,889 Market Strategy-RP 3,391 Transfers from accruals at anniversaries maintained in a separate reserve account 638 ---------------- $ 185,793 ================
F-49 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 2 - DESCRIPTIONS OF ADDITIONS TO RESERVES CHARGED TO OTHER ACCOUNTS AND DEDUCTIONS FROM RESERVES CREDITED TO OTHER ACCOUNTS DECEMBER 31, 2005 ($ in thousands) Single-Payment certificates continued: Other deductions represent: Transfers to optional settlement reserves: Single-Payment $ 47,330 R Single-Payment 56 Transfers to reserves for additional credits and accrued interest thereon 638 Transfers to a separate reserve account from the accrual account 0 Transfers to reserves on a quarterly basis: Reserve Plus Single-Payment 3 Cash Reserve Single-Payment 0 Flexible Savings 73,570 Flexible Savings-Emp 0 Preferred Investors 627 Investors 30,251 Special Deposits 940 Cash Reserve 2 Cash Reserve-3mo 4,004 Stock Market (19) AEBI Stock Market 1,555 RP-Q 10 Cash Reserve-RP 0 Cash Reserve-RP-3mo 503 Flexible Saving-RP 21,310 Flexible Savings-RP-Emp 85 Preferred Investors-RP 46 Stock Market-RP 5,889 Transfers to Federal tax withholding 77 ---------------- $ 186,877 ================ Due to unlocated certificate holders: Other additions represent: Amounts equivalent to payments due certificate holders who could not be located $ 37 ================ Other deductions represent: Payments to certificate holders credited to cash $ 51 ================
F-50 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands)
Deductions from Reserves ----------------- Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ 15 INC EXT 61-72 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ TOTAL 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ 20, including extended maturities 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 229-240 0 0 0 0 0 0 0 0 241-252 0 0 0 0 0 0 0 0 253-264 0 0 0 0 0 0 0 0 265-276 0 0 0 0 0 0 0 0 277-288 0 0 0 0 0 0 0 0 289-300 0 0 0 0 0 0 0 0 301-312 0 0 0 0 0 0 0 0 313-324 0 0 0 0 0 0 0 0 325-336 0 0 0 0 0 0 0 0 337-348 0 0 0 0 0 0 0 0 349-360 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ TOTAL 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ 15 A INC EXT 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 229-240 0 0 0 0 0 0 0 0 241-252 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ TOTAL 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------ F-51 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Deductions from Reserves ----------------- Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ 22A INC EXT 25-36 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 1 0 19 0 9 0 0 0 157-168 0 1 0 19 0 9 0 0 169-180 1 0 13 0 7 0 0 7 181-192 0 0 0 0 0 0 0 0 193-204 1 0 15 0 10 0 0 0 205-216 0 1 0 15 0 11 0 0 217-228 1 1 19 19 14 15 0 0 229-240 0 0 0 0 0 0 0 0 241-252 2 1 34 19 30 17 0 0 253-264 0 1 0 15 0 14 0 0 265-276 0 0 0 0 0 0 0 0 277-288 1 0 16 0 11 0 0 0 289-300 0 1 0 16 0 11 0 0 301-312 1 0 19 0 14 0 0 0 313-324 4 1 146 19 112 15 0 0 325-336 2 3 325 114 260 91 0 26 337-348 14 2 370 325 316 274 0 0 349-360 58 14 1,461 370 1,289 333 94 74 361-372 54 49 1,302 1,143 1,211 1,062 105 73 373-384 68 52 1,530 1,192 1,503 1,165 161 872 ------------------------------------------------------------------------------ TOTAL 208 127 5,270 3,266 4,787 3,017 360 1,052 ------------------------------------------------------------------------------ I-76 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 229-240 2 0 40 0 21 0 0 0 241-252 1 2 25 40 14 22 0 0 253-264 0 1 0 25 0 15 0 0 265-276 8 0 181 0 118 0 16 22 277-288 29 5 744 141 513 99 0 0 289-300 41 29 1,092 744 800 546 45 41 301-312 44 35 941 938 731 731 14 33 313-324 58 41 1,015 879 833 725 63 0 325-336 47 52 1,064 901 926 782 58 37 337-348 34 43 713 981 651 903 28 0 349-360 0 32 0 680 0 655 0 0 ------------------------------------------------------------------------------ TOTAL 264 240 $5,816 $5,329 $4,607 $4,478 $224 $ 133 ------------------------------------------------------------------------------ F-52 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Deductions from Reserves ----------------- Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ RES+FP 85-96 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 229-240 0 0 0 0 0 0 0 0 241-252 0 0 0 0 0 0 0 0 253-264 1 0 6 0 3 0 0 0 265-276 1 1 18 6 42 3 0 0 277-288 0 1 0 18 0 42 0 0 ------------------------------------------------------------------------------ TOTAL 2 2 24 24 45 45 0 0 ------------------------------------------------------------------------------ IC-Q-INST 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 1 0 24 0 1 0 0 0 229-240 12 1 205 24 44 1 0 0 241-252 0 0 0 0 0 0 12 0 ------------------------------------------------------------------------------ TOTAL 13 1 229 24 45 1 12 0 ------------------------------------------------------------------------------ IC-Q-IN 1-12 0 0 0 0 0 0 0 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 15 0 183 0 74 0 0 0 157-168 37 11 359 141 186 60 32 0 169-180 24 24 234 237 180 142 44 0 181-192 21 13 271 138 89 107 59 11 193-204 23 18 296 239 133 67 15 0 205-216 8 19 90 236 47 99 48 0 217-228 5 8 48 90 13 46 9 0 229-240 0 5 0 48 0 11 7 0 ------------------------------------------------------------------------------ TOTAL 133 98 $1,481 $1,129 $723 $532 $214 $11 ------------------------------------------------------------------------------ F-53 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Deductions from Reserves ------------------ Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ IC-IN-EMP 1-12 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 1 0 6 0 2 0 0 0 181-192 0 1 0 6 0 2 0 0 193-204 1 0 17 0 16 0 0 0 205-216 0 1 0 17 0 17 0 0 ------------------------------------------------------------------------------ TOTAL 2 2 23 23 18 19 0 0 ------------------------------------------------------------------------------ IC-I 1-12 2 6 25 81 7 14 0 0 13-24 2 2 81 25 10 10 0 0 25-36 1 2 12 81 1 15 0 0 37-48 0 1 0 12 0 2 0 0 49-60 1 0 6 0 3 0 0 0 61-72 6 0 52 0 34 0 2 0 73-84 1 5 24 40 19 28 8 0 85-96 1,227 1 19,846 24 9,829 22 0 0 97-108 2,647 1,036 42,164 15,772 22,364 8,878 1,219 0 109-120 2,810 2,082 44,873 32,013 26,236 18,379 3,512 0 121-132 47 24 790 347 446 246 5,069 0 133-144 26 32 246 450 185 290 17 0 145-156 16 15 155 138 117 119 0 0 157-168 0 14 0 143 0 112 0 0 ------------------------------------------------------------------------------ TOTAL 6,786 3,220 108,275 49,126 59,251 28,115 9,827 0 ------------------------------------------------------------------------------ IC-I-EMP 1-12 0 0 0 0 0 0 0 0 13-24 0 0 0 0 0 0 0 0 25-36 1 0 6 0 8 0 0 0 37-48 0 0 0 0 0 0 8 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 7 0 84 0 74 0 0 0 97-108 22 4 424 42 267 38 39 0 109-120 16 18 218 340 111 211 36 0 121-132 4 0 36 0 14 0 17 0 133-144 0 2 0 18 0 9 3 0 145-156 1 0 120 0 385 0 0 0 157-168 0 1 0 120 0 587 0 0 ------------------------------------------------------------------------------ TOTAL 51 25 888 520 860 845 103 0 ------------------------------------------------------------------------------ IC-I95 1-12 2,120 1,303 0 0 3,028 1,964 117 0 13-24 1,952 1,708 0 0 6,167 5,058 418 0 25-36 1,613 1,738 0 0 6,947 8,233 490 0 37-48 1,018 1,404 0 0 5,049 7,857 884 0 49-60 926 879 0 0 5,131 5,419 538 0 61-72 1,077 781 0 0 6,823 4,908 743 0 73-84 1,119 794 0 0 6,574 5,197 2,099 0 85-96 716 905 0 0 4,679 5,893 1,096 0 97-108 0 614 0 0 0 4,349 502 0 ------------------------------------------------------------------------------ TOTAL 10,541 10,126 $ 0 $ 0 $44,399 $48,878 $6,887 $ 0 ------------------------------------------------------------------------------ F-54 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Deductions from Reserves ---------------- Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ IC-I95-E 1-12 22 8 $ 0 $ 0 $ 66 $ 6 $ 1 $ 0 13-24 12 20 0 0 32 77 21 0 25-36 10 8 0 0 40 26 15 0 37-48 4 8 0 0 16 40 5 0 49-60 6 3 0 0 31 19 2 0 61-72 4 6 0 0 8 43 0 0 73-84 5 3 0 0 37 8 0 0 85-96 4 4 0 0 32 28 11 0 97-108 0 3 0 0 0 28 8 0 ------------------------------------------------------------------------------ TOTAL 67 63 0 0 261 275 63 0 ------------------------------------------------------------------------------ RP-Q-INST 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 0 0 0 0 0 0 0 0 229-240 18 0 244 0 98 0 0 0 241-252 0 6 0 72 0 26 13 16 253-264 5 0 47 0 21 0 0 0 265-276 3 4 52 28 65 12 8 0 277-288 0 1 0 12 0 38 17 0 ------------------------------------------------------------------------------ TOTAL 26 11 343 112 184 76 38 16 ------------------------------------------------------------------------------ RP-Q-FP 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 0 0 0 0 0 0 0 0 181-192 0 0 0 0 0 0 0 0 193-204 0 0 0 0 0 0 0 0 205-216 0 0 0 0 0 0 0 0 217-228 3 0 39 0 30 0 0 0 229-240 1 3 6 39 10 29 0 0 241-252 0 0 0 0 0 0 10 0 ------------------------------------------------------------------------------ TOTAL 4 3 45 39 40 29 10 0 ------------------------------------------------------------------------------ RP-Q-IN 1-12 0 0 0 0 0 0 0 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 121-132 0 0 0 0 0 0 0 0 133-144 0 0 0 0 0 0 0 0 145-156 0 0 0 0 0 0 0 0 157-168 0 0 0 0 0 0 0 0 169-180 2 0 12 0 2 0 0 0 181-192 1 2 12 12 0 2 0 0 193-204 0 1 0 12 0 1 0 0 ------------------------------------------------------------------------------ TOTAL 3 3 $ 24 $ 24 $ 3 $ 3 $ 0 $ 0 ------------------------------------------------------------------------------ F-55 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VI CERTIFICATE RESERVES PART 3 - INFORMATION REGARDING INSTALLMENT CERTIFICATES CLASSIFIED BY AGE GROUPINGS YEAR ENDED DECEMBER 31, 2005 ($ in thousands) Deductions from Reserves ------------------ Number of Accounts Amount of Cash with Certificate Maturity Amount of Surrenders Months Holders Value Reserves Prior to Certificate Series Paid December 31, December 31, December 31, Maturity Other --------------------------------------------------------------------------------------------- 2004 2005 2004 2005 2004 2005 2005 2005 ------------------------------------------------------------------------------ RP-IN-EMP 1-12 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 0 0 0 0 0 0 0 0 97-108 0 0 0 0 0 0 0 0 109-120 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ TOTAL 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ RP-I 1-12 0 0 0 0 0 0 0 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 73-84 0 0 0 0 0 0 0 0 85-96 5 0 42 0 27 0 0 0 97-108 7 5 66 42 62 31 0 0 109-120 7 5 252 52 150 20 51 0 121-132 0 0 0 0 0 0 10 0 ------------------------------------------------------------------------------ TOTAL 19 10 360 94 239 51 61 0 ------------------------------------------------------------------------------ RP-I-EMP 1-12 0 0 0 0 0 0 0 0 13-24 0 0 0 0 0 0 0 0 25-36 0 0 0 0 0 0 0 0 37-48 0 0 0 0 0 0 0 0 49-60 0 0 0 0 0 0 0 0 61-72 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ TOTAL 0 0 0 0 0 0 0 0 ------------------------------------------------------------------------------ Inst-R (RP-I95) 1-12 74 70 3,415 11,061 101 153 3 0 13-24 91 58 12,990 2,374 383 178 20 0 25-36 78 86 1,917 12,532 275 506 14 0 37-48 16 62 3,652 1,737 109 325 27 0 49-60 9 15 2,105 3,629 52 118 10 0 61-72 13 6 1,237 1,986 109 49 11 0 73-84 8 10 118 1,154 48 62 58 0 85-96 2 5 663 37 5 30 6 0 97-108 0 2 0 657 0 4 0 0 ------------------------------------------------------------------------------ TOTAL 291 314 26,098 35,167 1,083 1,425 149 0 ------------------------------------------------------------------------------ Inst-R-E 1-12 0 1 0 12 0 2 0 0 13-24 2 1 608 600 6 5 0 0 25-36 1 1 240 8 2 2 0 0 37-48 0 1 0 240 0 2 0 0 49-60 0 0 0 0 0 0 0 0 61-72 1 0 6 0 5 0 0 0 73-84 1 1 6 6 3 6 0 0 85-96 0 1 0 6 0 3 0 0 ------------------------------------------------------------------------------ TOTAL 5 6 860 872 16 20 0 0 ------------------------------------------------------------------------------ TOTAL - ALL SERIES 18,415 14,251 $149,736 $95,749 $116,560 $87,809 $17,948 $1,212 ==============================================================================
F-56 AMERIPRISE CERTIFICATE COMPANY SCHEDULE VII VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 ($ thousands)
YEAR ENDED DECEMBER 31, 2005 - ---------------------------------------------------------------------------------------------------------------------------- ADDITIONS -------------------------- RESERVES BALANCE CHARGED BALANCE DEDUCTED FROM AT TO COSTS DEDUCTIONS AT ASSETS TO BEGINNING AND FROM END WHICH THEY APPLY OF PERIOD EXPENSES OTHER RESERVES/WRITE-DOWNS OF PERIOD - ---------------------- --------- -------- ----------- ------------------------ ------------- Allowance for losses: Conventional first mortgage loans and other loans $ 7,536 (1,000) - - $ 6,536 YEAR ENDED DECEMBER 31, 2004 - ---------------------------------------------------------------------------------------------------------------------------- ADDITIONS -------------------------- RESERVES BALANCE CHARGED BALANCE DEDUCTED FROM AT TO COSTS DEDUCTIONS AT ASSETS TO BEGINNING AND FROM END WHICH THEY APPLY OF PERIOD EXPENSES OTHER RESERVES/WRITE-DOWNS OF PERIOD - ---------------------- --------- -------- ----------- ------------------------ ------------- Allowance for losses: Conventional first mortgage loans and other loans $ 9,536 (2,000) - - $ 7,536 YEAR ENDED DECEMBER 31, 2003 - ---------------------------------------------------------------------------------------------------------------------------- ADDITIONS -------------------------- RESERVES BALANCE CHARGED BALANCE DEDUCTED FROM AT TO COSTS DEDUCTIONS AT ASSETS TO BEGINNING AND FROM END WHICH THEY APPLY OF PERIOD EXPENSES OTHER RESERVES/WRITE-DOWNS OF PERIOD - ---------------------- --------- -------- ----------- ------------------------ ------------- Allowance for losses: Conventional first mortgage loans $ 4,223 5,313 - - $ 9,536
F-57 EXHIBIT INDEX The following exhibits are filed as part of this Annual Report: Exhibit Description - ------- ----------- 3(a). Amended and Restated Certificate of Incorporation of American Express Certificate Company, dated August 1, 2005, is filed electronically herewith as Exhibit 3(a). 3(b). Current By-Laws, filed electronically as Exhibit 3(e) to Post-Effective Amendment No. 19 to Registration Statement No. 33-26844, are incorporated herein by reference. 3(c). Certificate of Amendment, dated September 12, 1995, filed electronically as Exhibit 3(c) to Post-Effective Amendment No. 44 to Registration Statement No. 2-55252, is incorporated herein by reference. 3(d). Certificate of Amendment, dated April 30, 1999, filed electronically as Exhibit 3(a) to Registrant's March 31, 1999 Quarterly Report on Form 10-Q is incorporated herein by reference. 3(e). Certificate of Amendment, dated January 28, 2000, filed electronically as Exhibit 3(e) to Post-Effective Amendment No. 47 to Registration Statement No. 2-55252, is incorporated herein by reference. 3(f). Current By-Laws, filed electronically as Exhibit 3(e) to Post-Effective Amendment No. 19 to Registration Statement No. 33-26844, are incorporated herein by reference. 4-9. None or not applicable. 10(a). Amended Investment Advisory and Services Agreement between Registrant and Ameriprise Financial Services, Inc., dated August 16, 2005, filed electronically on or about November 14, 2005 as Exhibit 10(s) to Registrant's Form 10-Q is incorporated herein by reference. 10(b). Investment Management Services Transfer Agreement between Ameriprise Financial, Inc. and RiverSource Investment, LLC, dated September 29, 2005, filed electronically on or about November 14, 2005 as Exhibit 10(t) to Registrant's Form 10-Q is incorporated herein by reference. 10(c). Distribution Agreement dated November 18, 1988, between Registrant and IDS Financial Inc., filed electronically as Exhibit 1(a) to the Registration Statement No. 33-26844, for the American Express International Investment Certificate (now called, the IDS Investors Certificate) is incorporated herein by reference. 10(d). Depositary and Custodial Agreement dated June 23, 2004 between American Express Certificate Company and American Express Trust Company, filed electronically on or about February 18, 2005 as Exhibit 10(b) to Post-Effective Amendment No. 32 to Registration Statement No. 2-95577 for American Express Flexible Savings Certificate, is incorporated herein by reference. E-1 10(e). Foreign Deposit Agreement dated November 21, 1990, between IDS Certificate Company and IDS Bank & Trust, filed electronically as Exhibit 10(h) to Post-Effective Amendment No. 5 to Registration Statement No. 33-26844, is incorporated herein by reference. 10(f). Selling Agent Agreement dated June 1, 1990, between American Express Bank International and IDS Financial Services Inc. for the American Express Investors and American Express Stock Market Certificates, filed electronically as Exhibit 1(c) to the Post-Effective Amendment No. 5 to Registration Statement No. 33-26844, is incorporated herein by reference. 10(g). Second amendment to Selling Agent Agreement between American Express Financial Advisors Inc. and American Express Bank International dated as of May 2, 1995, filed electronically as Exhibit (1) to Registrant's June 30, 1995, Quarterly Report on Form 10-Q, is incorporated herein by reference. 10(h). Marketing Agreement dated October 10, 1991, between Registrant and American Express Bank Ltd., filed electronically as Exhibit 1(d) to Post-Effective Amendment No. 31 to Registration Statement 2-55252, is incorporated herein by reference. 10(i). Letter amendment dated January 9, 1997 to the Marketing Agreement dated October 10, 1991, between Registrant and American Express Bank Ltd. filed electronically as Exhibit 10(j) to Post-Effective Amendment No. 40 to Registration Statement No. 2-55252, is incorporated herein by reference. 10(j). Form of Letter amendment dated April 7, 1997 to the Selling Agent Agreement dated June 1, 1990 between American Express Financial Advisors Inc. and American Express Bank International, filed electronically as Exhibit 10 (j) to Post-Effective Amendment No. 14 to Registration Statement 33-26844, is incorporated herein by reference. 10(k). Letter Agreement dated July 28, 1999 amending the Selling Agent Agreement dated June 1, 1990, or a schedule thereto, as amended, between American Express Financial Advisors Inc. (formerly IDS Financial Services Inc.) and American Express Bank International, filed electronically to Registrant's June 30, 1999 Quarterly Report on Form 10-Q, is incorporated herein by reference. 10(l). Letter Agreement dated July 28, 1999, amending the Marketing Agreement dated October 10, 1991, or a schedule thereto, as amended, between IDS Certificate Company and American Express Bank Ltd., filed electronically to Registrant's June 30, 1999 Quarterly Report on Form 10-Q, is incorporated herein by reference. 10(m) Selling Agent Agreement, dated March 10, 1999 between American Express Financial Advisors Inc. and Securities America, Inc., filed electronically as Exhibit 10 (l) to Post-Effective Amendment No. 18 to Registration Statement 33-26844, is incorporated herein by reference. 10(n) Letter Agreement, dated April 10, 2000, amending the Selling Agent Agreement, dated March 10, 1999, between American Express Financial Advisors Inc. and Securities America, Inc., filed electronically as Exhibit 10 (o) to Post-Effective Amendment No. 20 to Registration Statement 33-26844, is incorporated herein by reference. E-2 10(o) Selling Dealer Agreement, dated July 31, 2000, between American Express Financial Advisors Inc. and Securities America, Inc. filed electronically on or about February 18, 2005 to Post-Effective Amendment No. 32 to Registration Statement No. 2-95577 for American Express Flexible Savings Certificate is incorporated herein by reference. 10(p) (1) Code of Ethics under rule 17j-1 for Registrant, filed electronically as Exhibit 10(p)(1) to Pre-Effective Amendment No. 1 to Registration Statement No. 333-34982, is incorporated herein by reference. (2) Code of Ethics under rule 17j-1 for Registrant's investment advisor and principal underwriters, dated October 26, 2005 is filed electronically herewith as Exhibit 10(p)(2). 10(q) Letter of Representations dated August 22, 2000 on behalf of American Express Certificate Company and American Express Client Service Corporation filed electronically as Exhibit 10(r) to Post-Effective Amendment No. 32 to Registration Statement No. 2-95577, is incorporated herein by reference. 10(r) Transfer Agent Agreement, dated December 2, 2004 between American Express Certificate Company and American Express Client Service Corporation filed electronically on or about February 18, 2005 as Exhibit 10(r) to Post-Effective Amendment No. 32 to Registration Statement No. 2-95577 for American Express Flexible Savings Certificate is incorporated herein by reference. 10(s) Administration and Services Agreement, dated October 1, 2005 between RiverSource Investments, LLC and Ameriprise Financial, Inc. is filed electronically herewith as Exhibit 10(s). 10(t) Amendment to Maketing Agreement, dated October 1, 2005 between Ameriprise Certificate Company and American Express Bank Ltd. is filed electronically herewith as Exhibit 10(t). 10(u) Fifth Amendment to Selling Agent Agreement, dated October 1, 2005 between Ameriprise Financial Services, Inc. and American Express Bank International is filed electronically herewith as Exhibit 10(u). 11-23. None or not applicable. 24(a). Directors' Power of Attorney, dated February 9, 2006, is filed electronically herewith. 24(b). Director's Power of Attorney, dated February 9, 2006, is filed electronically herewith. 24(c). Officers' Power of Attorney, dated February 9, 2006, is filed electronically herewith. 25-99. None or not applicable. 31.1 Certification of Paula R. Meyer pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 31.2 Certification of Brian J. McGrane pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 32.1 Certification of Paula R. Meyer and Brian J. McGrane pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. E-3 EX-3 2 ex3pa.txt Exhibit 3(a) Delaware ----------------------- The First State I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF "AMERICAN EXPRESS CERTIFICATE COMPANY", CHANGING ITS NAME FROM "AMERICAN EXPRESS CERTIFICATE COMPANY" TO "AMERIPRISE CERTIFICATE COMPANY", FILED IN THIS OFFICE ON THE FIRST DAY OF AUGUST, A.D. 2005, AT 9:50 O'CLOCK A.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS. /s/ Harriet Smith Windsor ----------------------------------------- Harriet Smith Windsor, Secretary of State 0845173 8100 AUTHENTICATION: 4059475 050629588 DATE: 08-01-05 State of Delaware Secretary of State Division of Corporations Delivered 09:50 AM 08/01/2005 Filed 09:50 AM 08/01/2005 SRV050629588 - 0845173 FILE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF AMERICAN EXPRESS CERTIFICATE COMPANY American Express Certificate Company (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware (the "General Corporation Law"), hereby certifies as follows: 1. The Corporation was originally incorporated under the General Corporation Law on October 28, 1977, under the name Investors Certificate Company. On April 2, 1984, a certificate of amendment was filed changing the name of the Corporation to IDS Certificate Company. On February 14, 2000, a certificate of amendment was filed changing the name of the Corporation to American Express Certificate Company, effective as of April 26, 2000. 2. A resolution proposing and declaring advisable the adoption of an Amended and Restated Certificate of Incorporation was duly adopted by the Corporation's Board of Directors pursuant to the applicable provisions of Sections 242 and 245 of the General Corporation Law. 3. The sole shareholder has given written consent to the adoption of the Amended and Restated Certificate of Incorporation in accordance with the provisions of Section 228 of the General Corporation Law. 4. The following Amended and Restated Certificate of Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation to change the name of the Corporation to Ameriprise Certificate Company. 5. The text of the Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety as follows: FIRST: The name of the Corporation is Ameriprise Certificate Company. SECOND: The Corporation's registered office in the State of Delaware is to be located at Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name and address of its registered agent is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, and, without limiting the generality of the foregoing; 2 (a) To engage in an investment business which shall include, without limiting the generality of said words, the business of executing, making, issuing, negotiating, selling and otherwise disposing of investment contracts, and any or all of such things, and the doing of any act or thing incident to or necessary or convenient for the executing, making, issuing, negotiating, selling or disposing of said contracts or the performance thereof; and the words "investment contracts" shall include, without limiting the generality of said words, any security, contract, agreement, certificate, face amount certificate, instrument or writing containing or representing an obligation or a guarantee by the Corporation to pay the holder thereof, or his assignee or personal representatives, or any other person, corporation, society, firm or association, a stated or determinable sum or sums in cash or its equivalent, at a specified or determinable future date or dates, the consideration for which consists of payments made or to be made to the Corporation in installments or periodically of a stated or determinable amount or in a single sum, regardless of whether the holder thereof is or may be entitled to share in the profits or earnings of the Corporation or to receive additional credits or sums therefrom. (b) To manufacture, construct, produce, acquire, own, possess, encumber and dispose of property, real, personal and mixed, of every kind and nature, tangible or intangible, and every right and interest therein, and wherever situated, whether within or without the State of Delaware, and to enjoy and exercise in respect thereto all of the rights, powers and privileges of ownership and possession. (c) To lend or borrow money, with or without security, and to enter into any contract, which may seem to the Corporation to be necessary, expedient or convenient to carrying on or conducting its business, and to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and negotiable or transferable securities, instruments and evidences of indebtedness, either secured or unsecured. (d) To act for others as agent, factor, broker or manager in the acquisition, disposal, financing, encumbering, management and care of real and personal property of every kind and nature and wherever situated or in the operation or conduct of any business. (e) To acquire, engage in and conduct, and dispose of any business of any kind or nature which may seem to the Corporation to be capable of being conveniently carried on and conducted in connection with said investment business or calculated, directly or indirectly, to further said business or to enhance the value of the Corporation's property or business. (f) To buy, sell and deal in any and all kinds of insurance and surety bonds either for itself or as agents or brokers for others, but not to issue or enter into contracts of insurance as insurer. (g) To acquire, hold, mortgage, pledge or dispose of the shares, bonds, securities and evidences of indebtedness of any person, firm or corporation, and while the owner or holder of any such shares, bonds, securities, and evidences of indebtedness to exercise all the rights, powers and privileges of ownership, including the right to vote the same. 3 (h) To do any or all of the things therein before set forth in the same manner, to the same extent and as fully as natural persons might or could do, and in any part of the world, as principal, agent, contractor or otherwise, for itself or others and either alone or jointly or in association with others. IN FURTHERANCE AND NOT IN LIMITATION of the general powers conferred by the laws of the State of Delaware, and the purposes herein set forth, it is expressly provided that this Corporation shall also have the following powers: 1. To take, purchase, or otherwise acquire, own, hold, deal in, mortgage or otherwise lien, and to lease, sell, exchange, transfer, or in any manner whatever dispose of real property within or without the State of Delaware, wherever situated. 2. To manufacture, purchase or otherwise acquire in any lawful manner and to hold, own, mortgage, pledge, sell, assign, transfer or in any manner dispose of, and to invest, trade, and deal in and with goods, wares, merchandise, and real and personal property of any and every class and description, and in any part of the world. 3. To acquire the goodwill, rights, and property, and to undertake the whole or any part of the assets or liabilities of any person, firm, association or corporation; to pay for the same in cash, the stock of this company, bonds or otherwise; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of the business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business. 4. To acquire, apply for, register, purchase, hold, own, use, sell, assign, lease, grant licenses or territorial rights in respect of, mortgage or otherwise dispose of Letters Patent of the United States or of any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or useful in connection with any business of this Corporation. 5. To subscribe for, purchase, invest in, receive, obtain an interest in, hold, sell, assign, transfer, exchange, deposit, mortgage, pledge, hypothecate, guarantee, underwrite, or otherwise dispose of any of the shares of capital stock of, or any voting trust certificates, bonds, mortgages, debentures, trust receipts, notes, obligations, securities or evidences of indebtedness created by or with respect to any other private or public corporation or corporations organized under the laws of this state or any other state, county, nation or government, or any government, municipality, trust, syndicate, association, partnership or individual, and while the owner or holder thereof to do any act or thing permitted by law to preserve, protect, improve or enhance the value thereof and to exercise all the rights, powers and privileges of ownership or interest in respect thereof, including the right to vote thereon and otherwise act with respect thereto. 4 6. To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly. 7. To enter into, make and perform contracts of every kind with any person, firm, association or corporation, municipality, body politic, county, territory, state, government or colony or dependence thereof. 8. To enter into any partnership, limited partnership, joint venture, or any other lawful arrangement for sharing profits, union of interests, reciprocal concession or cooperation with any corporation, association, partnership, syndicate, entity, person, or governmental, municipal or public authority, domestic or foreign, located in or organized under the laws of any authority in any part of the world, in the carrying on of any business which the Corporation is authorized to carry on, or any business or transaction deemed necessary, convenient or incidental to carrying out any of the purposes of the Corporation. 9. To borrow or raise moneys from time to time for any of the purposes of the Corporation, and from time to time, without limit as to the amount, to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable, non-negotiable, or transferable instruments and evidences of indebtedness, whether secured by mortgage or otherwise, as well as to secure the same by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the Corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the Corporation for any of its corporate purposes, so far as may be permitted by the laws of the State of Delaware. 10. To loan to any person, firm or corporation any of its surplus funds, either with or without security. 11. To have offices, conduct its business and promote its objects within and without the State of Delaware, in other states, the District of Columbia, the territories and colonies of the United States, and in foreign countries, without restrictions as to place or amount. 12. To do any or all of the things set forth to the same extent as natural persons might or could do in any part of the world, as principals, agents, contractors, trustees, or otherwise, and either alone or in company with others. IN GENERAL, to carry on any other business, similar or dissimilar, whether manufacturing or otherwise, not forbidden by the laws of the State of Delaware, and with all the powers conferred upon corporations by the laws of the State of Delaware. It is the intention that the objects, purposes and powers specified in Article THIRD, be nowise limited or restricted by reference to or inference from the terms of any other clause or paragraph in the Amended and Restated Certificate of Incorporation, but that the objects, purposes and powers specified in Article THIRD and in each of the clauses or paragraphs of this charter shall be regarded as independent objects, purposes and powers. 5 FOURTH: The total number of shares which the Corporation shall have authority to issue is One Hundred Fifty Thousand (150,000) shares of Common Stock or the par value of Ten Dollars ($10) per share. FIFTH: The existence of the Corporation is to be perpetual. SIXTH: The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever. SEVENTH: The number of directors of the Corporation shall be fixed by, or in the manner provided in, the by-laws, and may be altered from time to time as may be provided by the by-laws, but in no case shall the number be less than three (3). The directors of the Corporation need not be stockholders. Elections of directors need not be by written ballot unless the by-laws of the Corporation shall so provide. EIGHTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: 1. To make, alter or repeal the by-laws of the Corporation. 2. To authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation. 3. To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created. NINTH: The stockholders and directors shall have power to hold their meetings and keep the books, documents and papers of the Corporation outside of the State of Delaware, at such places as may be from time to time designated by the by-laws or by the resolution of the stockholders or directors, except as otherwise required by the laws of Delaware. TENTH: The Corporation reserves the right to amend, alter, change, modify, add to or repeal any provisions contained in the Amended and Restated Certificate of Incorporation of the Corporation in the manner now or hereafter prescribed by statute, and all rights conferred on directors and stockholders herein are granted subject to this reservation. ELEVENTH: No director shall be personally liable to the Corporation or its stockholder for monetary damages for breach of duty as a director, except (i) for any breach of the director's duty of loyalty to the Corporation or its stockholder; (ii) for acts or omissions not in good faith or that involve intentional misconduct, a knowing violation of law, willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the director's office; (iii) for acts or omissions giving rise to liability under Section 174 of Delaware General Corporation Law; (iv) for any transaction from which the director derived an improper personal benefit; or (v) for any act or omission occurring prior to the adoption of this Article ELEVENTH on September 12, 1995. 6 IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed, acknowledged and filed with the Delaware Secretary of State by the undersigned duly authorized officer as of this 1st day of August, 2005. AMERICAN EXPRESS CERTIFICATE COMPANY /s/ Paula R. Meyer - ------------------ Paula R. Meyer President 7 EX-10 3 ex10p2.txt Exhibit 10(p)(2) INVESTMENT ADVISER CODE OF ETHICS FOR INVESTMENT ACCESS PERSONS AMERIPRISE FINANCIAL, INC. AND ITS AFFILIATES October 26, 2005 1
Investment Adviser Code of Ethics Ameriprise Financial, Inc. and its Affiliates Topic Page Overview Required Standards of Business Conduct 3-5 General Policy on Accepting Gifts 5 Gift Policy for the Investment Department 6 Fiduciary Principles 7 Personal Trading Rules Framework Applicability 8 General Rules 9-11 Basis For Rules 11 Definitions 12-13 Reporting Requirements for Investment Access Persons Security Activities Which Must Be Reported 14 How To Comply 14-15 Exceptions to Limited Choice 15 Additional Rules & Reporting Requirements Preclearance of Securities Trades 16 Exceptions 17 Preclearance form 18 Reporting and Preclearance Chart 19-21 Limited Offering (Private Placement) Preclearance 22 60-Day Holding Period for Mutual Funds 23 Initial Holdings Disclosure & Annual Certification 24 Quarterly Reporting and Certification 24 Investment Clubs 25 Giving Securities 25 Sanctions 26 Unusual Trading Activity 26 Incremental Restrictions and Requirements for Investment Personnel 60-Day Holding Period 27-28 Research Analysts: Additional Rules 29-30 Incremental Portfolio Manager Restrictions 7-Day Blackout Period 31 Preclearance of Proprietary Mutual Funds 32 Responsibilities of the Chief Compliance Officer 33 Ameriprise Financial Insider Trading Policy 34-40 Forms & Completion Instructions Initial Brokerage and Mutual Fund Account and Personal Holdings Certification 41-43 Brokerage Account Notification Instructions & Form 44-45 Limited Choice Exception Request Form 46
2 Overview As a condition of your continued employment or association with Ameriprise Financial, Inc. or its affiliates ("Ameriprise Financial"), you are required to read, understand, and fully comply with this Code of Ethics. The Code of Ethics also incorporates into its terms and requirements the provisions of other important documents to which you are subject; namely, the Ameriprise Financial Code of Conduct and, for financial advisors and their employees, the Compliance Resource Guide. It is your personal responsibility and accountability to avoid any conduct that could create a conflict, or even the appearance of a conflict, with our clients' interests, or do anything that could damage or erode the trust our clients place in Ameriprise Financial. This is the spirit of the Code of Ethics. Every person has the absolute obligation to comply with both the letter and the spirit of the Code. Failure to comply with its spirit is just as much a violation as a failure to comply with the written provisions of the Code. In this regard, you should also be aware that it is impossible for the Code of Ethics to cover every situation you may encounter. In those situations that are not specifically covered by the Code we must follow the spirit of the Code. If you are uncertain as to the appropriate course of action you should take, you should seek immediate assistance from your leader, the Chief Compliance Officer or the Office of the Ombudsperson before acting. If the Code of Ethics is silent on a particular matter, it does not authorize conduct that violates the spirit of the Code. The Code covers not only the activities you perform on a day-to-day basis, but also your personal securities transactions as well as those of certain of your family members and entities (such as corporations, trusts, or partnerships) that you may be deemed to control or influence. Appropriate sanctions will be imposed for violations of the Code of Ethics. Sanctions may include bans on personal trading, financial penalties, disgorgement of trading profits, suspension of employment, and/or termination of employment or association with Ameriprise Financial. Repeat violations of the Code will result in progressively stronger sanctions. Self-reporting a violation of the Code will be considered in determining the appropriate sanction for the violation. This Code will be provided to all individuals who are subject to its terms. After you receive and review the Code you must certify that you have received, read and understand the document and agree that you are subject to it and will comply with it. You will also be required to provide similar certifications when the Code is amended. On an annual basis you will also be asked to provide a re-certification and represent that you have complied with the Code during the past year. The initial certification form is attached. 3 Required Standards of Business Conduct Under this Code of Ethics all supervised persons of Ameriprise Financial must comply with Ameriprise Financial's standards of business conduct. These standards are the following: o Compliance with all applicable laws and regulations, including the federal securities laws and our fiduciary obligations; o Compliance with this Code of Ethics; o Compliance with the Ameriprise Financial Code of Conduct; o Compliance with all other policies and procedures applicable to your position and assigned responsibilities; o Financial advisors and their employees must also comply with the Compliance Resource Guide. o Members of the Investment Department and others who receive written notice from the Chief Compliance Officer must also comply with the Gift Policy for the Investment Department. See page 6. These standards apply to all individuals, at all levels of the organization. Compliance with applicable laws and regulations is mandatory for everyone and is not subject to business priorities or individual discretion. If at any time you have a question about the legality of a course of action you should consult with the General Counsel's Office before proceeding. The Investment Advisers Act of 1940 imposes a fiduciary duty on an investment adviser to act in utmost good faith with respect to its clients, and to provide full and fair disclosure of all material facts, particularly where the adviser's interests may conflict with the client's. The Adviser has a duty to deal fairly and act in the best interests of its clients at all times. All employees of Ameriprise Financial must comply with the Ameriprise Financial Code of Conduct. The Code of Conduct deals with issues covering, among other things, the acceptance of gifts, service on the boards of public companies and other outside activities. For specific guidance on these and other topics that may not be specifically covered by the Code of Ethics you should refer to the Code of Conduct and the Compliance Resource Guide. All financial advisors associated with Ameriprise Financial must comply with the Compliance Resource Guide. Besides referring to the Code of Ethics and the Code of Conduct, you should also refer to the Compliance Resource Guide for guidance in a particular situation. The provisions of the Code of Ethics and the Compliance Resource Guide should not conflict. In the event the provisions of the Code of Ethics or the Compliance Resource Guide conflict or appear to conflict with those contained in the Code of Conduct you should follow the guidance contained in the Code of Ethics or Compliance Resource Guide. If at any time you feel there is ambiguity as to what the appropriate course of action should be in a particular situation you should immediately seek assistance from the General Counsel's Office or the Compliance Department before you act. You are also subject to compliance policies and procedures and other policies and procedures adopted by the organization. You are responsible for being familiar with and complying with these policies and procedures. If you are uncertain as to these additional policies and procedures to which you are subject, you should speak with your leader. As described in greater detail below, the Code of Ethics also addresses personal securities trading activities in an effort to detect and prevent illegal or improper transactions. 4 Under this Code of Ethics you have a duty to promptly report any violation or apparent violation of the Code of Ethics (including the Code of Conduct and Compliance Resource Guide) to the Chief Compliance Officer. You can also report violations or possible violations to the Office of the Ombudsperson. This duty exists whether the violation or apparent violation is yours or that of another employee or associated person of Ameriprise Financial. All such reports will be treated confidentially to the extent permitted by law and will be investigated promptly and appropriately. Ameriprise Financial prohibits retaliation against individuals who report violations or apparent violations of the Code in good faith and will treat any such retaliation as a further violation of the Code. However, it must be understood that employees or associated persons of Ameriprise Financial who violate the Code are subject to sanctions for the violation even if they report the violation. General Policy on Accepting Gifts Instances may arise where a person or organization offers you a gift. When being offered a gift, the Ameriprise Financial Code of Conduct should serve as your primary guide to determining whether or not a gift is acceptable. The Code of Conduct states: "You may accept entertainment, token gifts or favors only when the value involved is not significant and clearly will not place you under any real or perceived obligation to the donor." See section on Gifts in the Code of Conduct. When receiving a gift, it is imperative to avoid even the appearance of a conflict of interest, regardless of the value of the gift. Sometimes a situation may be unclear. If you are unsure whether to accept a gift, talk with your leader. If your leader is unsure, or feels an exception should be made, s/he should contact the Compliance Department for guidance. Above all, the decision should comply with the spirit of the Code of Conduct and this Code of Ethics. 5 Gift Policy for the Investment Department The following additional policy applies to all members of the Investment Department, as well as to others who receive written notice from the Chief Compliance Officer that it applies to them. Gifts and Limits: Acceptable gifts have been divided into two broad categories defined below: 1. Tangible items and events not attended by the gift giver: These are generally either physical objects, e.g., tote bag, golf balls, fruit basket, etc., or a function not attended with the gift giver, e.g., free tickets to a sporting event. The acceptable dollar limits are outlined below:
- ------------------------------------------------------------------ --------------------------------------------------------- Retail value of gift Action required - ------------------------------------------------------------------ --------------------------------------------------------- $0 to $50* none - ------------------------------------------------------------------ --------------------------------------------------------- $50 to $100* approval from your leader and your Business Unit Compliance Officer (BUCO) or your BUCO's designee - ------------------------------------------------------------------ ---------------------------------------------------------
* the maximum allowed is $100, which is also the annual limit for multiple gifts from a single gift giver Approval from your leader and BUCO (or your BUCO's designee) must be written, and must be obtained before accepting the gift. 2. Events attended with the gift giver: These generally are business functions or social activities that include access to the events for the purpose of conducting business, networking, and/or providing personal enjoyment where you attend with the gift giver. The acceptable dollar limit is outlined below:
Retail value of gift Action required - ------------------------------------------------------------------ --------------------------------------------------------- $0 to $150* none - ------------------------------------------------------------------ --------------------------------------------------------- $150 to $400* approval from your leader and your BUCO or your BUCO's designee - ------------------------------------------------------------------ ---------------------------------------------------------
* the maximum allowed is $400, which is also the annual limit for multiple gifts from a single gift giver Approval must be written, and should be obtained before the event occurs. If it is not reasonable to get approval from your leader before the activity, inform him/her as soon as possible. You always must obtain approval from your BUCO or your BUCO's designee. Examples of acceptable events could include sporting events, such as golf outings sponsored by a broker; or theatrical performances, musical performances or dining, such as a theater show and dinner reception for research analysts. Unacceptable gifts include such things as cash, gift cheques, gift certificates, spending cards, airfare, and lodging. These cash and "cash-equivalent" items should not be accepted. In addition, no types of gifts should be solicited. 6 Fiduciary Principles The following general fiduciary principles shall govern your activities and the interpretation and administration of these rules: o The interests of our advised and sub-advised account clients (including Mutual Fund shareholders) must be placed first at all times. o All personal trading transactions must be conducted consistent with the rules contained in this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility. o You should never use your position with the company, or information acquired during your employment, in your personal trading in a manner that may create a conflict - or the appearance of a conflict - between your personal interests and the interest of the company or its customers and clients. If such a conflict or potential conflict arises, you must report it immediately to Personal Trade Compliance. o Company personnel should not take inappropriate advantage of their positions. In connection with providing investment management services to clients, this includes prohibiting any activity which directly or indirectly: o Defrauds a client in any manner; o Misleads a client, including any statement that omits material facts; o Operates or would operate as a fraud or deceit on a client; o Functions as a manipulative practice with respect to a client; and o Functions as a manipulative practice with respect to securities. These rules do not identify all possible conflicts of interest, and literal compliance with each of the specific provisions of this Code of Ethics will not shield company personnel from liability for personal trading or other conduct that is designed to circumvent its restrictions or violates a fiduciary duty to our clients. 7 Personal Trading Rules Framework Applicability These rules apply to securities trading in which you have a beneficial ownership. Beneficial ownership includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where they give advice and also have a direct or indirect ownership. 8 General Rules These general rules, along with the procedures contained in the rest of this document, must always be followed: 1. No use of inside information (refer to "Ameriprise Financial Insider Trading Policy" on page 34). 2. No front-running. This involves an individual taking advantage of non-public information about imminent trading activity in our Mutual Funds or other advised accounts by trading in a security before the fund or advised account does. You are not allowed to trade in a particular security ahead of, or at the same time as, your clients' accounts. 3. No misuse of material non-public information relating to Mutual Funds, including information relating to portfolio holdings or pricing. 4. No Access Person shall divulge to any person any client holdings, any recommendation made to a client, or any contemplated or completed securities transactions or trading strategies of a client, except as required in the performance of his or her duties and only to the extent such other person has a need to know such information to perform his or her duties. Disclosures of any past, current or contemplated client holdings must be consistent with the Portfolio Holdings Disclosure policy. 5. No market timing (short-term trading) in shares of Mutual Funds. This prohibition applies across all accounts in which you have a beneficial interest (so that you cannot buy shares of a Mutual Fund in one account and sell them from another account in market timing transactions), including the Ameriprise Financial 401(k) Plan and Mutual Funds underlying a variable annuity and variable life insurance contracts. This prohibition also applies to investments through pooled investment vehicles, such as hedge funds, that may engage in market timing. You are responsible for ensuring that no pooled investment vehicle in which you invest engages in market timing. If you invest in a hedge fund whose offering document does not state whether the hedge fund engages in market timing of Mutual Funds, you should obtain written assurance from the hedge fund that it does not engage in market timing of Mutual Funds. 6. No purchasing of initial public offerings (this includes secondary issues of equity or fixed income) 7. No preferential treatment from other brokerage firms due to the purchaser's employment by or association with Ameriprise Financial. 8. No direct trades with broker/dealers' trading desks. 9. No non-retail relationships with broker/dealers. 9 10. No use of Ameriprise Financial's name (or the name of any of its subsidiaries) to obtain a better price from a broker who is a market maker in the security being traded. 11. No speculative trading of Ameriprise Financial stock, which is characterized by transactions in "put" or "call" options, or short sales or similar derivative transactions. Ameriprise Financial discourages short-term trading in its own stock. (You are allowed to exercise any Ameriprise Financial stock options you have received as a result of your employment with the Company. Members of the Executive Leadership Team, however, must preclear these trades through the Corporate Secretary's office.) 12. No stopping stock. This is defined as a guarantee by a specialist that an order placed by a Floor Broker will be executed at the best bid or offer price then in the Specialist's book unless it can be executed at a better price within a specified period of time. 13. If the company's managed or owned accounts are active in a given security, no use of that security to meet margin calls if cash or other securities are available to meet the call. 14. If you decide what security to sell to meet a margin call you must request preclearance for that security. 15. All traders, trading assistants, fixed income sector team leaders and sector team managers who trade in OTC securities must trade through Ameriprise Financial Brokerage. 16. No trading of brokerage firm stocks by all traders and trading assistants, fixed income sector team leaders and sector team managers. 17. There is a 60-day holding period for Mutual Funds as described on page 23. 18. An Access Person shall use his or her best judgment in giving investment advice to clients and shall not take into consideration his or her personal financial situation or interests in doing so. 19. When engaging in a personal securities transaction, an Access Person shall always place the interests of clients first and avoid any actual or potential conflict of interest or abuse of his or her position. 20. Required forms must be filled out completely, accurately and on a timely basis. This includes quarter end reports. Violations of the Code, including late filing of periodic reports will be reported to Senior Management and the RiverSource Investments, LLC Funds Board of Directors. 10 Important: o Obligation to Report Violations: Any person who discovers that he or she or another person has violated or apparently violated these general rules or other provisions of this Code must promptly report the matter to the Chief Compliance Officer. o Personal Trading Records Subject To Review By Regulators: The SEC and the NASD have the authority to review individuals' personal trading records. It is not unusual in the course of regulatory exams for the examiners to interview individuals about their trading activity or violations of the Code of Ethics. o Even if you receive preclearance, you cannot be ensured that you have not violated the Code. o The Compliance Department has the authority to review records and request additional information. o The privacy of your reported information is extremely important and will be held in the utmost confidence but is subject to review and action by appropriate personnel such as Personal Trade Compliance personnel. Basis for Rules The rules and procedures that apply to personal trading for Investment Access Persons are derived from: Securities and investment laws o Securities Act of 1933 o Securities Exchange Act of 1934 o Investment Company Act of 1940 o Investment Advisers Act of 1940 o Insider Trading and Securities Fraud Enforcement Act of 1988 Rules, regulations and corporate policies o Securities and Exchange Commission (SEC) o National Association of Securities Dealers (NASD) o Ameriprise Financial Insider Trading Policy o Ameriprise Financial Code of Conduct Investment Company Institute (ICI) Guidelines to Industry on Personal Investing 11 Definitions This Investment Adviser Code of Ethics for Investment Access Persons applies to three groups of personnel. Each successive group is a subset of the previous group, and is subject to incrementally restrictive procedures. Therefore: Investment Personnel are subject to all Investment Access Person rules, plus the additional specified rules. Portfolio Managers are subject to Investment Personnel and Investment Access Person rules, plus additional specified rules. Access Persons: supervised persons and other persons who are employees or associated persons of Ameriprise Financial, who have access to nonpublic information regarding clients' purchase or sale of securities or non public information regarding the portfolio holdings of Proprietary Funds, are involved in making securities recommendations to clients, or who have access to recommendations that are nonpublic. Retail Access Persons: Access Persons who have access only to Ameriprise Financial retail client information. Investment Access Persons: Access Persons who have access to Ameriprise Financial / RiverSource institutional client information. Investment Access Persons are also subject to rule 17j-1 under the Investment Company Act of 1940. These individuals meet one or more of the following criteria: 1. Have access to information regarding impending purchases or sales of portfolio securities for any account owned or managed. 2. Obtain such information within 10 days after the trade. 3. Have access to information on the holdings of Mutual Funds advised by or sub-advised by Ameriprise Financial / RiverSource within 30 days of the date of the holdings. 4. Have access to the Investment Department's investment research and recommendations. 5. Work in the Investment Department or Asset Management Group, including but not limited to the following locations, Minneapolis, Boston, Cambridge, San Diego, Los Angeles, New York, New Jersey, and London (excluding Threadneedle employees*). 6. Participate in the investment decision-making process. 7. Have a specific role which compels Investment Access Person status, for example: - serving as a Board member of an Ameriprise Financial / RiverSource investment company - providing direct, ongoing audit, compliance, or legal support to money management businesses. *Threadneedle personnel are subject to a separate investment adviser code of ethics and are not subject to this one. Investment Personnel are research analysts, traders and portfolio managers, fixed income sector team leaders or sector team managers, Vice Presidents of investment administration, Senior Vice President - Fixed Income and the Chief Investment Officer. Portfolio Managers are individuals with direct responsibility and authority over investment decisions affecting any account owned or managed. This includes associate portfolio managers. 12 Limited Offerings (Private Placements): A Limited Offering is an offering of securities exempt from registration due to exemptions for the size of offering and the number of purchasers as defined under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) (14 U.S.C. 77d(2) or 77d(6) or pursuant to Rule 504, 505 or 506 of Regulation D under the Securities Act of 1933. Limited Offerings include Private Placements. You are not allowed to invest in Limited Offerings (Private Placements) without preclearance - see page 22. Supervised Person: any partner, officer, director (or other person occupying a similar status or performing similar functions), or an employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser. Mutual Funds: U.S. registered open-end investment companies the shares of which are redeemable on any business day at the net asset value, including Mutual Funds that underlie variable annuity and variable life insurance contracts. Proprietary Funds: investment companies that are registered with the SEC and for which Ameriprise Financial / RiverSource serves as an investment adviser. Non-proprietary Funds: investment companies that are registered with the SEC and are not Proprietary Funds. 13 Reporting Requirements for Investment Access Persons Securities Activities Which Must Be Reported All personal securities trading activities (i.e., stocks, options, bonds, Mutual Fund shares, etc.), whether bought or sold, must be reported, with the exception of such things as money market mutual funds and certificates of deposit. See "How to Comply" section below for more information. A chart indicating which transactions must be reported is located on pages 19-21. You must report activity involving securities trading in which you have a beneficial ownership. This includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where you give advice and also have a direct or indirect ownership. Failure to disclose all brokerage and Mutual Fund accounts is a violation of the Code and may result in a sanction, which includes possible termination. How To Comply Unless you have an exception approved by Personal Trade Compliance, your personal trading must be conducted through one of three brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch. You must report any new accounts opened by immediately completing the following steps: o Complete the Brokerage Account Notification Form on page 45 and return it to Personal Trading, H26/1880. Failure to properly carry out this notification process may result in a sanction. o Notify your broker of your association with Ameriprise Financial. You are responsible for notifying your broker that you work for Ameriprise Financial, a broker/dealer, and ensuring that Personal Trade Compliance is provided with duplicate statements and confirmations for your account(s). 14 What types of investments must be transferred to or held at one of the limited choice firms? o Stocks -- common (including Ameriprise Financial), preferred, convertible preferred, short sales, rights or warrants o Corporate bonds (including convertible and foreign) o State and local municipal bonds o Derivatives, including futures, options and index securities o Limited partnerships (if purchased through a brokerage account) o Unit Investment Trusts (UITs), American Depository Receipts (ADRs) and Real Estate Investment Trusts (REITs), Exchange Traded Funds and closed-end funds. o Managed or wrap accounts in which individual securities are held and the investor has the ability to exercise trading discretion o Proprietary Funds must be held through Ameriprise Financial Brokerage, Ameriprise Financial 401(k) Plan, "at fund" (directly with the Mutual Fund), or underlying a variable annuity or variable life insurance contract from IDS Life Insurance Company or another affiliate of Ameriprise Financial. What investments are not subject to this limited choice policy? Some investments are not subject to this policy, and therefore, do not need to be transferred. You may continue to hold the following investments in brokerage accounts at other firms: o Non-proprietary Funds o Annuities o Certificates of Deposit, savings certificates, checking and savings accounts and money market accounts o Commercial paper o Dividend reinvestment plans o Employer sponsored incentive savings plans o US Government bonds (U.S. Treasury notes, bills, bonds, STRIPS, savings bonds) o Church bonds o Limited Offerings / Private Placements (These transactions require specific preclearance-see page 22) o Managed or wrap accounts that do not include individual securities Exceptions to Limited Choice Exceptions to the limited choice policy of conducting personal trading through one of the three authorized brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch - will be rare. If you believe your situation warrants an exception, print and complete the Exception Request Form found on page 46. If you are granted an exception you are responsible for ensuring that Personal Trade Compliance receives duplicate confirmations and statements. An exception to the limited choice policy does not eliminate the need to comply with the rest of this Investment Adviser Code of Ethics. 15 Additional Rules & Reporting Requirements Preclearance of Security Trades You must obtain prior approval - known as preclearance - when trading in any of the investment vehicles indicated on the "Securities Reporting and Preclearance Chart" (see pages 19-21). When requesting preclearance, you must follow these procedures: Requesting preclearance - On the day you intend to purchase or sell a security requiring preclearance, complete Section A of the Preclearance Form (see form on page 18) and fax it to the equity trading desk on H17 at (612) 671-5101 between 8 AM and 3 PM. Central Time. Approval process - Before approving the transaction, the trading desk will verify that there are no managed or owned accounts trading in the security. For example, the trading desk verifies there is no same day or opposite way/previous day trading in that security. The trade desk will complete Section B of the preclearance form and fax it back to you. Preclearance is only effective for the day it is given. After Hours Trading (On-line) - When trading through an on line account you have until midnight the day you are granted preclearance to enter your trade. When routing your preclearance form to Personal Trade Compliance, please attach a copy of your electronic confirmation from your broker showing that the trade was entered on the day preclearance was given. The trade then needs to be executed no later than the next business day. We will not consider the trade in good form unless both documents are submitted. Execution of your trade - Complete Section C of the preclearance form upon execution of the trade and route it to Personal Trade Compliance immediately. The entire approval section must be complete in order for the preclearance form to be accepted in good order. If any portion of the form is incomplete, it may result in a preclearance violation. Even if the trade is not executed, you are still required to send the form to Personal Trade Compliance. Local approval process necessary for individuals in the Los Angeles office - An additional level of preclearance approval is required in Los Angeles before executing a trade because of unique considerations with the CDO/CLO business. See your local Compliance Officer for more information. Offices Using Team Management Approach For a special rule applying to all employees in the satellite offices using a team-based management approach, see page 30 under "Offices Using Team Management Approach". 16 Exceptions Exceptions may be granted if the individual has tried to preclear a trade at least three times in any five consecutive day period. In order to be granted this exception, you must request approval by sending your request via Lotus Notes addressed to: Personal Trading. Provide a written explanation of the circumstances, including: o The type of trade o The name of the security o The number of shares o Your position, such as trader, analyst, portfolio manager, other. o The three most recent dates you have tried to preclear You will receive a written response to your request within 24 hours. If you receive an exception, the exception is only for the preclearance portion of your trade. You are still responsible for ensuring compliance with the other rules in this Investment Adviser Code of Ethics, including the 60-day holding period and the 7-day black out period rules as they apply to you. 17 Request for Personal Trading Preclearance
A. Request for Trade Approval (completed by employee): Employee's First Middle Last Name: ___________________ Name: _______________________ Initial: ______ Extension: ____________________ Fax Number: ______________________________ Brokerage Firm: Approved |_| AMP Brokerage |_| Merrill Lynch |_| Schwab |_| Exception: ____________ (specify firm name) Account Number: ___________________________ Type of Trade: |_| Buy |_| Sell |_| Short Sale Ticker:__________________ B. Trade Authorization (completed by trade desk - H17) Equity/option authorized? |_| Yes |_| No Equity/option traded same day? |_| Yes |_| No Equity traded previous day opposite way? |_| Yes |_| No Option traded previous day opposite way? |_| Yes |_| No Request Approved? |_| Yes |_| No Approved by: ______________________ Date/Time (EST): ______________________ Log Number: __________________________ C. Trade Execution (completed by employee) |_| Trade Executed |_| Trade Not Executed Quantity: ___________ Price: ___________
Three Step Preclearance Request Process 1. EMPLOYEE: Complete Section A - Request for Trade Approval and fax Request for Personal Trading Preclearance to the Equity Trade Desk at (612) 671-5101 between 8 AM and 3 PM Central Standard Time. 2. EQUITY TRADE DESK: Complete Section B - Trade Authorization and fax Request for Personal Trading Preclearance back to employee. 3. EMPLOYEE: Complete Section C - Trade Execution and fax (612) 678-0150 or route (H26/1880) a copy of the completed Request for Personal Trading Preclearance to the Personal Trade Team immediately, regardless of whether or not the trade is executed. Please refer to pages 16-17 of the Investment Adviser Code of Ethics for Investment Access Persons for questions regarding preclearance requirements. 18 Securities Reporting for Investment Access Persons
----------------------------------------------------------------------------- This chart indicates which securities must be Is reporting required for Is Preclearance Required? disclosed with your initial and annual these transactions? certification. - ------------------------------------------------------------------------------------------------------------------------------ American Depository Receipts/Shares/Units Yes Yes (against underlying security and ADR/ADU) (ADRs/ADSs/ADUs) - ------------------------------------------------------------------------------------------------------------------------------ Annuities - Fixed No No (other than market value adjusted annuities) - ------------------------------------------------------------------------------------------------------------------------------ Annuities - Variable and market value adjusted Yes No annuities Except for portfolio managers, fixed income sector team leaders or sector team managers, Senior Vice President of Fixed Income Investments and Chief Investment Officer. (see page 32) - ------------------------------------------------------------------------------------------------------------------------------ American Express Stock Yes Yes - ------------------------------------------------------------------------------------------------------------------------------ (Options on) American Express Stock (i.e., puts Ban has been lifted due to Ban has been lifted due to spin off and calls) spin off - ------------------------------------------------------------------------------------------------------------------------------ American Express stock options (obtained as a Yes Yes part of an incentive plan) - ------------------------------------------------------------------------------------------------------------------------------ Ameriprise Financial Stock * Yes No Except Executive Leadership Team need to preclear with the Corporate Secretary's office. - ------------------------------------------------------------------------------------------------------------------------------ (Options on) Ameriprise Financial Stock (i.e., Prohibited Prohibited puts and calls)* - ------------------------------------------------------------------------------------------------------------------------------ Ameriprise Financial stock options (obtained as Yes No a part of an incentive plan)* Except Executive Leadership Team need to preclear with the Corporate Secretary's office - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: corporate Yes No - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: convertible Yes Yes (against both underlying stock & convertible debt) - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other direct debt instruments of the No No U.S. Government: (e.g. Treasury notes, bills, bonds or STRIPS) - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: U.S. Yes No Guaranteed or of federally sponsored enterprises (FHLMC, FNMA, GNMA, etc.) - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: Municipal Yes No - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: Church Yes No - ------------------------------------------------------------------------------------------------------------------------------ Bonds and other debt instruments: closely held Yes No - ------------------------------------------------------------------------------------------------------------------------------ Bank certificates of deposit, Savings No No Certificates, checking and savings accounts and money market accounts, bankers' acceptances, commercial paper and high quality short-term debt instruments, including repurchase agreements. - ------------------------------------------------------------------------------------------------------------------------------ Closed-end funds: including registered fund of Yes Yes hedge funds - ------------------------------------------------------------------------------------------------------------------------------
19
----------------------------------------------------------------------------- This chart indicates which securities must be Is reporting required for Is Preclearance Required? disclosed with your initial and annual these transactions? certification. - ------------------------------------------------------------------------------------------------------------------------------ Derivatives (DECS, ELKS, PRIDES, etc.) Yes Yes (against both underlying stock & derivative) - ------------------------------------------------------------------------------------------------------------------------------ Futures: commodity, currency, financial, or Yes No stock index - ------------------------------------------------------------------------------------------------------------------------------ Index Securities - (S&P 500, SPDRS/SPY, Yes Yes Diamonds/DIA, Cubes/QQQ, etc., Exchange Traded (except broadly based Index securities, Funds, Holders Trusts defined as 20 or more names) - ------------------------------------------------------------------------------------------------------------------------------ Life Insurance (variable) Yes No Except for portfolio managers, fixed income sector team leaders or sector team managers, Senior Vice President of Fixed Income Investments and Chief Investment Officer. (see page 32) - ------------------------------------------------------------------------------------------------------------------------------ Limited Offerings / Private Placements - Equity Yes - on quarterly form Yes and Fixed Income - ------------------------------------------------------------------------------------------------------------------------------ Limited Partnerships Yes Yes - ------------------------------------------------------------------------------------------------------------------------------ Limit order Yes Yes, must renew daily - ------------------------------------------------------------------------------------------------------------------------------ Managed or wrap accounts: o If individual securities held and Yes Yes investor has ability to exercise trading discretion Yes No o If individual securities held and investor does not have ability to exercise trading discretion Yes No o If individual securities not held - ------------------------------------------------------------------------------------------------------------------------------ Mutual Funds (other than money market mutual Yes No funds) Except for portfolio managers, fixed income sector team leaders or sector team managers, Senior Vice President of Fixed Income Investments and Chief Investment Officer. (see page 32) - ------------------------------------------------------------------------------------------------------------------------------ Money market mutual funds No No - ------------------------------------------------------------------------------------------------------------------------------ Options on stocks Yes Yes (except to close position in the last 5 business days before expiration) - ------------------------------------------------------------------------------------------------------------------------------ Options: exercise of option to buy or sell Yes No underlying stock - ------------------------------------------------------------------------------------------------------------------------------ Options on futures and indices (currency, Yes Yes financial, or stock index) - ------------------------------------------------------------------------------------------------------------------------------ REITS (Real Estate Investment Trusts) Yes Yes - ------------------------------------------------------------------------------------------------------------------------------ Stocks: common or preferred (you do not need Yes Yes to report Dividend Reinvestment Plans - DRIPS unless you are a grade 45 or above) - ------------------------------------------------------------------------------------------------------------------------------ Stocks: convertible preferred Yes Yes (both underlying stock and convertible preferred) - ------------------------------------------------------------------------------------------------------------------------------ Stocks: short sales (short sales prohibited Yes Yes on Ameriprise Financial stock) - ------------------------------------------------------------------------------------------------------------------------------ Stocks (owned) - exchanges, swaps, mergers, Yes No tender offers - ------------------------------------------------------------------------------------------------------------------------------
20
----------------------------------------------------------------------------- This chart indicates which securities must be Is reporting required for Is Preclearance Required? disclosed with your initial and annual these transactions? certification. - ------------------------------------------------------------------------------------------------------------------------------ Stocks - public offerings (initial OR secondary) Prohibited Prohibited - ------------------------------------------------------------------------------------------------------------------------------ Stocks - Rights or warrants acquired separately Yes Yes - ------------------------------------------------------------------------------------------------------------------------------ Unit Investment Trusts (UITs) Yes No - ------------------------------------------------------------------------------------------------------------------------------
* Incentive awards of Ameriprise Financial stock options, restricted stock and portfolio grants and the sale through Ameriprise Financial of a part of these shares to cover taxes at the time of vesting or exercise are subject to reporting. In addition, other holdings, purchases and sales of Ameriprise Financial stock are required to be reported. Special note for 401(k)'s: reporting is required for any 401(k) or an employer sponsored incentive savings plan held by the Access Person. For any 401(k) held by a spouse who is not also an Access Person, reporting is only required on Ameriprise Financial / RiverSource Proprietary Fund holdings or any other reportable security indicated above. In other words, an Access Person does not need to report Non-proprietary Funds held in a spouse's 401(k) plan. Special note for automatic investment plans: you do not need to report transactions that are made as part of a regular periodic purchase (or withdrawal). For example: payroll deduction, bank authorizations etc. 21 Limited Offerings (Private Placement) Preclearance - Equity and Fixed Income All Access Persons need to obtain approval to invest in any Limited Offerings (private placements), i.e., a security not offered to the public. Approvals must be obtained in writing from your immediate leader, the Chief Investment Officer (CIO), and Personal Trade Compliance prior to investing. How to obtain approval - Write an explanation of the investment and submit the request to your leader. Included in the request should be an explanation of: o the nature of the investment o how you were solicited o approximate dollar amount you are planning to invest o whether or not the opportunity was being offered to any of Ameriprise Financial / RiverSource's managed accounts o whether the security is likely to be purchased by an Ameriprise Financial / RiverSource managed account in the future. In considering whether to make a request, consider whether your investment might create a conflict with a business interest of Ameriprise Financial. See the Ameriprise Financial Code of Conduct and the Compliance Resource Guide. How Limited Offerings/private placements are approved - Your leader will approve or reject your request, and return the request to you. If approval is granted, send the request to the CIO for approval. If the CIO grants approval, send the request via lotus notes to "Private Placement Preclearance". You cannot enter into the proposed transaction without approval from Personal Trade Compliance. Personal Trade Compliance will respond to you requesting any additional information or further documentation needed to make a decision. Upon receipt of all necessary documentation, Personal Trade Compliance will then confirm in writing whether you can invest. If your investment is approved, you must report the investment on the quarterly reporting form, which will be provided to you. If you have questions about how the private placement approval process applies to a transaction you are considering, please contact us by sending a lotus note to "Personal Trading" or call us at 612-671-5196 before you invest. 22 60-Day Holding Period for Mutual Funds No Access Person may sell shares of a Mutual Fund (including Proprietary Mutual Funds and Non-Proprietary Mutual Funds) held for less than 60 calendar days. You must wait until calendar day 61 (Trade date + 60) to sell or redeem all or part of your position. This prohibition applies across all accounts in which you have a beneficial interest (so that you cannot buy shares of a Mutual Fund in one account and sell them from another account within 60 days, unless the transactions fall within the exceptions set forth below). When calculating the 60-day holding period, you must use the last-in, first-out (LIFO) method. We use LIFO for two main reasons: o the purpose of the rule is to discourage market timing. A first-in, first-out (FIFO) or specific identification method could enable short-term trading. o application of a method other than LIFO could be very cumbersome and time-consuming. Exceptions The Firm grants four exceptions to this rule: o Money Market Funds - investments in money market funds are not subject to the 60-day holding period. o Automatic Investment and Withdrawal Programs - automatic investment and withdrawal programs such as payroll deduction programs are not subject to the 60-day holding period o Dividend Reinvestments - purchases of shares of a Mutual Fund through the reinvestment of dividends or capital gain distributions on such fund are not subject to the 60-day holding period. o ERISA Accounts - shares of a Mutual Fund held through an ERISA account, such as a 401(k) account, are not subject to the 60-day holding period. Note, however, that the prohibition on market timing of Mutual Funds continues to apply to such accounts. o Death of Account Owner - sales by the estate of a deceased account owner, or by the beneficiary of a transfer-on-death (TOD) or similar account, of shares of a Mutual Fund purchased by the owner before the owner's death are not subject to the 60-day holding period. If the shares are held in an account with a broker or Mutual Fund that requires transfer of the shares from an account in the name of the deceased to an account in the name of the estate or the beneficiary before sale of the shares by the estate or beneficiary, the transfer and sale of the shares are not subject to the 60-day holding period. o Special Exceptions - The Personal Trade Committee may grant exceptions as a result of death, disability, significant market downturn or other special circumstances (such as periodic rebalancing). To request a special exception, send a written request or Lotus note to Personal Trading. Your request will not be approved unless the Personal Trade Committee determines that, under the circumstances, the requested exception is consistent with the best interests of the Firm and the shareholders of the Mutual Fund. If you have questions about the 60-day holding period, please contact us by sending a Lotus note to Personal Trading or call us at x15196 before you execute. None of these exceptions allow you to engage in market timing of Mutual Funds. 23 Failure to completely and accurately disclose brokerage & Mutual Fund accounts, holdings and quarterly non-brokerage activity by the time frames specified by Personal Trade Compliance is a violation of the Code and may result in a sanction, which includes possible termination. Initial Holdings Disclosure New Access Persons must disclose certain securities holdings in which they have a beneficial interest. All new Access Persons will receive a copy of the Code of Ethics that applies to them and that includes an Account Certification and Holdings Disclosure form. This document must be returned to Personal Trade Compliance H26/1880 within 10 days. An example of this form is located on pages 42-43. Annual Certification and Annual Holdings Disclosure In addition to reporting requirements already outlined, every Access Person must submit an annual certification form. If you are new to the company, you will receive a form and instructions when you attend your orientation session. If you do not attend this orientation session, please contact the Personal Trade area 612-671-5196 for the information. All Access Persons must also disclose annually certain securities holdings in which they have a beneficial interest. Failure to disclose annual holdings by the time frames specified by Personal Trade Compliance may result in a sanction, which includes possible termination. All Access Persons will receive a form electronically on an annual basis from Personal Trade Compliance. You should document your account(s) certification and holdings disclosures on this form. Quarterly Reporting and Certification Personal Trade Compliance will send you a form each quarter to indicate whether, for a given calendar quarter, you executed securities transactions outside of a broker-dealer account or engaged in transactions in Mutual Funds as identified on the quarterly reporting form. You must return the quarterly reporting form to Personal Trade Compliance within 30 calendar days of the last day of the quarter. You will also be asked to certify quarterly that you have complied with the provisions of this Code of Ethics relating to transactions in Mutual Funds including prohibitions on market timing and the misuse of material non-public information relating to Mutual Funds, including information relating to portfolio contents or pricing. 24 Investment Clubs There is no prohibition against joining an investment club and the account needs to be held at one of the limited choice brokers, Ameriprise Financial Brokerage, Schwab or Merrill Lynch, unless the club has been granted an exception from Compliance. Investment Access Persons who are members of investment clubs are required to preclear club transactions. Execution of non-precleared trades made by club members will result in a violation for the Investment Access Person. (This also applies to any other accounts which meet the criteria indicated under "security activities which need to be reported" on page 14) When forming or joining an investment club, provide the following to Personal Trade Compliance: o a copy of the Brokerage Account Notification Form (see page 45) o a copy of your investment club's bylaws o a listing of the members of the club and an indication if any members are employees, independent contractors or associated persons of Ameriprise Financial. Please include the individual's employee, Advisor, or contractor identification number. o the contact person for the club in case of questions Giving Securities If you are giving securities to a non-profit organization, please provide the following information in writing prior to making the gift, to Personal Trade Compliance: o the name of the organization to which you are giving the securities o a description of the security o the number of shares being given o the day you intend to buy the security (if not already owned) o the day you intend to give the securities (if the gift was not actually given on the day intended, please inform Personal Trade Compliance) Preclearance is not necessary for a gift to a non-profit organization, and the 60-day and 7-day rules do not apply. For giving securities to a for-profit organization or to an individual or trust, the preclearance and 7-day rules do apply if you are purchasing the securities you intend to give. The 60-day rule does not apply. You will need to report the transaction on the quarterly reporting form described above. 25 Sanctions Sanctions will be imposed for violations of Ameriprise Financial, SEC, or NASD rules or policies. These sanctions are communicated via violation letters and may vary depending on the severity of the violation, if a record of previous violations exists and/or the violation was self-reported. Examples of potential sanctions include (but are not limited to): o a written reminder about the rules (with a copy to the individual's manager) o notification to your broker to freeze your account from any buy-side trading. This is a typical sanction if you fail to move your account(s) to one of the three limited choice brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch. The account could then be used only for transfers and liquidations. o prohibition against personal trading for a specific period of time o forfeiture of trading profits o monetary fine o negative impact on the individual's bonus or other compensation and or performance rating o termination A written record of each violation and sanction is maintained by Personal Trade Compliance. Unusual Trading Activity The Personal Trade Committee and your department head review your personal trading activity regularly. We may ask to review specific transactions with you or your broker if clarification is necessary. You may also be asked to supply Personal Trade Compliance with a written explanation of your personal trade(s). Examples of situations that may require a memo of explanation include, but are not limited to: o violations of personal trading rules o trades in a security shortly before our Investment Department trades in the same security on behalf of a client o patterns of personal trading that are similar to your clients' trading o significant changes in trading volume o patterns of short-term, in and out trading o significant positions in illiquid securities o a number of employees trading in the same security in the same time frame 26 Incremental Restrictions and Requirements for Investment Personnel (see definition on page 12) 60-Day Holding Period for Individual Securities* Profiting from short-term trading is prohibited. You may not buy, then sell (or sell short, then cover the short) the same securities (or equivalent) within 60-calendar days, while realizing a gain. You must wait until calendar day 61 (Trade date + 60) to close out your position if you will be making a profit. When calculating the 60-day holding period, you must use the last-in, first-out (LIFO) method. We use LIFO for two main reasons: o the purpose of the rule is to discourage short-term trading. A first-in, first-out (FIFO) or specific identification method could encourage short-term trading. o application of a method other than LIFO could be very cumbersome and time-consuming. Exceptions The Firm grants three exceptions to this rule: o Small Trade - defined as $10,000 or less of S&P 500 securities or ten option contracts in S&P 500 securities. There is a limit of one small trade exception per calendar month. Please indicate on your preclearance form "small trade exception". The small trade exception still requires you to obtain preclearance. o Futures and Indices - due to the size and liquidity of certain markets, the following investment vehicles are exceptions to the 60-day holding period requirement and do not need to be precleared: - financial futures (e.g., Treasury bond futures) - stock index futures (e.g., S&P 500 index futures) - currency futures (e.g., futures on Japanese Yen) This exception also applies to options on futures and indices. Options on equities continue to be subject to the 60-day rule. * This is separate from the 60-day holding period for Mutual Funds. 27 Incremental Restrictions and Requirements for Investment Personnel o Financial Hardship - a financial hardship must be an "immediate and heavy financial need" and must be a situation where funds are not readily available from other sources. Financial hardships must meet the criteria outlined in the Ameriprise Financial 401(k) Plan. Hardships are further subject to the following stipulations: o The amount traded may not exceed the amount required to meet the financial hardship, though the trade amount may include an amount for anticipated income taxes and tax penalties. Please consult with your tax advisor for advice. o You must receive approval from Personal Trade Compliance before a hardship trade. Begin by calling x15196 for assistance. You will need to put your request in writing and to route it to Personal Trade Compliance. You will receive a response within two business days. o Your request may not be approved if the standards outlined above are not met. If you have questions about the 60-day holding period please contact us by sending a lotus note to "Personal Trading" or call us at x 15196 before you execute. 28 Incremental Restrictions and Requirements for Investment Personnel Research Analysts: Additional Rules Research Analysts must conduct their personal trading activities in a manner such that transactions for an analyst's customers, clients, and employer have priority over transactions in securities or other investments of which he or she is the beneficial owner. In order to clarify how Research Analysts at Ameriprise Financial should comply with this requirement, please note the following: General Rules for all Analysts o For Minneapolis based analysts, all new investment recommendations or changes in recommendations should be communicated immediately through Research Notes. Other appropriate means of communication should be used in addition to Research Notes to facilitate broad and immediate dissemination of the recommendation. For offices not using Research Notes, the analyst must document their investment recommendations in writing in the form required by their leader. o Analysts should not trade a security in their own account if they anticipate issuing a new recommendation or changing an existing recommendation on the same security. o Analysts should not trade in a security for their own account contrary to their current recommendation with respect to the security or rating. o Analysts should not trade in a particular security in their own account for a period of 2 business days after a written recommendation with regard to that security is disseminated through the Research Notes section of Lotus Notes or by other means. o Analysts who recommend a "paired trade" to a Hedge Fund will be held to the 7-day blackout rule. (See page 31 for definition of 7-day blackout rule.) o Dedicated analysts supporting one or more of the Hedge Funds are considered part of a "team management" group and are held to the 7-day blackout rule for all trades made in the funds. (See page 31 for definition of 7-day blackout rule.) 29 Incremental Restrictions and Requirements for Investment Personnel Offices Using Team Management Approach In an effort to remain consistent across offices who use a team-based approach where research analysts and others are actively involved in portfolio management discussions and decisions, the 7-day blackout rule (see page 31 of this Investment Adviser Code of Ethics) will apply to all personnel in those offices. Note that this process does not take the place of the standard preclearance process but is in addition to preclearance. Looking Back 7 Days To avoid a potential violation, each time an employee wants to make a personal trade s/he should check with their local Compliance Officer, to make sure there has been no trading in the security for a portfolio advised account (for that particular office) in the past 7 days. If there has been a trade in the past 7 days and the employee proceeds to trade, this trade will be considered a violation. Looking Ahead 7 Days To avoid a potential violation, we recommend that the employee communicate with each of the Portfolio Managers about the potential trade to determine whether the Portfolio Manager anticipates any activity in that security in the next 7 days within the portfolio. When an employee's personal trade in a name occurs within the 7-day window before a trade in the same name for an advised account, this will be flagged as a potential violation. Compliance will then determine from the Portfolio Manager whether the individual who conducted the personal trade was privy to the information about the impending advised account trade. The accountability will be on the employee to explain why the personal trade should not be considered a violation. If you have any questions about the process, contact your local Compliance Officer. 30 Incremental Portfolio Manager Requirements and Restrictions 7-Day Blackout Period Portfolio managers are not allowed to buy or sell a security during the seven-day blackout period, which is defined as: o trade date less seven calendar days before and trade date plus seven calendar days after a fund or account they manage trades in that same (or equivalent) security. This means a portfolio manager must wait until calendar day 8. For example, a portfolio manager's fund trades XYZ Co. on August 12. The last day for a personal trade of XYZ Co. is August 4 and the next day a personal trade can be made is August 20. This rule includes all individual portfolio trades as well as program trades, except for pattern accounts. Exceptions The Firm grants two exceptions to this rule: o Small trades - defined as $10,000 or less of S&P 500 securities or ten option contracts in S&P 500 securities. There is a limit of one small trade exception per calendar month. Please indicate on your preclearance form "small trade exception". The small trade exception still requires you to obtain preclearance. o Futures and Indices - due to the size and liquidity of certain markets, the following investment vehicles are exceptions to the 7-day blackout period rule and do not need to be precleared: o financial futures (e.g., Treasury bond futures) o stock index/futures (e.g., S&P 500 index/futures) o currency futures (e.g., futures on Japanese Yen) This exception also applies to options on futures and indices. Options on equities continue to be subject to the 7-day blackout rule. If you have questions about how the 7-day blackout rule applies to a trade you are considering, please contact us by sending a lotus note to "Personal Trading" or call our hotline at x 15196 before you execute your trade. 31 Incremental Portfolio Manager Requirements and Restrictions Preclearance of Proprietary Mutual Fund Trades Equity portfolio managers (including associate portfolio managers) and fixed-income sector leaders and managers must obtain prior approval - known as preclearance - when buying or redeeming or otherwise trading in shares of any Proprietary Mutual Fund for which the portfolio manager or sector leader's or manager's team manages at least part of the portfolio. The Senior Vice President-Fixed Income and the CIO must obtain preclearance when trading in shares of any Proprietary Mutual Fund. When requesting preclearance, you must follow these procedures: Approvals must be obtained in writing from the CIO and from Personal Trade Compliance prior to investing. How to obtain approval - Write an explanation of the investment and submit the request to the CIO (except that, for investments by the CIO, the CIO should send the request directly to "Personal Trading" via Lotus notes). Included in the request should be an explanation of: o The Mutual Fund you intend to purchase or sell o The date of your last transaction in the Mutual Fund o Your certification that the transaction will not result in a 60-day holding period violation in any accounts where you have a beneficial interest. o Your certification that the transaction will not result in the use of material non-public information relating to the portfolio contents or pricing of the Proprietary Mutual Fund. How Proprietary Mutual Fund transactions are approved - The CIO will approve or reject your request, and return the request to you. If approval is granted, send the request via Lotus notes to "Personal Trading". Personal Trade Compliance will respond to you, requesting any additional information or further documentation needed to make a decision. Upon receipt of all necessary documentation, Personal Trade Compliance will then confirm in writing whether you can engage in your transaction If you have questions about how the Proprietary Mutual Fund approval process applies to a transaction you are considering, please contact us by sending a Lotus note to "Personal Trading" or call us at x 15196 before you invest. Exceptions: o Automatic Investment and Withdrawal Programs - automatic investment and withdrawal programs such as payroll deduction programs are subject to the Proprietary Mutual Fund preclearance requirement only at the time such a program is established or modified. 32 Responsibilities of the Chief Compliance Officer, or their delegate, related to Personal Trading Process and Responsibility The Chief Compliance Officer, or their delegate, has primary responsibility for enforcing the Code. The Personal Trade Committee (PTC) reviews all alleged personal trading violations and any sanctions applied. If the alleged violator is the Chief Compliance Officer, the matter must be reported to the PTC and the General Counsel of the firm. Opportunity to Respond A person charged with a violation of the Code shall have the opportunity to appear before the person or persons enforcing the Code and to respond to all charges, orally or in writing. Initial Holdings Report; Annual Holdings Report The Chief Compliance Officer, or their delegate, shall review and maintain all initial and annual holdings reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Quarterly Personal Trading Reports The Chief Compliance Officer, or their delegate, shall review and maintain all quarterly transaction reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate deems necessary to enforce the provisions and intent of this Code. Pre-Clearance The Chief Compliance Officer, or their delegate, shall review and approve or disapprove all Access Person requests to pre-clear securities transactions. Such review shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Violations or Suspected Violations If the Chief Compliance Officer, or their delegate becomes aware of a violation or suspected violation of the Code as a result of such review, the Chief Compliance Officer, or their delegate, shall take whatever steps deemed necessary to enforce the provisions of the Code, including consulting with outside counsel. Record Retention Records are required to be kept for seven years (a minimum of two years on site). 33 Ameriprise Financial Insider Trading Policy Ameriprise Financial's Statement of Policy and Procedures with Respect to the Receipt and Use of Material Non-Public Information This statement represents the policy of Ameriprise Financial, Inc. and its affiliates (collectively "Ameriprise Financial")(1) with regard to the receipt and use of material non-public information. If you have any questions or comments about this policy, please contact either the General Counsel's Office (the "GCO") or the Compliance Department using the contact information provided at the end of this policy. A. General Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), Rule 10b-5 enacted thereunder and court and Securities and Exchange Commission ("SEC") administrative decisions interpreting these and other relevant provisions make it unlawful for any person to trade or to recommend trading in securities while in the possession of material non-public ("inside") information. More specifically, the above-referenced provisions and interpretations make it unlawful for a corporate insider to trade while in the possession of inside information. They also make it unlawful for someone who is not a corporate insider to trade while in possession of inside information, when the information is disclosed to the non-insider in violation of an insider's duty to keep it confidential, when the non-insider has a duty to keep the information confidential or when the information is misappropriated (i.e., stolen). Finally, communicating material non-public information to others generally is unlawful. In light of the above and in compliance with the requirements of Section 204A of the Investment Advisers Act of 1940 (the "Advisers Act"), Rule 206(4)-7 enacted thereunder and the Insider Trading & Securities Fraud Enforcement Act of 1988 (the "Enforcement Act"), Ameriprise Financial prohibits any director, officer, principal or associated person from trading on the basis of or otherwise misusing inside information. The material that follows provides further explanation of what constitutes inside information and of the prohibition on its misuse. The description below is not exhaustive and does not cover every situation. You should contact the GCO or the Compliance Department if you have questions or concerns. B. What is "Inside Information"? The term "inside information" is broadly construed by the courts and regulatory authorities. Generally, it includes "material" information, which is "non-public" and has been provided on a confidential basis or in breach of a fiduciary duty. It includes information about a company or another issuer (including a government entity) or the market for the company's or other issuer's securities that has come directly or indirectly from the company or other issuer and that has not been - -------- 1 For purposes of clarity, this statement does not apply to Threadneedle Asset Management Holdings Ltd. and its subsidiaries, each of which has its own insider trading policies and procedures. 34 disclosed generally to the marketplace. In addition to the issuer, inside information can come from persons with access to the information, including not only the issuer's officers, directors and other employees, but also its auditors, investment bankers and attorneys. Consultants to the issuer or to Ameriprise Financial are other examples of persons who might be sources of inside information. Material Information: Information is "material" if its dissemination is likely to affect the market price of any of the company's or other issuer's securities or is likely to be considered important by reasonable investors, including reasonable speculative investors, in determining whether to trade in such securities. Other information may or may not be material, depending on its specificity, its magnitude, its reliability and the extent to which it differs from information previously publicly disseminated. Though there is no precise, generally accepted definition of materiality, information is likely to be material if it relates to significant changes affecting matters such as: 1. Dividend or earnings expectations; 2. Changes in previously released earnings estimates; 3. Write-downs or write-offs of assets; 4. Additions to reserves or bad debts or contingent liabilities; 5. A significant increase or decrease in orders; 6. Expansion or curtailment of company or major division operations; 7. Proposals or agreements involving a joint venture, merger, acquisition, divestiture or leveraged buy-out; 8. A purchase or sale of substantial assets; 9. New products or services; 10. Exploratory, discovery or research development; 11. Criminal indictments, civil litigation or government investigation; 12. Disputes with major suppliers or customers; 13. Labor disputes including strikes or lock-outs; 14. Substantial changes in accounting methods; 15. Debt service or liquidity problems; 16. Extraordinary borrowings; 17. Bankruptcy or insolvency; 18. Extraordinary management developments; 19. Public offerings or private sales of debt or equity securities; 20. Calls, redemptions or purchases of the company's own stock; 21. Issuer tender offers; or 22. Recapitalizations. If you are dealing with such information, presume it is material and contact the GCO or the Compliance Department so they can assist you in determining whether it is in fact material. Inside information about a company or other issuer can also be material because of its expected effect on a particular class of a company's securities, all of the company's securities, the securities of another company or issuer or the securities of several companies or issuers. Moreover, the resulting prohibition against the misuse of inside information reaches all types of securities (whether stock or other equity interests, corporate debt, government or municipal obligations, or commercial paper) as well as any option related to that security (such as a put or call, or an index security if the nonpublic information is material to the index security). 35 Non-public Information: In order for information to qualify as inside information, it must not only be material, it must be "non-public." Non-public information is information that has not been made available to investors generally. It includes information received in circumstances indicating that it is not yet in general circulation. It also includes situations in which the recipient knows or should know that the information could only have been provided directly or indirectly by the issuer or its insiders. Once material non-public information has been released to the investing public, it loses its status as inside information. However, for non-public information to become public, it must be disseminated through recognized channels of distribution designed to reach the securities marketplace. To show that material information is public, you should be able to point to some fact verifying that the information has become generally available. For example, disclosure in a national business and financial wire service (e.g., Dow Jones or Reuters), by a national news service (e.g., the Associated Press or United Press International) publication in a local newspaper, in a national newspaper (e.g., The Wall Street Journal or The New York Times) or in a publicly disseminated disclosure document (e.g., a proxy statement or a prospectus) would all be sufficient to consider the information generally available. The circulation of rumors or "talk on the street," even if accurate, widespread and reported in the media, does not constitute the requisite public disclosure. Furthermore, material non-public information is not made public through selective dissemination. See the Portfolio Holdings Disclosure policy for applicable procedures and additional information. Material information disclosed only to institutional investors or to a fund analyst or a favored group of analysts generally retains its status as non-public information and must not be disclosed or otherwise misused. (Please consult with the GCO or the Compliance Department if an issuer or its agent, such as its investment banker, mistakenly discloses non-public information to investors.) Similarly, partial disclosure does not constitute public dissemination. As long as any material component of the inside information possessed by any director, officer, principal or associated person of Ameriprise Financial has yet to be publicly disclosed, the information is non-public and trades based on such information are prohibited. Information Provided in Confidence: Occasionally, one or more directors, officers, principals or associated persons of Ameriprise Financial may become temporary insiders because of a fiduciary or commercial relationship with another company. For example, personnel at Ameriprise Financial may temporarily become insiders when an external source, such as a company or officer of a company, entrusts material non-public information in connection with a commercial relationship or transaction to a director, officer, principal or associated person of Ameriprise Financial with the expectation that the information will remain confidential. 36 As an insider, we have a fiduciary obligation not to breach the trust of the party that has communicated the inside information by misusing that information. This fiduciary duty arises because we have entered or have been invited to enter into a commercial relationship with another company and have been given access to confidential information solely for the corporate purposes of such company. This obligation remains whether or not we ultimately participate in a transaction related to the information we are given. Information Disclosed in Breach of a Duty (Tipper and Tippee Liability): Directors, officers, principals or associated persons of Ameriprise Financial must be especially wary of inside information disclosed in breach of a corporate insider's fiduciary duty. Even when there is no expectation of confidentiality, you may become an insider upon receiving material non-public information in circumstances in which you know or should know that a corporate insider is disclosing information in breach of the fiduciary duty he or she owes his or her company and its shareholders. Whether the disclosure is an improper "tip" that renders the recipient a "tippee" depends on whether the corporate insider expects to benefit personally, either directly or indirectly, from the disclosure. In the context of an improper disclosure by the corporate insider, the requisite "personal benefit" is not limited to a business or future monetary gain. Rather, a prohibited personal benefit may include a reputational benefit, an expectation of a quid pro quo from the recipient or the recipient's employer, or an intention to benefit the recipient or the recipient's employer, through a gift of the inside information. You may, depending on the circumstances, also become an insider or tippee when you obtain material non-public information by happenstance, including information derived from social situations, business gatherings, overheard conversations, misplaced documents and tips from insiders or other third parties. Given the potentially severe regulatory, civil and criminal sanctions to which you, Ameriprise Financial and other Ameriprise Financial personnel could be subject, if you are a director, officer, principal or associated person uncertain as to whether the information you possess is inside information, you should immediately call the GCO or the Compliance Department rather than relying on your own interpretation of the applicable law. Pending a final determination in consultation with the GCO and/or the Compliance Department, the information should be treated as inside information that cannot otherwise be communicated or misused. C. Criminal and Civil Penalties and Regulatory Sanctions for Insider Trading Penalties for misusing inside information are severe. Depending on the circumstances and the adequacy of the relevant procedures, the individual involved, his or her supervisor, the employer's principals, officers, directors and other supervisory personnel could all face substantial regulatory, civil and criminal sanctions. For example, Ameriprise Financial personnel who either trade on inside information or become subject to tipper or tippee liability are subject to the following penalties: 1. A civil penalty of up to three times the profit gained or loss avoided; 2. A criminal fine of up to $5,000,000; and 3. A jail term of up to 20 years. Furthermore, Ameriprise Financial and its supervisory personnel, if they fail to take appropriate steps to prevent insider trading, are subject to the following penalties: 37 1. A civil penalty of up to $1,000,000 or, if greater, three times the profit gained or loss avoided as a result of the employee's violation; and 2. A criminal penalty of up to $2,500,000 for individuals and up to $25,000,000 for Ameriprise Financial. Finally, violations of insider trading laws could result in civil injunctions and a suspension or permanent bar from the securities industry. D. Company Rules Regarding Misuse of Inside Information Listed below are certain Ameriprise Financial rules prohibiting the misuse of inside information. No director, principal, officer or associated person of Ameriprise Financial may violate these rules or authorize or allow any violation of these rules. Anyone who knows or has reason to suspect that these rules have been violated must bring such actual or potential violation to the immediate attention of the Compliance Department. No director, officer, principal or associated person of Ameriprise Financial shall purchase or sell or recommend or direct the purchase or sale of a security for any client or any client's account managed by Ameriprise Financial (including accounts owned by Ameriprise Financial) or for any other person while in possession of insider information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall take advantage of inside information to purchase or sell or recommend or direct the purchase or sale of any security for his or her own account, for any account over which he or she has a direct or indirect beneficial interest (including an account held by or for any family member or family-related trust) or for any client. No director, officer, principal or associated person of Ameriprise Financial shall disclose inside information to any person, unless such disclosure is both authorized and necessary to effectively carry out the project or transaction for which Ameriprise Financial has been approached or engaged. No director, officer, principal or associated person of Ameriprise Financial shall engage in tipping or recommending, whether formally, informally, orally or in writing, the purchase or sale of any security based on inside information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall misappropriate confidential information in connection with the purchase or sale of securities. No director, officer, principal or associated person of Ameriprise Financial shall trade for his or her personal account with the expectation that an account managed by Ameriprise Financial will soon trade in the same security (otherwise known as front-running). No director, officer, principal or associated person of Ameriprise Financial shall give consideration to any inside information furnished by any broker-dealer when recommending the allocation of brokerage to any broker-dealer. However, consistent with Ameriprise Financial's efforts to secure best price and execution, Ameriprise Financial does allocate brokerage business to broker-dealers who are in a position to supplement Ameriprise Financial's research and analysis, in order to corroborate data compiled by Ameriprise Financial's staff and to consider the views and information of others in arriving at its investment decisions. Despite these considerations, it remains Ameriprise 38 Financial's policy that brokerage not be allocated in consideration of the furnishing of inside information. No director, officer, principal or associated person of Ameriprise Financial has any obligation to investment companies or other clients advised by Ameriprise Financial to trade or recommend trading on the basis of material non-public information in their possession. Ameriprise Financial-associated persons' fiduciary responsibility to their clients does not require that they disregard the limitations imposed by the federal securities laws, particularly Rule 10b-5. (The foregoing prohibitions apply not only to securities directly affected by the inside information, but also to any other securities that may be reasonably expected to be indirectly affected by the public disclosure of such information.) In addition to the criminal, civil and regulatory penalties described above, any person who is found to have violated these rules or who is found to have violated a federal or state securities law or regulation related to the misuse of inside information will be subject to serious sanctions by Ameriprise Financial, including termination of employment. The rules outlined above are not meant to be exhaustive of the situations that could potentially give rise to insider trading liability. They are intended to provide examples of the types of situations likely to raise significant issues with respect to the misuse of inside information. Furthermore, these examples should not be taken as a confirmation that insider trading liability would necessarily arise in each situation involving the same or similar facts. Whether such liability exists can only be determined with the assistance of counsel considering all attendant circumstances. Identifying inside information: To assist you in identifying what may be inside information, you should ask the following questions routinely when you receive either confidential commercial information or information disclosed in breach of fiduciary duties: 1. Is the information material? 2. Is the information such that an investor would consider it important in making his or her investment decisions? 3. Is the information such that it would substantially affect the market price of securities if generally disclosed? 4. Is the information non-public? 5. To whom has this information been provided? For example, has the information been effectively communicated to the marketplace through disclosure by the United Press International, the Associated Press or Reuters, or published in The Wall Street Journal or other publications of general circulation? If, after considering the above questions, you believe that the information may be material and non-public, or if you have any questions as to whether its use will violate the law, you should contact the GCO or the Compliance Department using the contact information provided below. Whenever you (or any other Ameriprise Financial-associated person) receive potentially material information about an issuer that you know or have reason to believe is directly or indirectly attributable to the issuer or its insiders, you must determine that the information is public before trading on the basis or while in possession of the information or before divulging the information to any person. The information may, however, be communicated, as provided in this policy, to others who are subject to the same prohibitions on trading. If you have any question at all as to whether the information is material or whether it is inside and non-public, you must resolve the question by contacting the GCO or the Compliance Department before trading. You must not discuss the information with any Ameriprise 39 Financial-associated person other than the business unit compliance officer in the Investment Department, or appropriate contacts in the GCO or the Compliance Department. If there are any unresolved questions in your mind as to the applicability or interpretation of the foregoing standards or the propriety of any desired action, you must discuss the matter with the GCO or the Compliance Department prior to trading or recommending trading. E. Personal Securities Trading The Enforcement Act also requires Ameriprise Financial to establish monitoring and review procedures that are reasonably designed to prevent personnel from misusing inside information. See the Ameriprise Financial Investment Adviser Code of Ethics for applicable procedures and additional information. F. Implementation of this Statement of Policy The respective Senior Vice President for each business department within Ameriprise Financial, in coordination with the Chief Compliance Officer of the applicable investment adviser, is responsible for implementing this Statement of Policy with respect to each of their respective Ameriprise Financial-associated persons. Notwithstanding the foregoing, the Chief Compliance Officer remains ultimately responsible for oversight of the implementation and enforcement of this statement of policy and is available to address any questions or concerns of any director, officer, principal or associated person of Ameriprise Financial. This Statement of Policy will be distributed to all Ameriprise Financial-associated persons and will be issued and explained to all new personnel at the time of their employment with Ameriprise Financial. In addition, at least annually and at such other times as the Chief Compliance Officer of the applicable investment adviser may determine it is necessary or appropriate, representatives of the Compliance Department and/or the GCO will meet with Investment Department personnel to review this Statement of Policy. Any amendments to this policy will also be distributed to all Ameriprise Financial-associated persons. The GCO and the Compliance Department, in coordination with the Chief Compliance Officer, will review this Statement of Policy on a periodic basis and may revise it in the light of developments in the law, questions or interpretation, and practical experience with the procedures contemplated by the Statement. G. Contacts If you have questions or comments about this policy, please contact Investment Department legal counsel in the GCO, or Investment Compliance Department. 40 Forms and Completion Instructions Below are the steps for completing the Initial Personal Account and Holdings Disclosure ("Initial Certification") Form found on pages 42 and 43: 1. Write your name, Social Security number, ID number, and Routing number on the top portion of the form. 2. Check the appropriate box in Section 1. o If you check YES in Section 1, complete all requested information in Sections 2 and 3. o If you check NO in Section 1 and you do not have accounts, but you do have holdings (i.e. physical stock certificate) to report, complete Sections 2 and 3. o If you check NO in Section 1 and you have no accounts and no holdings to report, complete Section 3. o Please note: A brokerage account is an account in which securities are bought and sold (i.e. stock, bonds, futures, options, Mutual Funds etc.). This includes employer-sponsored incentive savings plans. 3. In Section 2, state the firm name, account number, and type of ownership. If securities are held outside of a brokerage account (i.e. physical stock certificate), enter "n/a" in the firm name field. o Direct: You are the owner of the account (i.e., joint, individual or IRA ownership). o Indirect: Accounts in which you have a beneficial interest (see definition below), and that are registered in another person's name. This includes members of your household (e.g., spouse, partner, minor children, etc.). o Club: You are a member of an investment club. o Advised: You have another arrangement where you give advice and also have a direct or indirect ownership. o Managed: You have no discretion over the investments in the account. 4. Sign and date the form in Section 3. 5. Return pages 42 and 43 to Personal Trade Compliance (H26/1880) within 5 business days. ADDITIONAL INFORMATION o You must complete and return this form even if you have no accounts or holdings to disclose. o Brokerage accounts: You must disclose all brokerage accounts you own or in which you have a beneficial interest. This includes Ameriprise Brokerage and accounts held with any other broker. o Mutual Funds: You must disclose all proprietary (RiverSource) and non-proprietary (non-RiverSource) Mutual Funds held direct-at-fund, including variable annuities and variable life insurance. o 401(k)s: Reporting is required for any 401(k), 403(b), or employer-sponsored incentive savings plan held by the Associated Person. For a 401(k) held by a spouse/partner (who is not also associated with Ameriprise), report all holdings excluding non-proprietary funds. o Beneficial Interest: You must disclose accounts in which you have a beneficial interest. This includes accounts held in the name of you, your spouse/partner, or any financially dependent member of your household. Additionally, beneficial interest extends to the following types of accounts if you, your spouse/partner or financially dependent member of your household: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement, as an executor of an estate after death, or through providing investment advice for compensation o Owns an IRA o Participates in an investment club o Has another arrangement substantially equivalent to direct or indirect ownership NOTE: If none of the above beneficial interest situations apply and you are solely the beneficiary on an account, you do not need to disclose that account. For questions about securities that you are responsible for disclosing, see pages 19-21 of the Investment Adviser Code of Ethics for Investment Access Persons. 41 Initial Personal Account and Holdings Disclosure Form Investment Access Persons - --------------------------------------- ---------------------------------------- Name: Social Security #: - --------------------------------------- ---------------------------------------- ID Number: Routing #: - --------------------------------------- ---------------------------------------- Section 1 Do you or any members of your household have any brokerage or Mutual Fund account(s) (including Ameriprise Brokerage accounts) in which you have a direct or indirect beneficial interest, advise for others, have managed by another person(s), or participate in as a member of an investment club? [ ] YES If yes, complete Section 2 listing all accounts including Ameriprise Brokerage, Schwab or Merrill Lynch and all holdings within those accounts. Then complete Section 3. [ ] NO If you do not have accounts but you have holdings to report please fill out Sections 2 and 3. If you have no accounts and no holdings to report, please complete Section 3. Section 2 ACCOUNT/HOLDINGS DETAIL o Please complete all columns. o Initial page 43 if submitting electronically; sign page 43 if submitting a hard copy. o If submitting electronically, please send via e-mail to personal.trading@ampf.com. o If submitting a hard copy, please send to Personal Trade Compliance, H26/1880. o Please return this form to Personal Trade Compliance within 5 days.
- ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- Brokerage Firm Name or Security Description: Account Ownership Type / SSN Quantity Institution Name where Name or ticker symbol Number (D, I, C, A, M)* Shares or securities are held. If (or CUSIP) of Security NOTE: Only input the Social amount securities are not held in an Security number if different account, input N/A from your own - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- * D = Direct; I = Indirect; C = Club; A = Advised; M = Managed. For Ownership Type definitions, see page 41.
If more space is needed, attach the additional information on a separate page. Please sign and date any attached sheets. 42 Section 3 List any for-profit companies for which you are a member of the Board of Directors (if none, please indicate): Section 4 By signing this document, I am certifying that: o The accounts listed above are the only accounts in which I have a direct or indirect beneficial interest at this time. o I understand that failure to completely disclose all of my brokerage accounts and Mutual Fund accounts to Personal Trade Compliance may result in sanctions, which could lead to termination. o If I have one or more managed accounts, I do not have trading discretion for the accounts. o I have completely filled out this certification form so a letter authorizing duplicate confirmations and statements can be sent to my broker until my accounts have been transferred to one of the three limited choice brokerage firms. o I understand that failure to completely disclose all of my security holdings to Personal Trade Compliance or failure to complete this form by the required due date may result in sanctions, which could include termination. o I will not participate in market timing of any Mutual Fund. o If I open any new brokerage accounts I will notify Personal Trade Compliance in writing by filling out a Brokerage Account Notification form before the first trade is conducted. o The securities listed above are the holdings I have at this time. I understand that failure to completely disclose all of my holdings to Personal Trade Compliance may result in sanctions, which could include termination. o I have read and understand the Ameriprise Financial Insider Trading Policy and Investment Adviser Code of Ethics document and will abide by them. - -------------------------------------- -------------------- Signature Date Return to: Personal Trade Compliance-- H26/1880 43 Brokerage Account Notification Form Process On the following page is the Employee Notification Form that is required to be completed if you--or an immediate family member--maintains an external brokerage account. The brokers other than Ameriprise Financial Brokerage that are allowed at this time are Schwab or Merrill Lynch only. Please be sure to: o Fill out the broker information section. o Fill out the Access Person information section. Be sure to include family members' information if applicable. o Please send the form to Personal Trade Compliance H26/1880 no later than 5 days after receiving this packet. Reminder: Please submit this form prior to any trading If you have questions, please send a Lotus Note addressed to: Personal Trading or contact the Personal Trade Hotline at 612-671-5196. 44
***This is not an account transfer form and will not cause your securities to move*** BROKERAGE ACCOUNT NOTIFICATION FORM When to use this form: Ameriprise Financial personnel are required to complete this form when opening any new brokerage account (including new accounts opened to support an account transfer). STEP 1: COMPLETE EMPLOYEE INFORMATION SECTION ------------------------------------- ----------------------------------------------------------------------------------------- Name (First and Last) ------------------------------------- ----------------------------------------------------------------------------------------- ID Number (eg., E12345) / Position / [ ] Corporate Office Employee [ ] P1 Advisor [ ] Field Employee ------------------------------------- ----------------------------------------------------------------------------------------- Social Security Number ------------------------------------- ----------------------------------------------------------------------------------------- Field or Corporate Office Routing ------------------------------------- -----------------------------------------------------------------------------------------
STEP 2: COMPLETE BROKERAGE ACCOUNT INFORMATION SECTION
--------------------- --------------------- ---------------------------- -------------- --------------------------------------- Broker Dealer (choose one) --------------------------------------- Name on Account Account Number Social Security Number Ownership * Ameriprise Charles Merrill Financial Schwab Lynch Brokerage ===================== ===================== ============================ ============== ============== ============ =========== --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- * E.g. Individual, Joint, IRA, UTMA/UGMA, spousal IRA, etc.
STEP 3: SUBMIT COMPLETED FORM TO PERSONAL TRADE COMPLIANCE A. To submit via Interoffice mail, send to Personal Trade Compliance, H26 / 1880. B. To submit via Lotus Notes, attach completed form and send to Personal Trading. 45 Limited Choice Exception Request Complete this form if one of the situations described below applies to you and you wish to request an exception to the limited choice policy of conducting trading through one of the three authorized firms. Exception Policy - The typical kinds of situations for which Personal Trade Compliance expects exception requests include: A. spouse accounts where spouse of Ameriprise Financial employee works for a broker/dealer firm that prohibits outside accounts (supporting documentation to include copy of other firm's policy) B. accounts for the express business purpose of gaining competitive intelligence about other firm's practices (supporting documentation to include leader approval and specific business purpose for request) C. non-transferable limited partnership interests held prior to implementation of limited choice policy (supporting documentation to include copies of statements reflecting these holdings) Note: Other holdings and trading would remain subject to limited choice D. managed accounts where, e.g., employee has authorized broker to exercise investment discretion on employee's behalf and employee has no discretion over what specific securities are traded in account (supporting documentation to include: power of attorney document signed by employee and written representations from employee and from broker that employee has no trading discretion)
Section 1. Request for Exception (completed by employee, please print) Employee Name: Employee ID: Routing: - ------------------------------------------------------------------------------------------------------------ [ ] CORPORATE OFFICE [ ] P1 ADVISOR [ ] FIELD EMPLOYEE Exception type described above (also attach supporting documentation): |_| A |_| B (leader approval - print leader's name _________________ leader signature_______________________) |_| C |_| D |_| Other - explain in sufficient detail on an attachment Broker Name: Account # - ------------------------------------------------------------------------------------------------------------ Account Ownership: - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ Employee Signature Social Security # Date Section 2. Exception Review (completed by Personal Trade Compliance) [ ] Request on hold, more documentation needed - Please provide: [ ] Request Denied [ ] Request Approved - ------------------------------------------------------------------------------------------------------------ 1st Level Approval Date - ------------------------------------------------------------------------------------------------------------ 2nd Level Approval Date
46 INVESTMENT ADVISER CODE OF ETHICS FOR RETAIL ACCESS PERSONS: EMPLOYEES INCLUDING P1 ADVISORS AMERIPRISE FINANCIAL, INC. AND ITS AFFILIATES October 26, 2005 1
Investment Adviser Code of Ethics Ameriprise Financial, Inc. and its Affiliates Topic Page Overview Required Standards of Business Conduct 3-5 General Policy on Accepting Gifts 5 Fiduciary Principles 6 Personal Trading Rules Framework Applicability 7 General Rules 8-9 Basis For Rules 10 Definitions 10-11 Reporting Requirements for Retail Access Person Employees Security Activities Which Must Be Reported 12 How To Comply 12 Exceptions to Limited Choice Reporting Chart 13 Reporting Chart 14-15 Additional Rules & Reporting Requirements Limited Offering (Private Placement) Preclearance 16 Initial Holdings Disclosure & Annual Certification 17 Quarterly Reporting and Certification 17 Investment Clubs 18 Sanctions 19 Unusual Trading Activity 19 Responsibilities of the Chief Compliance Officer 20 Ameriprise Financial Insider Trading Policy 21-27 Forms & Completion Instructions Initial Brokerage and Mutual Fund Account and Personal Holdings Certification 28-30 Brokerage Account Notification Instructions & Form 31-32 Limited Choice Exception Request Form 33 Investment Club Client Disclosure Form 34
2 Overview As a condition of your continued employment or association with Ameriprise Financial, Inc. or its affiliates ("Ameriprise Financial"), you are required to read, understand, and fully comply with this Code of Ethics. The Code of Ethics also incorporates into its terms and requirements the provisions of other important documents to which you are subject; namely, the Ameriprise Financial Company Code of Conduct and, for financial advisors and their employees, the Compliance Resource Guide. It is your personal responsibility and accountability to avoid any conduct that could create a conflict, or even the appearance of a conflict, with our clients' interests, or do anything that could damage or erode the trust our clients place in Ameriprise Financial. This is the spirit of the Code of Ethics. Every person has the absolute obligation to comply with both the letter and the spirit of the Code. Failure to comply with its spirit is just as much a violation as a failure to comply with the written provisions of the Code. In this regard, you should also be aware that it is impossible for the Code of Ethics to cover every situation you may encounter. In those situations that are not specifically covered by the Code we must follow the spirit of the Code. If you are uncertain as to the appropriate course of action you should take, you should seek immediate assistance from your leader, the Chief Compliance Officer or the Office of the Ombudsperson before acting. If the Code of Ethics is silent on a particular matter, it does not authorize conduct that violates the spirit of the Code. The Code covers not only the activities you perform on a day-to-day basis, but also your personal securities transactions as well as those of certain of your family members and entities (such as corporations, trusts, or partnerships) that you may be deemed to control or influence. Appropriate sanctions will be imposed for violations of the Code of Ethics. Sanctions may include bans on personal trading, financial penalties, disgorgement of trading profits, suspension of employment, and/or termination of employment or association with Ameriprise Financial. Repeat violations of the Code will result in progressively stronger sanctions. Self-reporting a violation of the Code will be considered in determining the appropriate sanction for the violation. This Code will be provided to all individuals who are subject to its terms. After you receive and review the Code you must certify that you have received, read and understand the document and agree that you are subject to it and will comply with it. You will also be required to provide similar certifications when the Code is amended. On an annual basis you will also be asked to provide a re-certification and represent that you have complied with the Code during the past year. The initial certification form is attached. 3 Required Standards of Business Conduct Under this Code of Ethics all supervised persons of Ameriprise Financial must comply with Ameriprise Financial's standards of business conduct. These standards are the following: o Compliance with all applicable laws and regulations, including the federal securities laws and our fiduciary obligations; o Compliance with this Code of Ethics; o Compliance with the Ameriprise Financial Code of Conduct; o Compliance with all other policies and procedures applicable to your position and assigned responsibilities; o Financial advisors and their employees must also comply with the Compliance Resource Guide. These standards apply to all individuals, at all levels of the organization. Compliance with applicable laws and regulations is mandatory for everyone and is not subject to business priorities or individual discretion. If at any time you have a question about the legality of a course of action you should consult with the General Counsel's Office before proceeding. The Investment Advisers Act of 1940 imposes a fiduciary duty on an investment adviser to act in utmost good faith with respect to its clients, and to provide full and fair disclosure of all material facts, particularly where the adviser's interests may conflict with the client's. The Adviser has a duty to deal fairly and act in the best interests of its clients at all times. All employees of Ameriprise Financial must comply with the Ameriprise Financial Code of Conduct. The Code of Conduct deals with issues covering, among other things, the acceptance of gifts, service on the boards of public companies and other outside activities. For specific guidance on these and other topics that may not be specifically covered by the Code of Ethics you should refer to the Code of Conduct and the Compliance Resource Guide. All financial advisors associated with Ameriprise Financial must comply with the Compliance Resource Guide. Besides referring to the Code of Ethics and the Code of Conduct, you should also refer to the Compliance Resource Guide for guidance in a particular situation. The provisions of the Code of Ethics and the Compliance Resource Guide should not conflict. In the event the provisions of the Code of Ethics or the Compliance Resource Guide conflict or appear to conflict with those contained in the Code of Conduct you should follow the guidance contained in the Code of Ethics or Compliance Resource Guide. If at any time you feel there is ambiguity as to what the appropriate course of action should be in a particular situation you should immediately seek assistance from the General Counsel's Office or the Compliance Department before you act. You are also subject to compliance policies and procedures and other policies and procedures adopted by the organization. You are responsible for being familiar with and complying with these policies and procedures. If you are uncertain as to these additional policies and procedures to which you are subject, you should speak with your leader. As described in greater detail below, the Code of Ethics also addresses personal securities trading activities in an effort to detect and prevent illegal or improper transactions. 4 Under this Code of Ethics you have a duty to promptly report any violation or apparent violation of the Code of Ethics (including the Code of Conduct and Compliance Resource Guide) to the Chief Compliance Officer. You can also report violations or possible violations to the Office of the Ombudsperson. This duty exists whether the violation or apparent violation is yours or that of another employee or associated person of Ameriprise Financial. All such reports will be treated confidentially to the extent permitted by law and will be investigated promptly and appropriately. Ameriprise Financial prohibits retaliation against individuals who report violations or apparent violations of the Code in good faith and will treat any such retaliation as a further violation of the Code. However, it must be understood that employees or associated persons of Ameriprise Financial who violate the Code are subject to sanctions for the violation even if they report the violation. General Policy on Accepting Gifts Instances may arise where a person or organization offers you a gift. When being offered a gift, the Ameriprise Financial Code of Conduct should serve as your primary guide to determining whether or not a gift is acceptable. The Code of Conduct states: "You may accept entertainment, token gifts or favors only when the value involved is not significant and clearly will not place you under any real or perceived obligation to the donor." See section on Gifts in the Code of Conduct. When receiving a gift, it is imperative to avoid even the appearance of a conflict of interest, regardless of the value of the gift. Sometimes a situation may be unclear. If you are unsure whether to accept a gift, talk with your leader. If your leader is unsure, or feels an exception should be made, s/he should contact the Compliance Department for guidance. Above all, the decision should comply with the spirit of the Code of Conduct and this Code of Ethics. 5 Fiduciary Principles The following general fiduciary principles shall govern your activities and the interpretation and administration of these rules: o The interests of our clients (including Mutual Fund shareholders) must be placed first at all times. o All personal trading transactions must be conducted consistent with the rules contained in this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility. o Company personnel should not take inappropriate advantage of their positions. In connection with providing investment management services to clients, this includes prohibiting any activity which directly or indirectly: o Defrauds a client in any manner; o Misleads a client, including any statement that omits material facts; o Operates or would operate as a fraud or deceit on a client; o Functions as a manipulative practice with respect to a client; and o Functions as a manipulative practice with respect to securities. These rules do not identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield company personnel from liability for personal trading or other conduct that is designed to circumvent its restrictions or violates a fiduciary duty to our clients. 6 Personal Trading Rules Framework Applicability These rules apply to securities trading in which you have a beneficial ownership. Beneficial ownership includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where they give advice and also have a direct or indirect ownership. 7 General Rules These general rules, along with the procedures contained in the rest of this document, must always be followed: 1. No use of inside information (refer to "Ameriprise Financial Insider Trading Policy" on page 21). 2. No front-running. This involves an individual taking advantage of non-public information about imminent trading activity in our Mutual Funds or other advised accounts by trading in a security before the fund or advised account does. You are not allowed to trade in a particular security ahead of, or at the same time as, your clients' accounts. 3. No misuse of material non-public information relating to Mutual Funds, including information relating to portfolio holdings or pricing. 4. No Access Person shall divulge to any person any client holdings, any recommendation made to a client, or any contemplated or completed securities transactions or trading strategies of a client, except as required in the performance of his or her duties and only to the extent such other person has a need to know such information to perform his or her duties. Disclosures of any past, current or contemplated client holdings must be consistent with the Portfolio Holdings Disclosure policy. 5. No market timing (short-term trading) in shares of Mutual Funds. This prohibition applies across all accounts in which you have a beneficial interest (so that you cannot buy shares of a Mutual Fund in one account and sell them from another account in market timing transactions), including the Ameriprise Financial 401(k) Plan and Mutual Funds underlying a variable annuity and variable life insurance contracts. This prohibition also applies to investments through pooled investment vehicles, such as hedge funds, that may engage in market timing. You are responsible for ensuring that no pooled investment vehicle in which you invest engages in market timing. If you invest in a hedge fund whose offering document does not state whether the hedge fund engages in market timing of Mutual Funds, you should obtain written assurance from the hedge fund that it does not engage in market timing of Mutual Funds. 6. No purchasing of initial public offerings (this includes secondary issues of equity or fixed income) 7. No preferential treatment from other brokerage firms due to the purchaser's employment by or association with Ameriprise Financial. 8. No direct trades with broker/dealers' trading desks. 9. No non-retail relationships with broker/dealers. 8 10. No use of Ameriprise Financial's name (or the name of any of its subsidiaries) to obtain a better price from a broker who is a market maker in the security being traded. 11. No speculative trading of Ameriprise Financial stock, which is characterized by transactions in "put" or "call" options, or short sales or similar derivative transactions. Ameriprise Financial discourages short-term trading in its own stock. (You are allowed to exercise any Ameriprise Financial stock options you have received as a result of your employment with the Company. Members of the Executive Leadership Team, however, must preclear these trades through the Corporate Secretary's office.) 12. No stopping stock. This is defined as a guarantee by a specialist that an order placed by a Floor Broker will be executed at the best bid or offer price then in the Specialist's book unless it can be executed at a better price within a specified period of time. 13. If the company's managed or owned accounts are active in a given security, no use of that security to meet margin calls if cash or other securities are available to meet the call. 14. An Access Person shall use his or her best judgment in giving investment advice to clients and shall not take into consideration his or her personal financial situation or interests in doing so. 15. When engaging in a personal securities transaction, an Access Person shall always place the interests of clients first and avoid any actual or potential conflict of interest or abuse of his or her position. 16. Required forms must be filled out completely, accurately and on a timely basis. This includes quarter end reports. Violations of the Code, including late filing of periodic reports will be reported to Senior Management and the RiverSource Investments, LLC Funds Board of Directors. Important: o Obligation to Report Violations: Any person who discovers that he or she or another person has violated or apparently violated these general rules or other provisions of Code must promptly report the matter to the Chief Compliance Officer. o Personal Trading Records Subject To Review By Regulators: The SEC and the NASD have the authority to review individuals' personal trading records. It is not unusual in the course of regulatory exams for the examiners to interview individuals about their trading activity violations of the Code of Ethics. o Even if you receive preclearance, you cannot be ensured that you have not violated the Code. o The Compliance Department has the authority to review records and request additional information. o The privacy of your reported information is extremely important and will be held in the utmost confidence. 9 Basis for Rules The rules and procedures that apply to personal trading for Retail Access Persons are derived from: Securities and investment laws o Securities Act of 1933 o Securities Exchange Act of 1934 o Investment Company Act of 1940 o Investment Advisers Act of 1940 o Insider Trading and Securities Fraud Enforcement Act of 1988 Rules, regulations and corporate policies o Securities and Exchange Commission (SEC) o National Association of Securities Dealers (NASD) o Ameriprise Financial Insider Trading Policy o Ameriprise Financial Code of Conduct Investment Company Institute (ICI) Guidelines to Industry on Personal Investing Definitions This Investment Adviser Code of Ethics for Retail Access Persons applies to all persons associated with Ameriprise Financial other than Investment Access Persons and P2 Advisors and their employees. Access Persons: supervised persons and other persons who are employees or associated persons of Ameriprise Financial, who have access to nonpublic information regarding clients' purchase or sale of securities or non public information regarding the portfolio holdings of Proprietary Funds, are involved in making securities recommendations to clients, or who have access to recommendations that are nonpublic. Retail Access Persons: Access Persons who have access only to Ameriprise Financial retail client information. Investment Access Persons: Access Persons who have access to Ameriprise Financial / RiverSource institutional client information. Investment Access Persons are also subject to rule 17j-1 under the Investment Company Act of 1940. Limited Offerings (Private Placements): A Limited Offering is an offering of securities exempt from registration due to exemptions for the size of offering and the number of purchasers as defined under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) (14 U.S.C. 77d(2) or 77d(6) or pursuant to Rule 504, 505 or 506 of Regulation D under the Securities Act of 1933. Limited Offerings include Private Placements. You are not allowed to invest in Limited Offerings (Private Placements) without preclearance - see page 16. Supervised Person: any partner, officer, director (or other person occupying a similar status or performing similar functions), or an employee of an investment adviser, or other person who 10 provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser. Mutual Funds: U.S. registered open-end investment companies the shares of which are redeemable on any business day at the net asset value, including Mutual Funds that underlie variable annuity and variable life insurance contracts. Proprietary Funds: investment companies that are registered with the SEC and for which Ameriprise Financial / RiverSource serves as an Investment Adviser. Non-proprietary Funds: investment companies that are registered with the SEC and are not Proprietary Funds. 11 Reporting Requirements for Retail Access Person Employees Securities Activities Which Must Be Reported All personal securities trading activities (i.e., stocks, options, bonds, Mutual Fund shares, etc.), whether bought or sold, must be reported, with the exception of such things as money market mutual funds and certificates of deposit. See "How to Comply" section below for more information. A chart indicating which transactions must be reported is located on pages 14-15. You must report activity involving securities trading in which you have a beneficial ownership. This includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where you give advice and also have a direct or indirect ownership. Failure to disclose all brokerage and Mutual Fund accounts is a violation of the Code and may result in a sanction, which includes possible termination. How To Comply Unless you have an exception approved by Personal Trade Compliance, your personal trading must be conducted through one of three brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch. You must report any new accounts opened by immediately completing the following steps: o Complete the Brokerage Account Notification Form on page 32 and return it to Personal Trading, H26/1880. Failure to properly carry out this notification process may result in a sanction. o Notify your broker of your association with Ameriprise Financial. You are responsible for notifying your broker that you work for Ameriprise Financial, a broker/dealer, and ensuring that Personal Trade Compliance is provided with duplicate statements and confirmations for your account(s). 12 What types of investments must be transferred to or held at one of the limited choice firms? o Stocks -- common (including Ameriprise Financial), preferred, convertible preferred, short sales, rights or warrants o Corporate bonds (including convertible and foreign) o State and local municipal bonds o Derivatives, including futures, options and index securities o Limited partnerships (if purchased through a brokerage account) o Unit Investment Trusts (UITs), American Depository Receipts (ADRs) and Real Estate Investment Trusts (REITs), Exchange Traded Funds and closed-end funds. o Managed or wrap accounts in which individual securities are held and the investor has the ability to exercise trading discretion o Proprietary Funds must be held through Ameriprise Financial Brokerage, Ameriprise Financial 401(k) Plan, "at fund" (directly with the Mutual Fund), or underlying a variable annuity or variable life insurance contract from IDS Life Insurance Company or another affiliate of Ameriprise Financial. What investments are not subject to this limited choice policy? Some investments are not subject to this policy, and therefore, do not need to be transferred. You may continue to hold the following investments in brokerage accounts at other firms: o Non-proprietary Funds o Annuities o Certificates of Deposit, savings certificates, checking and savings accounts and money market accounts o Commercial paper o Dividend reinvestment plans o Employer sponsored incentive savings plans o US Government bonds (U.S. Treasury notes, bills, bonds, STRIPS, savings bonds) o Church bonds o Limited Offerings / Private Placements (These transactions require specific preclearance-see page 16) o Managed or wrap accounts that do not include individual securities Exceptions to Limited Choice Exceptions to the limited choice policy of conducting personal trading through one of the three authorized brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch - will be rare. If you believe your situation warrants an exception, print and complete the Exception Request Form found on page 33. If you are granted an exception you are responsible for ensuring that Personal Trade Compliance receives duplicate confirmations and statements. An exception to the limited choice policy does not eliminate the need to comply with the rest of the Investment Adviser Code of Ethics. 13 Securities Reporting for Retail Access Persons
--------------------------------------------------------- This chart indicates which securities must be disclosed Is reporting required for these transactions? with your initial and annual certification. American Depository Receipts/Shares/Units Yes (ADRs/ADSs/ADUs) - --------------------------------------------------------- --------------------------------------------------------- Annuities - Fixed No (other than market value adjusted annuities) - ------------------------------------------------------------------------------------------------------------------- Annuities - Variable and market value adjusted annuities Yes - --------------------------------------------------------- --------------------------------------------------------- American Express Stock Yes - --------------------------------------------------------- --------------------------------------------------------- (Options on) American Express Stock (i.e., puts and Ban has been lifted calls)* - --------------------------------------------------------- --------------------------------------------------------- American Express stock options (obtained as a part of an Yes incentive plan)* - --------------------------------------------------------- --------------------------------------------------------- Ameriprise Financial Stock * Yes Executive Leadership Team need to preclear with the Corporate Secretary's office - --------------------------------------------------------- --------------------------------------------------------- (Options on) Ameriprise Financial Stock (i.e., puts and Prohibited calls)* - --------------------------------------------------------- --------------------------------------------------------- Ameriprise Financial stock options (obtained as a part Yes of an incentive plan)* Executive Leadership Team need to preclear with the Corporate Secretary's office - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: corporate Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: convertible Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other direct debt instruments of the U.S. No Government: (e.g. Treasury notes, bills, bonds or STRIPS) - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: U.S. Guaranteed or of Yes federally sponsored enterprises (FHLMC, FNMA, GNMA, etc.) - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: Municipal Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: Church Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: closely held Yes - --------------------------------------------------------- --------------------------------------------------------- Bank certificates of deposit, Savings Certificates, No checking and savings accounts and money market accounts, bankers' acceptances, commercial paper and high quality short-term debt instruments, including repurchase agreements. - --------------------------------------------------------- --------------------------------------------------------- Closed-end funds: including registered fund of hedge Yes funds - --------------------------------------------------------- --------------------------------------------------------- Derivatives (DECS, ELKS, PRIDES, etc.) Yes - --------------------------------------------------------- --------------------------------------------------------- Futures: commodity, currency, financial, or stock index Yes - --------------------------------------------------------- --------------------------------------------------------- Index Securities - (S&P 500, SPDRS/SPY, Diamonds/DIA, Yes Cubes/QQQ, etc., Exchange Traded Funds, Holders Trusts - --------------------------------------------------------- --------------------------------------------------------- Limited Offerings / Private Placements - Equity and Yes - on quarterly form Fixed Income Preclearance is required see page 16 - --------------------------------------------------------- ---------------------------------------------------------
14
--------------------------------------------------------- This chart indicates which securities must be disclosed Is reporting required for these transactions? with your initial and annual certification. American Depository Receipts/Shares/Units Yes (ADRs/ADSs/ADUs) - --------------------------------------------------------- --------------------------------------------------------- Limited Partnerships Yes - --------------------------------------------------------- --------------------------------------------------------- Limit order Yes - --------------------------------------------------------- --------------------------------------------------------- Managed or wrap accounts: o If individual securities held and investor has Yes ability to exercise trading discretion o If individual securities held and investor does not have ability to exercise trading discretion Yes - --------------------------------------------------------- --------------------------------------------------------- Mutual Funds (other than money market mutual funds) Yes - --------------------------------------------------------- --------------------------------------------------------- Money market mutual funds No - --------------------------------------------------------- --------------------------------------------------------- Options on stocks Yes - --------------------------------------------------------- --------------------------------------------------------- Options: exercise of option to buy or sell underlying Yes stock - --------------------------------------------------------- --------------------------------------------------------- Options on futures and indices (currency, financial, or Yes stock index) - --------------------------------------------------------- --------------------------------------------------------- REITS (Real Estate Investment Trusts) Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks: common or preferred (you do not need to report Yes Dividend Reinvestment Plans - DRIPS unless you are a grade 45 or above) - --------------------------------------------------------- --------------------------------------------------------- Stocks: convertible preferred Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks: short sales (short sales prohibited on Yes Ameriprise Financial stock) - --------------------------------------------------------- --------------------------------------------------------- Stocks (owned) - exchanges, swaps, mergers, tender offers Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks - public offerings (initial OR secondary) Prohibited - --------------------------------------------------------- --------------------------------------------------------- Stocks - Rights or warrants acquired separately Yes - --------------------------------------------------------- --------------------------------------------------------- Unit Investment Trusts (UITs) Yes - --------------------------------------------------------- ---------------------------------------------------------
* Incentive awards of Ameriprise Financial stock options, restricted stock and portfolio grants and the sale through Ameriprise Financial of a part of these shares to cover taxes at the time of vesting or exercise are subject to reporting. In addition, other holdings, purchases and sales of Ameriprise Financial stock are required to be reported. Special note for 401(k)'s: reporting is required for any 401(k) or an employer sponsored incentive savings plan held by the Access Person. For any 401(k) held by a spouse who is not also an Access Person, reporting is only required on Ameriprise Financial / RiverSource Proprietary Fund holdings or any other reportable security indicated above. In other words, an Access Person does not need to report Non-proprietary Funds held in a spouse's 401(k) plan. Special note for automatic investment plans: you do not need to report transactions that are made as part of a regular periodic purchase (or withdrawal). For example: payroll deduction, bank authorizations etc. 15 Additional Rules & Reporting Requirements Limited Offerings (Private Placement) Preclearance - Equity and Fixed Income All Access Persons need to obtain approval to invest in any Limited Offerings (private placements), i.e., a security not offered to the public. Approvals must be obtained in writing from your leader or registered principal and Personal Trade Compliance prior to investing. How to obtain approval - Write an explanation of the investment and submit the request to your Leader or Registered Principal. Included in the request should be an explanation of: o the nature of the investment o how you were solicited o approximate dollar amount you are planning to invest o whether or not the opportunity was being offered to any of Ameriprise Financial / RiverSource's managed accounts or to any of your clients o whether the security is likely to be purchased by an Ameriprise Financial / RiverSource managed account or any of your clients in the future. In considering whether to make a request, consider whether your investment might create a conflict with a business interest of Ameriprise Financial. See the Ameriprise Financial Code of Conduct and the Compliance Resource Guide. How Limited Offerings/private placements are approved - Your leader or registered principal will approve or reject your request, and return the request to you. If approval is granted, send the request via lotus notes to "Private Placement Preclearance". You cannot enter into the proposed transaction without approval from Personal Trade Compliance. Personal Trade Compliance will respond to you requesting any additional information or further documentation needed to make a decision. Upon receipt of all necessary documentation, Personal Trade Compliance will then confirm in writing whether you can invest. If your investment is approved, you must report the investment on the quarterly reporting form, which will be provided to you. If you have questions about how the private placement approval process applies to a transaction you are considering, please contact us by sending a lotus note to "Personal Trading" or call us at 612-671-5196 before you invest. 16 Failure to completely and accurately disclose brokerage & Mutual Fund accounts, holdings and quarterly non-brokerage activity by the time frames specified by Personal Trade Compliance is a violation of the Code and may result in a sanction, which includes possible termination. Initial Holdings Disclosure New Access Persons must disclose certain securities holdings in which they have a beneficial interest. All new Access Persons will receive a copy of the Code of Ethics that applies to them and that includes an Account Certification and Holdings Disclosure form. This document must be returned to Personal Trade Compliance H26/1880 within 10 days. An example of this form is located on pages 29-30. Annual Certification and Annual Holdings Disclosure In addition to reporting requirements already outlined, every Access Person must submit an annual certification form. If you are new to the company, you will receive a form and instructions when you attend your orientation session. If you do not attend this orientation session, please contact the Personal Trade area 612-671-5196 for the information. All Access Persons must also disclose annually certain securities holdings in which they have a beneficial interest. Failure to disclose annual holdings by the time frames specified by Personal Trade Compliance may result in a sanction, which includes possible termination. All Access Persons will receive a form electronically on an annual basis from Personal Trade Compliance. You should document your account(s) certification and holdings disclosures on this form. Quarterly Reporting and Certification Personal Trade Compliance will send you a form each quarter to indicate whether, for a given calendar quarter, you executed securities transactions outside of a broker-dealer account or engaged in transactions in Mutual Funds as identified on the quarterly reporting form. You must return the quarterly reporting form to Personal Trade Compliance within 30 calendar days of the last day of the quarter. You will also be asked to certify quarterly that you have complied with the provisions of this Code of Ethics relating to transactions in Mutual Funds including prohibitions on market timing and the misuse of material non-public information relating to Mutual Funds, including information relating to portfolio contents or pricing. 17 Investment Clubs There is no prohibition against joining an investment club. When forming an investment club, please provide the following to Personal Trade Compliance: o a copy of the Brokerage Account Notification Form (see page 32) o a copy of your investment club's bylaws o a listing of the members of the club and an indication if any members are employees, independent contractors or associated persons of Ameriprise Financial. Please include the individual's employee, Advisor, or contractor identification number. o the contact person for the club in case of questions o the account needs to be held at Ameriprise Financial Brokerage, Schwab or Merrill Lynch, unless the club has been granted an exception from Compliance Advisors You may not solicit clients of Ameriprise Financial to become investment club members, due to possible conflicts of interest. If an existing member of your investment club later becomes your client, you must obtain a written and signed disclaimer from him/her immediately. A sample copy of the disclaimer is attached on page 34. This disclaimer must state the investment club relationship was pre-existing and entered into freely, and the client understands Ameriprise Financial in no way endorse, approve, or guarantee any activity undertaken by the club. Furthermore, the client/club member's understands Ameriprise Financial have no responsibility for the financial results due to his/her participation in the club. A completed copy of the Client Disclosure Form must be routed to Personal Trade Compliance immediately. 18 Sanctions Sanctions will be imposed for violations of Ameriprise Financial, SEC, or NASD rules or policies. These sanctions are communicated via violation letters and may vary depending on the severity of the violation, if a record of previous violations exists and/or the violation was self-reported. Examples of potential sanctions include (but are not limited to): o a written reminder about the rules (with a copy to the individual's manager) o notification to your broker to freeze your account from any buy-side trading. This is a typical sanction if you fail to move your account(s) to one of the three limited choice brokers - Ameriprise Financial Brokerage, Schwab, or Merrill Lynch. The account could then be used only for transfers and liquidations. o prohibition against personal trading for a specific period of time o forfeiture of trading profits o monetary fine o negative impact on the individual's bonus or other compensation and or performance rating o termination A written record of each violation and sanction is maintained by Personal Trade Compliance. Unusual Trading Activity The Personal Trade Committee and your department head review your personal trading activity regularly. We may ask to review specific transactions with you or your broker if clarification is necessary. You may also be asked to supply Personal Trade Compliance with a written explanation of your personal trade(s). Examples of situations that may require a memo of explanation include, but are not limited to: o violations of personal trading rules o trades in a security shortly before our Investment Department trades in the same security on behalf of a client o patterns of personal trading that are similar to your clients' trading o significant changes in trading volume o patterns of short-term, in and out trading o significant positions in illiquid securities o a number of employees trading in the same security in the same time frame 19 Responsibilities of the Chief Compliance Officer, or their delegate, related to Personal Trading Process and Responsibility The Chief Compliance Officer, or their delegate, has primary responsibility for enforcing the Code. The Personal Trade Committee (PTC) reviews all alleged personal trading violations and any sanctions applied. If the alleged violator is the Chief Compliance Officer, the matter must be reported to the PTC and the General Counsel of the firm. Opportunity to Respond A person charged with a violation of the Code shall have the opportunity to appear before the person or persons enforcing the Code and to respond to all charges, orally or in writing. Initial Holdings Report; Annual Holdings Report The Chief Compliance Officer, or their delegate, shall review and maintain all initial and annual holdings reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Quarterly Personal Trading Reports The Chief Compliance Officer, or their delegate, shall review and maintain all quarterly transaction reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate deems necessary to enforce the provisions and intent of this Code. Pre-Clearance The Chief Compliance Officer, or their delegate, shall review and approve or disapprove all Access Person requests to pre-clear securities transactions. Such review shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Violations or Suspected Violations If the Chief Compliance Officer, or their delegate becomes aware of a violation or suspected violation of the Code as a result of such review, the Chief Compliance Officer, or their delegate, shall take whatever steps deemed necessary to enforce the provisions of the Code, including consulting with outside counsel. Record Retention Records are required to be kept for seven years (a minimum of two years on site). 20 Ameriprise Financial Insider Trading Policy Ameriprise Financial's Statement of Policy and Procedures with Respect to the Receipt and Use of Material Non-Public Information This statement represents the policy of Ameriprise Financial, Inc. and its affiliates (collectively "Ameriprise Financial")(1) with regard to the receipt and use of material non-public information. If you have any questions or comments about this policy, please contact either the General Counsel's Office (the "GCO") or the Compliance Department using the contact information provided at the end of this policy. A. General Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), Rule 10b-5 enacted thereunder and court and Securities and Exchange Commission ("SEC") administrative decisions interpreting these and other relevant provisions make it unlawful for any person to trade or to recommend trading in securities while in the possession of material non-public ("inside") information. More specifically, the above-referenced provisions and interpretations make it unlawful for a corporate insider to trade while in the possession of inside information. They also make it unlawful for someone who is not a corporate insider to trade while in possession of inside information, when the information is disclosed to the non-insider in violation of an insider's duty to keep it confidential, when the non-insider has a duty to keep the information confidential or when the information is misappropriated (i.e., stolen). Finally, communicating material non-public information to others generally is unlawful. In light of the above and in compliance with the requirements of Section 204A of the Investment Advisers Act of 1940 (the "Advisers Act"), Rule 206(4)-7 enacted thereunder and the Insider Trading & Securities Fraud Enforcement Act of 1988 (the "Enforcement Act"), Ameriprise Financial prohibits any director, officer, principal or associated person from trading on the basis of or otherwise misusing inside information. The material that follows provides further explanation of what constitutes inside information and of the prohibition on its misuse. The description below is not exhaustive and does not cover every situation. You should contact the GCO or the Compliance Department if you have questions or concerns. B. What is "Inside Information"? The term "inside information" is broadly construed by the courts and regulatory authorities. Generally, it includes "material" information, which is "non-public" and has been provided on a confidential basis or in breach of a fiduciary duty. It includes information about a company or another issuer (including a government entity) or the market for the company's or other issuer's securities that has come directly or indirectly from the company or other issuer and that has not been - -------- (1) For purposes of clarity, this statement does not apply to Threadneedle Asset Management Holdings Ltd. and its subsidiaries, each of which has its own insider trading policies and procedures. 21 disclosed generally to the marketplace. In addition to the issuer, inside information can come from persons with access to the information, including not only the issuer's officers, directors and other employees, but also its auditors, investment bankers and attorneys. Consultants to the issuer or to Ameriprise Financial are other examples of persons who might be sources of inside information. Material Information: Information is "material" if its dissemination is likely to affect the market price of any of the company's or other issuer's securities or is likely to be considered important by reasonable investors, including reasonable speculative investors, in determining whether to trade in such securities. Other information may or may not be material, depending on its specificity, its magnitude, its reliability and the extent to which it differs from information previously publicly disseminated. Though there is no precise, generally accepted definition of materiality, information is likely to be material if it relates to significant changes affecting matters such as: 1. Dividend or earnings expectations; 2. Changes in previously released earnings estimates; 3. Write-downs or write-offs of assets; 4. Additions to reserves or bad debts or contingent liabilities; 5. A significant increase or decrease in orders; 6. Expansion or curtailment of company or major division operations; 7. Proposals or agreements involving a joint venture, merger, acquisition, divestiture or leveraged buy-out; 8. A purchase or sale of substantial assets; 9. New products or services; 10. Exploratory, discovery or research development; 11. Criminal indictments, civil litigation or government investigation; 12. Disputes with major suppliers or customers; 13. Labor disputes including strikes or lock-outs; 14. Substantial changes in accounting methods; 15. Debt service or liquidity problems; 16. Extraordinary borrowings; 17. Bankruptcy or insolvency; 18. Extraordinary management developments; 19. Public offerings or private sales of debt or equity securities; 20. Calls, redemptions or purchases of the company's own stock; 21. Issuer tender offers; or 22. Recapitalizations. If you are dealing with such information, presume it is material and contact the GCO or the Compliance Department so they can assist you in determining whether it is in fact material. Inside information about a company or other issuer can also be material because of its expected effect on a particular class of a company's securities, all of the company's securities, the securities of another company or issuer or the securities of several companies or issuers. Moreover, the resulting prohibition against the misuse of inside information reaches all types of securities (whether stock or other equity interests, corporate debt, government or municipal obligations, or commercial paper) as well as any option related to that security (such as a put or call, or an index security if the nonpublic information is material to the index security). 22 Non-public Information: In order for information to qualify as inside information, it must not only be material, it must be "non-public." Non-public information is information that has not been made available to investors generally. It includes information received in circumstances indicating that it is not yet in general circulation. It also includes situations in which the recipient knows or should know that the information could only have been provided directly or indirectly by the issuer or its insiders. Once material non-public information has been released to the investing public, it loses its status as inside information. However, for non-public information to become public, it must be disseminated through recognized channels of distribution designed to reach the securities marketplace. To show that material information is public, you should be able to point to some fact verifying that the information has become generally available. For example, disclosure in a national business and financial wire service (e.g., Dow Jones or Reuters), by a national news service (e.g., the Associated Press or United Press International) publication in a local newspaper, in a national newspaper (e.g., The Wall Street Journal or The New York Times) or in a publicly disseminated disclosure document (e.g., a proxy statement or a prospectus) would all be sufficient to consider the information generally available. The circulation of rumors or "talk on the street," even if accurate, widespread and reported in the media, does not constitute the requisite public disclosure. Furthermore, material non-public information is not made public through selective dissemination. See the Portfolio Holdings Disclosure policy for applicable procedures and additional information. Material information disclosed only to institutional investors or to a fund analyst or a favored group of analysts generally retains its status as non-public information and must not be disclosed or otherwise misused. (Please consult with the GCO or the Compliance Department if an issuer or its agent, such as its investment banker, mistakenly discloses non-public information to investors.) Similarly, partial disclosure does not constitute public dissemination. As long as any material component of the inside information possessed by any director, officer, principal or associated person of Ameriprise Financial has yet to be publicly disclosed, the information is non-public and trades based on such information are prohibited. Information Provided in Confidence: Occasionally, one or more directors, officers, principals or associated persons of Ameriprise Financial may become temporary insiders because of a fiduciary or commercial relationship with another company. For example, personnel at Ameriprise Financial may temporarily become insiders when an external source, such as a company or officer of a company, entrusts material non-public information in connection with a commercial relationship or transaction to a director, officer, principal or associated person of Ameriprise Financial with the expectation that the information will remain confidential. 23 As an insider, we have a fiduciary obligation not to breach the trust of the party that has communicated the inside information by misusing that information. This fiduciary duty arises because we have entered or have been invited to enter into a commercial relationship with another company and have been given access to confidential information solely for the corporate purposes of such company. This obligation remains whether or not we ultimately participate in a transaction related to the information we are given. Information Disclosed in Breach of a Duty (Tipper and Tippee Liability): Directors, officers, principals or associated persons of Ameriprise Financial must be especially wary of inside information disclosed in breach of a corporate insider's fiduciary duty. Even when there is no expectation of confidentiality, you may become an insider upon receiving material non-public information in circumstances in which you know or should know that a corporate insider is disclosing information in breach of the fiduciary duty he or she owes his or her company and its shareholders. Whether the disclosure is an improper "tip" that renders the recipient a "tippee" depends on whether the corporate insider expects to benefit personally, either directly or indirectly, from the disclosure. In the context of an improper disclosure by the corporate insider, the requisite "personal benefit" is not limited to a business or future monetary gain. Rather, a prohibited personal benefit may include a reputational benefit, an expectation of a quid pro quo from the recipient or the recipient's employer, or an intention to benefit the recipient or the recipient's employer, through a gift of the inside information. You may, depending on the circumstances, also become an insider or tippee when you obtain material non-public information by happenstance, including information derived from social situations, business gatherings, overheard conversations, misplaced documents and tips from insiders or other third parties. Given the potentially severe regulatory, civil and criminal sanctions to which you, Ameriprise Financial and other Ameriprise Financial personnel could be subject, if you are a director, officer, principal or associated person uncertain as to whether the information you possess is inside information, you should immediately call the GCO or the Compliance Department rather than relying on your own interpretation of the applicable law. Pending a final determination in consultation with the GCO and/or the Compliance Department, the information should be treated as inside information that cannot otherwise be communicated or misused. C. Criminal and Civil Penalties and Regulatory Sanctions for Insider Trading Penalties for misusing inside information are severe. Depending on the circumstances and the adequacy of the relevant procedures, the individual involved, his or her supervisor, the employer's principals, officers, directors and other supervisory personnel could all face substantial regulatory, civil and criminal sanctions. For example, Ameriprise Financial personnel who either trade on inside information or become subject to tipper or tippee liability are subject to the following penalties: 1. A civil penalty of up to three times the profit gained or loss avoided; 2. A criminal fine of up to $5,000,000; and 3. A jail term of up to 20 years. Furthermore, Ameriprise Financial and its supervisory personnel, if they fail to take appropriate steps to prevent insider trading, are subject to the following penalties: 24 1. A civil penalty of up to $1,000,000 or, if greater, three times the profit gained or loss avoided as a result of the employee's violation; and 2. A criminal penalty of up to $2,500,000 for individuals and up to $25,000,000 for Ameriprise Financial. Finally, violations of insider trading laws could result in civil injunctions and a suspension or permanent bar from the securities industry. D. Company Rules Regarding Misuse of Inside Information Listed below are certain Ameriprise Financial rules prohibiting the misuse of inside information. No director, principal, officer or associated person of Ameriprise Financial may violate these rules or authorize or allow any violation of these rules. Anyone who knows or has reason to suspect that these rules have been violated must bring such actual or potential violation to the immediate attention of the Compliance Department. No director, officer, principal or associated person of Ameriprise Financial shall purchase or sell or recommend or direct the purchase or sale of a security for any client or any client's account managed by Ameriprise Financial (including accounts owned by Ameriprise Financial) or for any other person while in possession of insider information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall take advantage of inside information to purchase or sell or recommend or direct the purchase or sale of any security for his or her own account, for any account over which he or she has a direct or indirect beneficial interest (including an account held by or for any family member or family-related trust) or for any client. No director, officer, principal or associated person of Ameriprise Financial shall disclose inside information to any person, unless such disclosure is both authorized and necessary to effectively carry out the project or transaction for which Ameriprise Financial has been approached or engaged. No director, officer, principal or associated person of Ameriprise Financial shall engage in tipping or recommending, whether formally, informally, orally or in writing, the purchase or sale of any security based on inside information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall misappropriate confidential information in connection with the purchase or sale of securities. No director, officer, principal or associated person of Ameriprise Financial shall trade for his or her personal account with the expectation that an account managed by Ameriprise Financial will soon trade in the same security (otherwise known as front-running). 25 No director, officer, principal or associated person of Ameriprise Financial shall give consideration to any inside information furnished by any broker-dealer when recommending the allocation of brokerage to any broker-dealer. However, consistent with Ameriprise Financial's efforts to secure best price and execution, Ameriprise Financial does allocate brokerage business to broker-dealers who are in a position to supplement Ameriprise Financial's research and analysis, in order to corroborate data compiled by Ameriprise Financial's staff and to consider the views and information of others in arriving at its investment decisions. Despite these considerations, it remains Ameriprise Financial's policy that brokerage not be allocated in consideration of the furnishing of inside information. No director, officer, principal or associated person of Ameriprise Financial has any obligation to investment companies or other clients advised by Ameriprise Financial to trade or recommend trading on the basis of material non-public information in their possession. Ameriprise Financial-associated persons' fiduciary responsibility to their clients does not require that they disregard the limitations imposed by the federal securities laws, particularly Rule 10b-5. (The foregoing prohibitions apply not only to securities directly affected by the inside information, but also to any other securities that may be reasonably expected to be indirectly affected by the public disclosure of such information.) In addition to the criminal, civil and regulatory penalties described above, any person who is found to have violated these rules or who is found to have violated a federal or state securities law or regulation related to the misuse of inside information will be subject to serious sanctions by Ameriprise Financial, including termination of employment. The rules outlined above are not meant to be exhaustive of the situations that could potentially give rise to insider trading liability. They are intended to provide examples of the types of situations likely to raise significant issues with respect to the misuse of inside information. Furthermore, these examples should not be taken as a confirmation that insider trading liability would necessarily arise in each situation involving the same or similar facts. Whether such liability exists can only be determined with the assistance of counsel considering all attendant circumstances. Identifying inside information: To assist you in identifying what may be inside information, you should ask the following questions routinely when you receive either confidential commercial information or information disclosed in breach of fiduciary duties: 1. Is the information material? 2. Is the information such that an investor would consider it important in making his or her investment decisions? 3. Is the information such that it would substantially affect the market price of securities if generally disclosed? 4. Is the information non-public? 5. To whom has this information been provided? For example, has the information been effectively communicated to the marketplace through disclosure by the United Press International, the Associated Press or Reuters, or published in The Wall Street Journal or other publications of general circulation? If, after considering the above questions, you believe that the information may be material and non-public, or if you have any questions as to whether its use will violate the law, you should contact the GCO or the Compliance Department using the contact information provided below. Whenever you (or any other Ameriprise Financial-associated person) receive potentially material information about 26 an issuer that you know or have reason to believe is directly or indirectly attributable to the issuer or its insiders, you must determine that the information is public before trading on the basis or while in possession of the information or before divulging the information to any person. The information may, however, be communicated, as provided in this policy, to others who are subject to the same prohibitions on trading. If you have any question at all as to whether the information is material or whether it is inside and non-public, you must resolve the question by contacting the GCO or the Compliance Department before trading. You must not discuss the information with any Ameriprise Financial-associated person other than the business unit compliance officer in the Investment Department, or appropriate contacts in the GCO or the Compliance Department. If there are any unresolved questions in your mind as to the applicability or interpretation of the foregoing standards or the propriety of any desired action, you must discuss the matter with the GCO or the Compliance Department prior to trading or recommending trading. E. Personal Securities Trading The Enforcement Act also requires Ameriprise Financial to establish monitoring and review procedures that are reasonably designed to prevent personnel from misusing inside information. See the Ameriprise Financial Investment Adviser Code of Ethics for applicable procedures and additional information. F. Implementation of this Statement of Policy The respective Senior Vice President for each business department within Ameriprise Financial, in coordination with the Chief Compliance Officer of the applicable investment adviser, is responsible for implementing this Statement of Policy with respect to each of their respective Ameriprise Financial-associated persons. Notwithstanding the foregoing, the Chief Compliance Officer remains ultimately responsible for oversight of the implementation and enforcement of this statement of policy and is available to address any questions or concerns of any director, officer, principal or associated person of Ameriprise Financial. This Statement of Policy will be distributed to all Ameriprise Financial-associated persons and will be issued and explained to all new personnel at the time of their employment with Ameriprise Financial. In addition, at least annually and at such other times as the Chief Compliance Officer of the applicable investment adviser may determine it is necessary or appropriate, representatives of the Compliance Department and/or the GCO will meet with Investment Department personnel to review this Statement of Policy. Any amendments to this policy will also be distributed to all Ameriprise Financial-associated persons. The GCO and the Compliance Department, in coordination with the Chief Compliance Officer, will review this Statement of Policy on a periodic basis and may revise it in the light of developments in the law, questions or interpretation, and practical experience with the procedures contemplated by the Statement. G. Contacts If you have questions or comments about this policy, please contact Investment Department legal counsel in the GCO, or Investment Compliance Department. 27 Forms and Completion Instructions Below are the steps for completing the Initial Personal Account and Holdings Disclosure ("Initial Certification") Form found on pages 29 and 30: 1. Write your name, Social Security number, ID number, and Routing (or Area Office if you are in the field) on the top portion of the form. 2. Check the appropriate box in Section 1. o If you check YES in Section 1, complete all requested information in Sections 2 and 3. o If you check NO in Section 1 and you do not have accounts, but you do have holdings (i.e. physical stock certificate) to report, complete Sections 2 and 3. o If you check NO in Section 1 and you have no accounts and no holdings to report, complete Section 3. o Please note: A brokerage account is an account in which securities are bought and sold (i.e. stock, bonds, futures, options, Mutual Funds etc.). This includes employer-sponsored incentive savings plans. 3. In Section 2, state the firm name, account number, and type of ownership. If securities are held outside of a brokerage account (i.e. physical stock certificate), enter "n/a" in the firm name field. o Direct: You are the owner of the account (i.e., joint, individual or IRA ownership). o Indirect: Accounts in which you have a beneficial interest (see definition below), and that are registered in another person's name. This includes members of your household (e.g., spouse, partner, minor children, etc.). o Club: You are a member of an investment club. o Advised: You have another arrangement where you give advice and also have a direct or indirect ownership. o Managed: You have no discretion over the investments in the account. 4. Sign and date the form in Section 3. 5. Return pages 29 and 30 to Personal Trade Compliance (H26/1880) within 5 business days. ADDITIONAL INFORMATION o You must complete and return this form even if you have no accounts or holdings to disclose. o Brokerage accounts: You must disclose all brokerage accounts you own or in which you have a beneficial interest. This includes Ameriprise Brokerage and accounts held with any other broker. o Mutual Funds: You must disclose all proprietary (RiverSource) and non-proprietary (non-RiverSource) Mutual Funds held direct-at-fund, including variable annuities and variable life insurance. o 401(k)s: Reporting is required for any 401(k), 403(b), or employer-sponsored incentive savings plan held by the Associated Person. For a 401(k) held by a spouse/partner (who is not also associated with Ameriprise), report all holdings excluding non-proprietary funds. o Beneficial Interest: You must disclose accounts in which you have a beneficial interest. This includes accounts held in the name of you, your spouse/partner, or any financially dependent member of your household. Additionally, beneficial interest extends to the following types of accounts if you, your spouse/partner or financially dependent member of your household: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement, as an executor of an estate after death, or through providing investment advice for compensation o Owns an IRA o Participates in an investment club o Has another arrangement substantially equivalent to direct or indirect ownership NOTE: If none of the above beneficial interest situations apply and you are solely the beneficiary on an account, you do not need to disclose that account. For questions about securities that you are responsible for disclosing, see pages 14-15 of the Investment Adviser Code of Ethics. 28 Initial Personal Account and Holdings Disclosure Form Retail Access Persons - -------------------------------------- ----------------------------------------- Name: Social Security #: - -------------------------------------- ----------------------------------------- ID Number: Routing or Area Office #: - -------------------------------------- ----------------------------------------- Section 1 Do you or any members of your household have any brokerage or Mutual Fund account(s) (including Ameriprise Brokerage accounts) in which you have a direct or indirect beneficial interest, advise for others, have managed by another person(s), or participate in as a member of an investment club? [ ] YES If yes, complete Section 2 listing all accounts including Ameriprise Brokerage, Schwab or Merrill Lynch and all holdings within those accounts. Then complete Section 3. [ ] NO If you do not have accounts but you have holdings to report please fill out Sections 2 and 3. If you have no accounts and no holdings to report, please complete Section 3. Section 2 ACCOUNT/HOLDINGS DETAIL o Please complete all columns. o Initial page 30 if submitting electronically; sign page 30 if submitting a hard copy. o If submitting electronically, please send via e-mail to personal.trading@ampf.com. o If submitting a hard copy, please send to Personal Trade Compliance, H26/1880. o Please return this form to Personal Trade Compliance within 5 days.
- ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- Brokerage Firm Name or Security Description: Account Ownership Type / SSN Quantity Institution Name where Name or ticker symbol Number (D, I, C, A, M)* Shares or securities are held. If (or CUSIP) of Security NOTE: Only input the Social amount securities are not held in an Security number if different account, input N/A from your own - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- * D = Direct; I = Indirect; C = Club; A = Advised; M = Managed. For Ownership Type definitions, see page 28
If more space is needed, attach the additional information on a separate page. Please sign and date any attached sheets. 29 Section 3 By signing or initialing this document, I am certifying that: o The accounts listed above are the only accounts in which I have a direct or indirect beneficial interest at this time. o I understand that failure to completely disclose all of my brokerage accounts and Mutual Fund accounts to Personal Trade Compliance may result in sanctions, which could lead to termination. o If I have one or more managed accounts, I do not have trading discretion for the accounts. o I have completely filled out this certification form so a letter authorizing duplicate confirmations and statements can be sent to my broker until my accounts have been transferred to one of the three limited choice brokerage firms. o I understand that failure to completely disclose all of my security holdings to Personal Trade Compliance or failure to complete this form by the required due date may result in sanctions, which could include termination. o I will not participate in market timing of any Mutual Fund. o If I open any new brokerage accounts I will notify Personal Trade Compliance in writing by filling out a Brokerage Account Notification form before the first trade is conducted. o The securities listed above are the holdings I have at this time. I understand that failure to completely disclose all of my holdings to Personal Trade Compliance may result in sanctions, which could include termination. o I have read and understand the Ameriprise Financial Insider Trading Policy and Investment Adviser Code of Ethics document and will abide by them. - ----------------------------------------- --------------------------- Signature Date Return to: Personal Trade Compliance-- H26/1880 30 Brokerage Account Notification Form Process On the following page is the Employee Notification Form that is required to be completed if you--or an immediate family member--maintains an external brokerage account. The brokers other than Ameriprise Financial Brokerage that are allowed at this time are Schwab or Merrill Lynch only. Please be sure to: o Fill out the broker information section. o Fill out the Access Person information section. Be sure to include family members' information if applicable. o Please send the form to Personal Trade Compliance H26/1880 no later than 5 days after receiving this packet. Reminder: Please submit this form prior to any trading If you have questions, please send a Lotus Note addressed to: Personal Trading or contact the Personal Trade Hotline at 612-671-5196. 31
***This is not an account transfer form and will not cause your securities to move*** BROKERAGE ACCOUNT NOTIFICATION FORM When to use this form: Ameriprise Financial personnel are required to complete this form when opening any new brokerage account (including new accounts opened to support an account transfer). STEP 1: COMPLETE EMPLOYEE INFORMATION SECTION ------------------------------------- ----------------------------------------------------------------------------------------- Name (First and Last) ------------------------------------- ----------------------------------------------------------------------------------------- ID Number (eg., E12345) / Position / [ ] Corporate Office Employee [ ] P1 Advisor [ ] Field Employee ------------------------------------- ----------------------------------------------------------------------------------------- Social Security Number ------------------------------------- ----------------------------------------------------------------------------------------- Field or Corporate Office Routing ------------------------------------- -----------------------------------------------------------------------------------------
STEP 2: COMPLETE BROKERAGE ACCOUNT INFORMATION SECTION
--------------------- --------------------- ---------------------------- -------------- --------------------------------------- Broker Dealer (choose one) --------------------------------------- Name on Account Account Number Social Security Number Ownership * Ameriprise Charles Merrill Financial Schwab Lynch Brokerage ===================== ===================== ============================ ============== ============== ============ =========== --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- --------------------- --------------------- ---------------------------- -------------- -------------- ------------ ----------- * E.g. Individual, Joint, IRA, UTMA/UGMA, spousal IRA, etc.
STEP 3: SUBMIT COMPLETED FORM TO PERSONAL TRADE COMPLIANCE A. To submit via Interoffice mail, send to Personal Trade Compliance, H26 / 1880. B. To submit via Lotus Notes, attach completed form and send to Personal Trading. 32 Limited Choice Exception Request Complete this form if one of the situations described below applies to you and you wish to request an exception to the limited choice policy of conducting trading through one of the three authorized firms. Exception Policy - The typical kinds of situations for which Personal Trade Compliance expects exception requests include: A. spouse accounts where spouse of Ameriprise Financial employee works for a broker/dealer firm that prohibits outside accounts (supporting documentation to include copy of other firm's policy) B. accounts for the express business purpose of gaining competitive intelligence about other firm's practices (supporting documentation to include leader approval and specific business purpose for request) C. non-transferable limited partnership interests held prior to implementation of limited choice policy (supporting documentation to include copies of statements reflecting these holdings) Note: Other holdings and trading would remain subject to limited choice D. managed accounts where, e.g., employee has authorized broker to exercise investment discretion on employee's behalf and employee has no discretion over what specific securities are traded in account (supporting documentation to include: power of attorney document signed by employee and written representations from employee and from broker that employee has no trading discretion)
Section 1. Request for Exception (completed by employee, please print) Employee Name: Employee ID: Routing: - ------------------------------------------------------------------------------------------------------------ [ ] CORPORATE OFFICE [ ] P1 ADVISOR [ ] FIELD EMPLOYEE Exception type described above (also attach supporting documentation): |_| A |_| B (leader approval - print leader's name _________________ leader signature_______________________) |_| C |_| D |_| Other - explain in sufficient detail on an attachment Broker Name: Account # - ------------------------------------------------------------------------------------------------------------ Account Ownership: - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ Employee Signature Social Security # Date Section 2. Exception Review (completed by Personal Trade Compliance) [ ] Request on hold, more documentation needed - Please provide: [ ] Request Denied [ ] Request Approved - ------------------------------------------------------------------------------------------------------------ 1st Level Approval Date - ------------------------------------------------------------------------------------------------------------ 2nd Level Approval Date
33 Investment Club Client Disclosure Form I was a member of the ____________________________ Investment Club before (club name) becoming a client of Ameriprise Financial, Inc. or its affiliates. I understand that ___________________________________ is a financial advisor with (Financial Advisor name) Ameriprise Financial Services, but is not acting in his/her capacity as a financial advisor with Ameriprise Financial Services through his/her participation in this club. I also understand Ameriprise Financial, Inc. and its affiliates do not endorse, approve, or guarantee any activity undertaken by this club. Furthermore, I understand Ameriprise Financial, Inc. and its affiliates are not responsible for this club's investment performance, investment results, and/or any other direct or indirect financial impact to me as a result of my participation in this club. - ---------------------------------------- -------------- Client signature Date - ---------------------------------------- -------------- Financial Advisor signature Date Send to Personal Trade Compliance - H26/1880. 34 INVESTMENT ADVISER CODE OF ETHICS FOR RETAIL ACCESS PERSONS: P2 ADVISORS & EMPLOYEES OF P2 ADVISORS AMERIPRISE FINANCIAL, INC. AND ITS AFFILIATES October 26, 2005 1
Investment Adviser Code of Ethics Ameriprise Financial, Inc. and its Affiliates Topic Page Overview Required Standards of Business Conduct 3-5 General Policy on Accepting Gifts 5 Fiduciary Principles 6 Personal Trading Rules Framework Applicability 7 General Rules 8-9 Basis For Rules 10 Definitions 10-11 Reporting Requirements for Retail Access Persons Security Activities Which Must Be Reported 12 How To Comply 12 Reporting Chart 14-15 Additional Rules & Reporting Requirements Limited Offering (Private Placement) Preclearance 16 Initial Holdings Disclosure & Annual Certification 17 Quarterly Reporting and Certification 17 Investment Clubs 18 Sanctions 19 Unusual Trading Activity 19 Responsibilities of the Chief Compliance Officer 20 Ameriprise Financial Insider Trading Policy 21-27 Forms & Completion Instructions Initial Brokerage and Mutual Fund Account and Personal Holdings Certification 28-30 407 Notification Instructions & Form 31-32 Investment Club Client Disclosure Form 33
2 Overview As a condition of your continued employment or association with Ameriprise Financial, Inc. or its affiliates ("Ameriprise Financial"), you are required to read, understand, and fully comply with this Code of Ethics. The Code of Ethics also incorporates into its terms and requirements the provisions of other important documents to which you are subject; namely, the Ameriprise Financial Code of Conduct and, for financial advisors and their employees, the Compliance Resource Guide. It is your personal responsibility and accountability to avoid any conduct that could create a conflict, or even the appearance of a conflict, with our clients' interests, or do anything that could damage or erode the trust our clients place in Ameriprise Financial. This is the spirit of the Code of Ethics. Every person has the absolute obligation to comply with both the letter and the spirit of the Code. Failure to comply with its spirit is just as much a violation as a failure to comply with the written provisions of the Code. In this regard, you should also be aware that it is impossible for the Code of Ethics to cover every situation you may encounter. In those situations that are not specifically covered by the Code we must follow the spirit of the Code. If you are uncertain as to the appropriate course of action you should take, you should seek immediate assistance from your leader, the Chief Compliance Officer or the Office of the Ombudsperson before acting. If the Code of Ethics is silent on a particular matter, it does not authorize conduct that violates the spirit of the Code. The Code covers not only the activities you perform on a day-to-day basis, but also your personal securities transactions as well as those of certain of your family members and entities (such as corporations, trusts, or partnerships) that you may be deemed to control or influence. Appropriate sanctions will be imposed for violations of the Code of Ethics. Sanctions may include bans on personal trading, financial penalties, disgorgement of trading profits, suspension of employment, and/or termination of employment or association with Ameriprise Financial. Repeat violations of the Code will result in progressively stronger sanctions. Self-reporting a violation of the Code will be considered in determining the appropriate sanction for the violation. This Code will be provided to all individuals who are subject to its terms. After you receive and review the Code you must certify that you have received, read and understand the document and agree that you are subject to it and will comply with it. You will also be required to provide similar certifications when the Code is amended. On an annual basis you will also be asked to provide a re-certification and represent that you have complied with the Code during the past year. The initial certification form is attached. 3 Required Standards of Business Conduct Under this Code of Ethics all supervised persons of Ameriprise Financial must comply with Ameriprise Financial's standards of business conduct. These standards are the following: o Compliance with all applicable laws and regulations, including the federal securities laws and our fiduciary obligations; o Compliance with this Code of Ethics; o Compliance with the Ameriprise Financial Code of Conduct; o Compliance with all other policies and procedures applicable to your position and assigned responsibilities; o Financial advisors and their employees must also comply with the Compliance Resource Guide. These standards apply to all individuals, at all levels of the organization. Compliance with applicable laws and regulations is mandatory for everyone and is not subject to business priorities or individual discretion. If at any time you have a question about the legality of a course of action you should consult with the General Counsel's Office before proceeding. The Investment Advisers Act of 1940 imposes a fiduciary duty on an investment adviser to act in utmost good faith with respect to its clients, and to provide full and fair disclosure of all material facts, particularly where the adviser's interests may conflict with the client's. The Adviser has a duty to deal fairly and act in the best interests of its clients at all times. All employees of Ameriprise Financial must comply with the Ameriprise Financial Code of Conduct. The Code of Conduct deals with issues covering, among other things, the acceptance of gifts, service on the boards of public companies and other outside activities. For specific guidance on these and other topics that may not be specifically covered by the Code of Ethics you should refer to the Code of Conduct and the Compliance Resource Guide. All financial advisors associated with Ameriprise Financial must comply with the Compliance Resource Guide. Besides referring to the Code of Ethics and the Code of Conduct, you should also refer to the Compliance Resource Guide for guidance in a particular situation. The provisions of the Code of Ethics and the Compliance Resource Guide should not conflict. In the event the provisions of the Code of Ethics or the Compliance Resource Guide conflict or appear to conflict with those contained in the Code of Conduct you should follow the guidance contained in the Code of Ethics or Compliance Resource Guide. If at any time you feel there is ambiguity as to what the appropriate course of action should be in a particular situation you should immediately seek assistance from the General Counsel's Office or the Compliance Department before you act. You are also subject to compliance policies and procedures and other policies and procedures adopted by the organization. You are responsible for being familiar with and complying with these policies and procedures. If you are uncertain as to these additional policies and procedures to which you are subject, you should speak with your leader. As described in greater detail below, the Code of Ethics also addresses personal securities trading activities in an effort to detect and prevent illegal or improper transactions. 4 Under this Code of Ethics you have a duty to promptly report any violation or apparent violation of the Code of Ethics (including the Code of Conduct and Compliance Resource Guide) to the Chief Compliance Officer. You can also report violations or possible violations to the Office of the Ombudsperson. This duty exists whether the violation or apparent violation is yours or that of another employee or associated person of Ameriprise Financial. All such reports will be treated confidentially to the extent permitted by law and will be investigated promptly and appropriately. Ameriprise Financial prohibits retaliation against individuals who report violations or apparent violations of the Code in good faith and will treat any such retaliation as a further violation of the Code. However, it must be understood that employees or associated persons of Ameriprise Financial who violate the Code are subject to sanctions for the violation even if they report the violation. General Policy on Accepting Gifts Instances may arise where a person or organization offers you a gift. When being offered a gift, the Ameriprise Financial Code of Conduct should serve as your primary guide to determining whether or not a gift is acceptable. The Code of Conduct states: " You may accept entertainment, token gifts or favors only when the value involved is not significant and clearly will not place you under any real or perceived obligation to the donor." See section on Gifts in the Code of Conduct. When receiving a gift, it is imperative to avoid even the appearance of a conflict of interest, regardless of the value of the gift. Sometimes a situation may be unclear. If you are unsure whether to accept a gift, talk with your leader. If your leader is unsure, or feels an exception should be made, s/he should contact the Compliance Department for guidance. Above all, the decision should comply with the spirit of the Code of Conduct and this Code of Ethics. 5 Fiduciary Principles The following general fiduciary principles shall govern your activities and the interpretation and administration of these rules: o The interests of our clients (including Mutual Fund shareholders) must be placed first at all times. o All personal trading transactions must be conducted consistent with the rules contained in this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual's position of trust and responsibility. o Company personnel should not take inappropriate advantage of their positions. In connection with providing investment management services to clients, this includes prohibiting any activity which directly or indirectly: o Defrauds a client in any manner; o Misleads a client, including any statement that omits material facts; o Operates or would operate as a fraud or deceit on a client; o Functions as a manipulative practice with respect to a client; and o Functions as a manipulative practice with respect to securities. These rules do not identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield company personnel from liability for personal trading or other conduct that is designed to circumvent its restrictions or violates a fiduciary duty to our clients. 6 Personal Trading Rules Framework Applicability These rules apply to securities trading in which you have a beneficial ownership. Beneficial ownership includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where they give advice and also have a direct or indirect ownership. 7 General Rules These general rules, along with the procedures contained in the rest of this document, must always be followed: 1. No use of inside information (refer to "Ameriprise Financial Insider Trading Policy" on page 21). 2. No front-running. This involves an individual taking advantage of non-public information about imminent trading activity in our Mutual Funds or other advised accounts by trading in a security before the fund or advised account does. You are not allowed to trade in a particular security ahead of, or at the same time as, your clients' accounts. 3. No misuse of material non-public information relating to Mutual Funds, including information relating to portfolio holdings or pricing. 4. No Access Person shall divulge to any person any client holdings, any recommendation made to a client, or any contemplated or completed securities transactions or trading strategies of a client, except as required in the performance of his or her duties and only to the extent such other person has a need to know such information to perform his or her duties. Disclosures of any past, current or contemplated client holdings must be consistent with the Portfolio Holdings Disclosure policy. 5. No market timing (short-term trading) in shares of Mutual Funds. This prohibition applies across all accounts in which you have a beneficial interest (so that you cannot buy shares of a Mutual Fund in one account and sell them from another account in market timing transactions), including the Ameriprise Financial 401(k) Plan and Mutual Funds underlying a variable annuity and variable life insurance contracts. This prohibition also applies to investments through pooled investment vehicles, such as hedge funds, that may engage in market timing. You are responsible for ensuring that no pooled investment vehicle in which you invest engages in market timing. If you invest in a hedge fund whose offering document does not state whether the hedge fund engages in market timing of Mutual Funds, you should obtain written assurance from the hedge fund that it does not engage in market timing of Mutual Funds. 6. No purchasing of initial public offerings (this includes secondary issues of equity or fixed income) 7. No preferential treatment from other brokerage firms due to the purchaser's employment by or association with Ameriprise Financial. 8. No direct trades with broker/dealers' trading desks. 9. No non-retail relationships with broker/dealers. 8 10. No use of Ameriprise Financial's name (or the name of any of its subsidiaries) to obtain a better price from a broker who is a market maker in the security being traded. 11. No speculative trading of Ameriprise Financial stock, which is characterized by transactions in "put" or "call" options, or short sales or similar derivative transactions. Ameriprise Financial discourages short-term trading in its own stock. (You are allowed to exercise any Ameriprise Financial stock options you have received as a result of your employment with the Company. Members of the Executive Leadership Team, however, must preclear these trades through the Corporate Secretary's office.) 12. No stopping stock. This is defined as a guarantee by a specialist that an order placed by a Floor Broker will be executed at the best bid or offer price then in the Specialist's book unless it can be executed at a better price within a specified period of time. 13. If the company's managed or owned accounts are active in a given security, no use of that security to meet margin calls if cash or other securities are available to meet the call. 14. An Access Person shall use his or her best judgment in giving investment advice to clients and shall not take into consideration his or her personal financial situation or interests in doing so. 15. When engaging in a personal securities transaction, an Access Person shall always place the interests of clients first and avoid any actual or potential conflict of interest or abuse of his or her position. 16. Required forms must be filled out completely, accurately and on a timely basis. This includes quarter end reports. Violations of the Code, including late filing of periodic reports will be reported to Senior Management and the RiverSource Investments, LLC Funds Board of Directors. Important: o Obligation to Report Violations: Any person who discovers that he or she or another person has violated or apparently violated these general rules or other provisions of Code must promptly report the matter to the Chief Compliance Officer. o Personal Trading Records Subject To Review By Regulators: The SEC and the NASD have the authority to review individuals' personal trading records. It is not unusual in the course of regulatory exams for the examiners to interview individuals about their trading activity violations of the Code of Ethics. o Even if you receive preclearance, you cannot be ensured that you have not violated the Code. o The Compliance Department has the authority to review records and request additional information. o The privacy of your reported information is extremely important and will be held in the utmost confidence. 9 Basis for Rules The rules and procedures that apply to personal trading for Retail Access Persons are derived from: Securities and investment laws o Securities Act of 1933 o Securities Exchange Act of 1934 o Investment Company Act of 1940 o Investment Advisers Act of 1940 o Insider Trading and Securities Fraud Enforcement Act of 1988 Rules, regulations and corporate policies o Securities and Exchange Commission (SEC) o National Association of Securities Dealers (NASD) o Ameriprise Financial Insider Trading Policy o Ameriprise Financial Code of Conduct Investment Company Institute (ICI) Guidelines to Industry on Personal Investing Definitions This Investment Adviser Code of Ethics for Retail Access Persons applies to all P2 Advisors and their employees. Access Persons: supervised persons and other persons who are employees or associated persons of Ameriprise Financial, who have access to nonpublic information regarding clients' purchase or sale of securities or non public information regarding the portfolio holdings of Proprietary Funds, are involved in making securities recommendations to clients, or who have access to recommendations that are nonpublic. Retail Access Persons: Access Persons who have access only to Ameriprise Financial retail client information. Investment Access Persons: Access Persons who have access to Ameriprise Financial / RiverSource institutional client information. Investment Access Persons are also subject to rule 17j-1 under the Investment Company Act of 1940. Limited Offerings (Private Placements): A Limited Offering is an offering of securities exempt from registration due to exemptions for the size of offering and the number of purchasers as defined under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) (14 U.S.C. 77d(2) or 77d(6) or pursuant to Rule 504, 505 or 506 of Regulation D under the Securities Act of 1933. Limited Offerings include Private Placements. You are not allowed to invest in Limited Offerings (Private Placements) without preclearance - see page 16. Supervised Person: any partner, officer, director (or other person occupying a similar status or performing similar functions), or an employee of an investment adviser, or other person who 10 provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser. Mutual Funds: U.S. registered open-end investment companies the shares of which are redeemable on any business day at the net asset value, including Mutual Funds that underlie variable annuity and variable life insurance contracts. Proprietary Funds: investment companies that are registered with the SEC and for which Ameriprise Financial / RiverSource serves as an Investment Adviser. Non-proprietary Funds: investment companies that are registered with the SEC and are not Proprietary Funds. 11 Reporting Requirements for Retail Access Person P2 Advisors and their Employees Securities Activities Which Must Be Reported All personal securities trading activities (i.e., stocks, options, bonds, Mutual Fund shares, etc.), whether bought or sold, must be reported, with the exception of such things as money market mutual funds and certificates of deposit. See "How to Comply" section below for more information. A chart indicating which transactions must be reported is located on pages 14-15. You must report activity involving securities trading in which you have a beneficial ownership. This includes accounts held in the name of any of the following individuals: o You o Your spouse/partner o Financially dependent members of your household In addition, these rules apply to the following types of accounts if any of the individuals listed above: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement or as an executor of an estate after death o Owns an IRA o Participates in an investment club o Has another arrangement where you give advice and also have a direct or indirect ownership. Failure to disclose all brokerage and Mutual Fund accounts is a violation of the Code and may result in a sanction, which includes possible termination. How To Comply You must report all personal securities transactions for the types of accounts listed above in one of two ways: 1. Conduct all your securities transactions in an Ameriprise Financial Brokerage. account. If you choose this alternative, notify Personal Trade Compliance by sending a Lotus Note listing your account number(s) to: Personal Trading. 2. Conduct your securities transactions with an outside brokerage firm--traditional or online. If you choose to open or maintain an account with any other brokerage firm, you must perform the following steps at the time the account is opened: o Contact Personal Trade Compliance by sending a Lotus Note to Personal Trading and request a 407 Notification Form before opening an external brokerage account. This form needs to be completed because it notifies the external brokerage firm to provide duplicate confirmations and 12 monthly statements for your account(s) and for those in which you have a beneficial interest. Failure to properly carry out this notification process may result in a sanction. o Fully disclose any information the brokerage firm legally requests. o Notify your broker that you work for Ameriprise Financial, a broker/dealer, and ensure that Personal Trade Compliance is provided with duplicate statements and confirmations for your account(s). 13 Securities Reporting for Retail Access Persons
--------------------------------------------------------- This chart indicates which securities must be disclosed Is reporting required for these transactions? with your initial and annual certification. American Depository Receipts/Shares/Units Yes (ADRs/ADSs/ADUs) - --------------------------------------------------------- --------------------------------------------------------- Annuities - Fixed No (other than market value adjusted annuities) - ------------------------------------------------------------------------------------------------------------------- Annuities - Variable and market value adjusted annuities Yes - --------------------------------------------------------- --------------------------------------------------------- American Express Stock Yes - --------------------------------------------------------- --------------------------------------------------------- (Options on) American Express Stock (i.e., puts and Ban has been lifted calls)* - --------------------------------------------------------- --------------------------------------------------------- American Express stock options (obtained as a part of an Yes incentive plan)* - --------------------------------------------------------- --------------------------------------------------------- Ameriprise Financial Stock * Yes Executive Leadership Team need to preclear with the Corporate Secretary's office - --------------------------------------------------------- --------------------------------------------------------- (Options on) Ameriprise Financial Stock (i.e., puts and Prohibited calls)* - --------------------------------------------------------- --------------------------------------------------------- Ameriprise Financial stock options (obtained as a part Yes of an incentive plan)* Executive Leadership Team need to preclear with the Corporate Secretary's office - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: corporate Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: convertible Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other direct debt instruments of the U.S. No Government: (e.g. Treasury notes, bills, bonds or STRIPS) - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: U.S. Guaranteed or of Yes federally sponsored enterprises (FHLMC, FNMA, GNMA, etc.) - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: Municipal Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: Church Yes - --------------------------------------------------------- --------------------------------------------------------- Bonds and other debt instruments: closely held Yes - --------------------------------------------------------- --------------------------------------------------------- Bank certificates of deposit, Savings Certificates, No checking and savings accounts and money market accounts. bankers' acceptances, commercial paper and high quality short-term debt instruments, including repurchase agreements. - --------------------------------------------------------- --------------------------------------------------------- Closed-end funds: including registered fund of hedge Yes funds - --------------------------------------------------------- --------------------------------------------------------- Derivatives (DECS, ELKS, PRIDES, etc.) Yes - --------------------------------------------------------- --------------------------------------------------------- Futures: commodity, currency, financial, or stock index Yes - --------------------------------------------------------- --------------------------------------------------------- Index Securities - (S&P 500, SPDRS/SPY, Diamonds/DIA, Yes Cubes/QQQ, etc., Exchange Traded Funds, Holders Trusts - --------------------------------------------------------- --------------------------------------------------------- Limited Offerings / Private Placements - Equity and Yes - on quarterly form Fixed Income Preclearance is required see page 16 - --------------------------------------------------------- --------------------------------------------------------- Limited Partnerships Yes - --------------------------------------------------------- ---------------------------------------------------------
14
--------------------------------------------------------- This chart indicates which securities must be disclosed Is reporting required for these transactions? with your initial and annual certification. American Depository Receipts/Shares/Units Yes (ADRs/ADSs/ADUs) - --------------------------------------------------------- --------------------------------------------------------- Limit order Yes - --------------------------------------------------------- --------------------------------------------------------- Managed or wrap accounts: o If individual securities held and investor has Yes ability to exercise trading discretion o If individual securities held and investor does not have ability to exercise trading discretion Yes - --------------------------------------------------------- --------------------------------------------------------- Mutual Funds (other than money market mutual funds) Yes - --------------------------------------------------------- --------------------------------------------------------- Money market mutual funds No - --------------------------------------------------------- --------------------------------------------------------- Options on stocks Yes - --------------------------------------------------------- --------------------------------------------------------- Options: exercise of option to buy or sell underlying Yes stock - --------------------------------------------------------- --------------------------------------------------------- Options on futures and indices (currency, financial, or Yes stock index) - --------------------------------------------------------- --------------------------------------------------------- REITS (Real Estate Investment Trusts) Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks: common or preferred (you do not need to report Yes Dividend Reinvestment Plans - DRIPS unless you are a grade 45 or above) - --------------------------------------------------------- --------------------------------------------------------- Stocks: convertible preferred Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks: short sales (short sales prohibited on Yes Ameriprise Financial stock) - --------------------------------------------------------- --------------------------------------------------------- Stocks (owned) - exchanges, swaps, mergers, tender offers Yes - --------------------------------------------------------- --------------------------------------------------------- Stocks - public offerings (initial OR secondary) Prohibited - --------------------------------------------------------- --------------------------------------------------------- Stocks - Rights or warrants acquired separately Yes - --------------------------------------------------------- --------------------------------------------------------- Unit Investment Trusts (UITs) Yes - --------------------------------------------------------- ---------------------------------------------------------
* Incentive awards of Ameriprise Financial stock options, restricted stock and portfolio grants and the sale through Ameriprise Financial of a part of these shares to cover taxes at the time of vesting or exercise are subject to reporting. In addition, other holdings, purchases and sales of Ameriprise Financial stock are required to be reported. Special note for 401(k)'s: reporting is required for any 401(k) or an employer sponsored incentive savings plan held by the Access Person. For any 401(k) held by a spouse who is not also an Access Person, reporting is only required on Ameriprise Financial / RiverSource Proprietary Fund holdings or any other reportable security indicated above. In other words, an Access Person does not need to report Non-proprietary Funds held in a spouse's 401(k) plan. Special note for automatic investment plans: you do not need to report transactions that are made as part of a regular periodic purchase (or withdrawal). For example: payroll deduction, bank authorizations etc. 15 Additional Rules & Reporting Requirements Limited Offerings (Private Placement) Preclearance - Equity and Fixed Income All Access Persons need to obtain approval to invest in any Limited Offerings (private placements), i.e., a security not offered to the public. Approvals must be obtained in writing from your leader or registered principal and Personal Trade Compliance prior to investing. How to obtain approval - Write an explanation of the investment and submit the request to your Leader or Registered Principal. Included in the request should be an explanation of: o the nature of the investment o how you were solicited o approximate dollar amount you are planning to invest o whether or not the opportunity was being offered to any of Ameriprise Financial / RiverSource's managed accounts or to any of your clients o whether the security is likely to be purchased by an Ameriprise Financial / RiverSource managed account or any of your clients in the future. In considering whether to make a request, consider whether your investment might create a conflict with a business interest of Ameriprise Financial. See the Ameriprise Financial Code of Conduct and the Compliance Resource Guide. How Limited Offerings/private placements are approved - Your leader or registered principal will approve or reject your request, and return the request to you. If approval is granted, send the request via lotus notes to "Private Placement Preclearance". You cannot enter into the proposed transaction without approval from Personal Trade Compliance. Personal Trade Compliance will respond to you requesting any additional information or further documentation needed to make a decision. Upon receipt of all necessary documentation, Personal Trade Compliance will then confirm in writing whether you can invest. If your investment is approved, you must report the investment on the quarterly reporting form, which will be provided to you. If you have questions about how the private placement approval process applies to a transaction you are considering, please contact us by sending a lotus note to "Personal Trading" or call us at 612-671-5196 before you invest. 16 Failure to completely and accurately disclose brokerage & Mutual Fund accounts, holdings and quarterly non-brokerage activity by the time frames specified by Personal Trade Compliance is a violation of the Code and may result in a sanction, which includes possible termination. Initial Holdings Disclosure New access persons must disclose certain securities holdings in which they have a beneficial interest. All new Access Persons will receive a copy of the Code of Ethics that applies to them and that includes an Account Certification and Holdings Disclosure form. This document must be returned to Personal Trade Compliance H26/1880 within 10 days. An example of this form is located on pages 29-30. Annual Certification and Annual Holdings Disclosure In addition to reporting requirements already outlined, every Access Person must submit an annual certification form. If you are new to the company, you will receive a form and instructions when you attend your orientation session. If you do not attend this orientation session, please contact the Personal Trade area 612-671-5196 for the information. All Access Persons must also disclose annually certain securities holdings in which they have a beneficial interest. Failure to disclose annual holdings by the time frames specified by Personal Trade Compliance may result in a sanction, which includes possible termination. All Access Persons will receive a form electronically on an annual basis from Personal Trade Compliance. You should document your account(s) certification and holdings disclosures on this form. Quarterly Reporting and Certification Personal Trade Compliance will send you a form each quarter to indicate whether, for a given calendar quarter, you executed securities transactions outside of a broker-dealer account or engaged in transactions in Mutual Funds as identified on the quarterly reporting form. You must return the quarterly reporting form to Personal Trade Compliance within 30 calendar days of the last day of the quarter. You will also be asked to certify quarterly that you have complied with the provisions of this Code of Ethics relating to transactions in Mutual Funds including prohibitions on market timing and the misuse of material non-public information relating to Mutual Funds, including information relating to portfolio contents or pricing. 17 Investment Clubs There is no prohibition against joining an investment club. When forming an investment club, please provide the following to Personal Trade Compliance: o a copy of the 407 Notification Form (see page 32) o a copy of your investment club's bylaws o a listing of the members of the club and an indication if any members are employees, independent contractors or associated persons of Ameriprise Financial. Please include the individual's employee, Advisor, or contractor identification number. o the contact person for the club in case of questions Advisors You may not solicit clients of Ameriprise Financial to become investment club members, due to possible conflicts of interest. If an existing member of your investment club later becomes your client, you must obtain a written and signed disclaimer from him/her immediately. A sample copy of the disclaimer is attached on page 33. This disclaimer must state the investment club relationship was pre-existing and entered into freely, and the client understands Ameriprise Financial in no way endorse, approve, or guarantee any activity undertaken by the club. Furthermore, the client/club member's understands Ameriprise Financial have no responsibility for the financial results due to his/her participation in the club. A completed copy of the Client Disclosure Form must be routed to Personal Trade Compliance immediately. 18 Sanctions Sanctions will be imposed for violations of Ameriprise Financial, SEC, or NASD rules or policies. These sanctions are communicated via violation letters and may vary depending on the severity of the violation, if a record of previous violations exists and/or the violation was self-reported. Examples of potential sanctions include (but are not limited to): o a written reminder about the rules (with a copy to the individual's manager) o prohibition against personal trading for a specific period of time o forfeiture of trading profits o monetary fine o negative impact on the individual's bonus or other compensation and or performance rating o termination A written record of each violation and sanction is maintained by Personal Trade Compliance. Unusual Trading Activity The Personal Trade Committee and your department head review your personal trading activity regularly. We may ask to review specific transactions with you or your broker if clarification is necessary. You may also be asked to supply Personal Trade Compliance with a written explanation of your personal trade(s). Examples of situations that may require a memo of explanation include, but are not limited to: o violations of personal trading rules o trades in a security shortly before our Investment Department trades in the same security on behalf of a client o patterns of personal trading that are similar to your clients' trading o significant changes in trading volume o patterns of short-term, in and out trading o significant positions in illiquid securities o a number of employees trading in the same security in the same time frame 19 Responsibilities of the Chief Compliance Officer, or their delegate, related to Personal Trading Process and Responsibility The Chief Compliance Officer, or their delegate, has primary responsibility for enforcing the Code. The Personal Trade Committee (PTC) reviews all alleged personal trading violations and any sanctions applied. If the alleged violator is the Chief Compliance Officer, the matter must be reported to the PTC and the General Counsel of the firm. Opportunity to Respond A person charged with a violation of the Code shall have the opportunity to appear before the person or persons enforcing the Code and to respond to all charges, orally or in writing. Initial Holdings Report; Annual Holdings Report The Chief Compliance Officer, or their delegate, shall review and maintain all initial and annual holdings reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Quarterly Personal Trading Reports The Chief Compliance Officer, or their delegate, shall review and maintain all quarterly transaction reports. Completion of the review shall be indicated on the report itself and shall involve such considerations as the Chief Compliance Officer, or their delegate deems necessary to enforce the provisions and intent of this Code. Pre-Clearance The Chief Compliance Officer, or their delegate, shall review and approve or disapprove all Access Person requests to pre-clear securities transactions. Such review shall involve such considerations as the Chief Compliance Officer, or their delegate, deems necessary to enforce the provisions and intent of this Code. Violations or Suspected Violations If the Chief Compliance Officer, or their delegate becomes aware of a violation or suspected violation of the Code as a result of such review, the Chief Compliance Officer, or their delegate, shall take whatever steps deemed necessary to enforce the provisions of the Code, including consulting with outside counsel. Record Retention Records are required to be kept for seven years (a minimum of two years on site). 20 Ameriprise Financial Insider Trading Policy Ameriprise Financial's Statement of Policy and Procedures with Respect to the Receipt and Use of Material Non-Public Information This statement represents the policy of Ameriprise Financial, Inc. and its affiliates (collectively "Ameriprise Financial")(1) with regard to the receipt and use of material non-public information. If you have any questions or comments about this policy, please contact either the General Counsel's Office (the "GCO") or the Compliance Department using the contact information provided at the end of this policy. A. General Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), Rule 10b-5 enacted thereunder and court and Securities and Exchange Commission ("SEC") administrative decisions interpreting these and other relevant provisions make it unlawful for any person to trade or to recommend trading in securities while in the possession of material non-public ("inside") information. More specifically, the above-referenced provisions and interpretations make it unlawful for a corporate insider to trade while in the possession of inside information. They also make it unlawful for someone who is not a corporate insider to trade while in possession of inside information, when the information is disclosed to the non-insider in violation of an insider's duty to keep it confidential, when the non-insider has a duty to keep the information confidential or when the information is misappropriated (i.e., stolen). Finally, communicating material non-public information to others generally is unlawful. In light of the above and in compliance with the requirements of Section 204A of the Investment Advisers Act of 1940 (the "Advisers Act'), Rule 206(4)-7 enacted thereunder and the Insider Trading & Securities Fraud Enforcement Act of 1988 (the "Enforcement Act"), Ameriprise Financial prohibits any director, officer, principal or associated person from trading on the basis of or otherwise misusing inside information. The material that follows provides further explanation of what constitutes inside information and of the prohibition on its misuse. The description below is not exhaustive and does not cover every situation. You should contact the GCO or the Compliance Department if you have questions or concerns. B. What is "Inside Information"? The term "inside information" is broadly construed by the courts and regulatory authorities. Generally, it includes "material" information, which is "non-public" and has been provided on a confidential basis or in breach of a fiduciary duty. It includes information about a company or another issuer (including a government entity) or the market for the company's or other issuer's securities that has come directly or indirectly from the company or other issuer and that has not been - -------- (1) For purposes of clarity, this statement does not apply to Threadneedle Asset Management Holdings Ltd. and its subsidiaries, each of which has its own insider trading policies and procedures. 21 disclosed generally to the marketplace. In addition to the issuer, inside information can come from persons with access to the information, including not only the issuer's officers, directors and other employees, but also its auditors, investment bankers and attorneys. Consultants to the issuer or to Ameriprise Financial are other examples of persons who might be sources of inside information. Material Information: Information is "material" if its dissemination is likely to affect the market price of any of the company's or other issuer's securities or is likely to be considered important by reasonable investors, including reasonable speculative investors, in determining whether to trade in such securities. Other information may or may not be material, depending on its specificity, its magnitude, its reliability and the extent to which it differs from information previously publicly disseminated. Though there is no precise, generally accepted definition of materiality, information is likely to be material if it relates to significant changes affecting matters such as: 1. Dividend or earnings expectations; 2. Changes in previously released earnings estimates; 3. Write-downs or write-offs of assets; 4. Additions to reserves or bad debts or contingent liabilities; 5. A significant increase or decrease in orders; 6. Expansion or curtailment of company or major division operations; 7. Proposals or agreements involving a joint venture, merger, acquisition, divestiture or leveraged buy- out; 8. A purchase or sale of substantial assets; 9. New products or services; 10. Exploratory, discovery or research development; 11. Criminal indictments, civil litigation or government investigation; 12. Disputes with major suppliers or customers; 13. Labor disputes including strikes or lock-outs; 14. Substantial changes in accounting methods; 15. Debt service or liquidity problems; 16. Extraordinary borrowings; 17. Bankruptcy or insolvency; 18. Extraordinary management developments; 19. Public offerings or private sales of debt or equity securities; 20. Calls, redemptions or purchases of the company's own stock; 21. Issuer tender offers; or 22. Recapitalizations. If you are dealing with such information, presume it is material and contact the GCO or the Compliance Department so they can assist you in determining whether it is in fact material. Inside information about a company or other issuer can also be material because of its expected effect on a particular class of a company's securities, all of the company's securities, the securities of another company or issuer or the securities of several companies or issuers. Moreover, the resulting prohibition against the misuse of inside information reaches all types of securities (whether stock or other equity interests, corporate debt, government or municipal obligations, or commercial paper) as well as any option related to that security (such as a put or call, or an index security if the nonpublic information is material to the index security). 22 Non-public Information: In order for information to qualify as inside information, it must not only be material, it must be "non-public." Non-public information is information that has not been made available to investors generally. It includes information received in circumstances indicating that it is not yet in general circulation. It also includes situations in which the recipient knows or should know that the information could only have been provided directly or indirectly by the issuer or its insiders. Once material non-public information has been released to the investing public, it loses its status as inside information. However, for non-public information to become public, it must be disseminated through recognized channels of distribution designed to reach the securities marketplace. To show that material information is public, you should be able to point to some fact verifying that the information has become generally available. For example, disclosure in a national business and financial wire service (e.g., Dow Jones or Reuters), by a national news service (e.g., the Associated Press or United Press International) publication in a local newspaper, in a national newspaper (e.g., The Wall Street Journal or The New York Times) or in a publicly disseminated disclosure document (e.g., a proxy statement or a prospectus) would all be sufficient to consider the information generally available. The circulation of rumors or "talk on the street," even if accurate, widespread and reported in the media, does not constitute the requisite public disclosure. Furthermore, material non-public information is not made public through selective dissemination. See the Portfolio Holdings Disclosure policy for applicable procedures and additional information. Material information disclosed only to institutional investors or to a fund analyst or a favored group of analysts generally retains its status as non-public information and must not be disclosed or otherwise misused. (Please consult with the GCO or the Compliance Department if an issuer or its agent, such as its investment banker, mistakenly discloses non-public information to investors.) Similarly, partial disclosure does not constitute public dissemination. As long as any material component of the inside information possessed by any director, officer, principal or associated person of Ameriprise Financial has yet to be publicly disclosed, the information is non-public and trades based on such information are prohibited. Information Provided in Confidence: Occasionally, one or more directors, officers, principals or associated persons of Ameriprise Financial may become temporary insiders because of a fiduciary or commercial relationship with another company. For example, personnel at Ameriprise Financial may temporarily become insiders when an external source, such as a company or officer of a company, entrusts material non-public information in connection with a commercial relationship or transaction to a director, officer, principal or associated person of Ameriprise Financial with the expectation that the information will remain confidential. 23 As an insider, we have a fiduciary obligation not to breach the trust of the party that has communicated the inside information by misusing that information. This fiduciary duty arises because we have entered or have been invited to enter into a commercial relationship with another company and have been given access to confidential information solely for the corporate purposes of such company. This obligation remains whether or not we ultimately participate in a transaction related to the information we are given. Information Disclosed in Breach of a Duty (Tipper and Tippee Liability): Directors, officers, principals or associated persons of Ameriprise Financial must be especially wary of inside information disclosed in breach of a corporate insider's fiduciary duty. Even when there is no expectation of confidentiality, you may become an insider upon receiving material non-public information in circumstances in which you know or should know that a corporate insider is disclosing information in breach of the fiduciary duty he or she owes his or her company and its shareholders. Whether the disclosure is an improper "tip" that renders the recipient a "tippee" depends on whether the corporate insider expects to benefit personally, either directly or indirectly, from the disclosure. In the context of an improper disclosure by the corporate insider, the requisite "personal benefit" is not limited to a business or future monetary gain. Rather, a prohibited personal benefit may include a reputational benefit, an expectation of a quid pro quo from the recipient or the recipient's employer, or an intention to benefit the recipient or the recipient's employer, through a gift of the inside information. You may, depending on the circumstances, also become an insider or tippee when you obtain material non-public information by happenstance, including information derived from social situations, business gatherings, overheard conversations, misplaced documents and tips from insiders or other third parties. Given the potentially severe regulatory, civil and criminal sanctions to which you, Ameriprise Financial and other Ameriprise Financial personnel could be subject, if you are a director, officer, principal or associated person uncertain as to whether the information you possess is inside information, you should immediately call the GCO or the Compliance Department rather than relying on your own interpretation of the applicable law. Pending a final determination in consultation with the GCO and/or the Compliance Department, the information should be treated as inside information that cannot otherwise be communicated or misused. C. Criminal and Civil Penalties and Regulatory Sanctions for Insider Trading Penalties for misusing inside information are severe. Depending on the circumstances and the adequacy of the relevant procedures, the individual involved, his or her supervisor, the employer's principals, officers, directors and other supervisory personnel could all face substantial regulatory, civil and criminal sanctions. For example, Ameriprise Financial personnel who either trade on inside information or become subject to tipper or tippee liability are subject to the following penalties: 1. A civil penalty of up to three times the profit gained or loss avoided; 2. A criminal fine of up to $5,000,000; and 3. A jail term of up to 20 years. Furthermore, Ameriprise Financial and its supervisory personnel, if they fail to take appropriate steps to prevent insider trading, are subject to the following penalties: 24 1. A civil penalty of up to $1,000,000 or, if greater, three times the profit gained or loss avoided as a result of the employee's violation; and 2. A criminal penalty of up to $2,500,000 for individuals and up to $25,000,000 for Ameriprise Financial. Finally, violations of insider trading laws could result in civil injunctions and a suspension or permanent bar from the securities industry. D. Company Rules Regarding Misuse of Inside Information Listed below are certain Ameriprise Financial rules prohibiting the misuse of inside information. No director, principal, officer or associated person of Ameriprise Financial may violate these rules or authorize or allow any violation of these rules. Anyone who knows or has reason to suspect that these rules have been violated must bring such actual or potential violation to the immediate attention of the Compliance Department. No director, officer, principal or associated person of Ameriprise Financial shall purchase or sell or recommend or direct the purchase or sale of a security for any client or any client's account managed by Ameriprise Financial (including accounts owned by Ameriprise Financial) or for any other person while in possession of insider information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall take advantage of inside information to purchase or sell or recommend or direct the purchase or sale of any security for his or her own account, for any account over which he or she has a direct or indirect beneficial interest (including an account held by or for any family member or family-related trust) or for any client. No director, officer, principal or associated person of Ameriprise Financial shall disclose inside information to any person, unless such disclosure is both authorized and necessary to effectively carry out the project or transaction for which Ameriprise Financial has been approached or engaged. No director, officer, principal or associated person of Ameriprise Financial shall engage in tipping or recommending, whether formally, informally, orally or in writing, the purchase or sale of any security based on inside information relevant to that security. No director, officer, principal or associated person of Ameriprise Financial shall misappropriate confidential information in connection with the purchase or sale of securities. No director, officer, principal or associated person of Ameriprise Financial shall trade for his or her personal account with the expectation that an account managed by Ameriprise Financial will soon trade in the same security (otherwise known as front-running). 25 No director, officer, principal or associated person of Ameriprise Financial shall give consideration to any inside information furnished by any broker-dealer when recommending the allocation of brokerage to any broker-dealer. However, consistent with Ameriprise Financial's efforts to secure best price and execution, Ameriprise Financial does allocate brokerage business to broker-dealers who are in a position to supplement Ameriprise Financial's research and analysis, in order to corroborate data compiled by Ameriprise Financial's staff and to consider the views and information of others in arriving at its investment decisions. Despite these considerations, it remains Ameriprise Financial's policy that brokerage not be allocated in consideration of the furnishing of inside information. No director, officer, principal or associated person of Ameriprise Financial has any obligation to investment companies or other clients advised by Ameriprise Financial to trade or recommend trading on the basis of material non-public information in their possession. Ameriprise Financial-associated persons' fiduciary responsibility to their clients does not require that they disregard the limitations imposed by the federal securities laws, particularly Rule 10b-5. (The foregoing prohibitions apply not only to securities directly affected by the inside information, but also to any other securities that may be reasonably expected to be indirectly affected by the public disclosure of such information.) In addition to the criminal, civil and regulatory penalties described above, any person who is found to have violated these rules or who is found to have violated a federal or state securities law or regulation related to the misuse of inside information will be subject to serious sanctions by Ameriprise Financial, including termination of employment. The rules outlined above are not meant to be exhaustive of the situations that could potentially give rise to insider trading liability. They are intended to provide examples of the types of situations likely to raise significant issues with respect to the misuse of inside information. Furthermore, these examples should not be taken as a confirmation that insider trading liability would necessarily arise in each situation involving the same or similar facts. Whether such liability exists can only be determined with the assistance of counsel considering all attendant circumstances. Identifying inside information: To assist you in identifying what may be inside information, you should ask the following questions routinely when you receive either confidential commercial information or information disclosed in breach of fiduciary duties: 1. Is the information material? 2. Is the information such that an investor would consider it important in making his or her investment decisions? 3. Is the information such that it would substantially affect the market price of securities if generally disclosed? 4. Is the information non-public? 5. To whom has this information been provided? For example, has the information been effectively communicated to the marketplace through disclosure by the United Press International, the Associated Press or Reuters, or published in The Wall Street Journal or other publications of general circulation? If, after considering the above questions, you believe that the information may be material and non-public, or if you have any questions as to whether its use will violate the law, you should contact the GCO or the Compliance Department using the contact information provided below. Whenever you (or any other Ameriprise Financial-associated person) receive potentially material information about 26 an issuer that you know or have reason to believe is directly or indirectly attributable to the issuer or its insiders, you must determine that the information is public before trading on the basis or while in possession of the information or before divulging the information to any person. The information may, however, be communicated, as provided in this policy, to others who are subject to the same prohibitions on trading. If you have any question at all as to whether the information is material or whether it is inside and non-public, you must resolve the question by contacting the GCO or the Compliance Department before trading. You must not discuss the information with any Ameriprise Financial-associated person other than the business unit compliance officer in the Investment Department, or appropriate contacts in the GCO or the Compliance Department. If there are any unresolved questions in your mind as to the applicability or interpretation of the foregoing standards or the propriety of any desired action, you must discuss the matter with the GCO or the Compliance Department prior to trading or recommending trading. E. Personal Securities Trading The Enforcement Act also requires Ameriprise Financial to establish monitoring and review procedures that are reasonably designed to prevent personnel from misusing inside information. See the Ameriprise Financial Investment Adviser Code of Ethics for applicable procedures and additional information. F. Implementation of this Statement of Policy The respective Senior Vice President for each business department within Ameriprise Financial, in coordination with the Chief Compliance Officer of the applicable investment adviser, is responsible for implementing this Statement of Policy with respect to each of their respective Ameriprise Financial-associated persons. Notwithstanding the foregoing, the Chief Compliance Officer remains ultimately responsible for oversight of the implementation and enforcement of this statement of policy and is available to address any questions or concerns of any director, officer, principal or associated person of Ameriprise Financial. This Statement of Policy will be distributed to all Ameriprise Financial-associated persons and will be issued and explained to all new personnel at the time of their employment with Ameriprise Financial. In addition, at least annually and at such other times as the Chief Compliance Officer of the applicable investment adviser may determine it is necessary or appropriate, representatives of the Compliance Department and/or the GCO will meet with Investment Department personnel to review this Statement of Policy. Any amendments to this policy will also be distributed to all Ameriprise Financial-associated persons. The GCO and the Compliance Department, in coordination with the Chief Compliance Officer, will review this Statement of Policy on a periodic basis and may revise it in the light of developments in the law, questions or interpretation, and practical experience with the procedures contemplated by the Statement. G. Contacts If you have questions or comments about this policy, please contact Investment Department legal counsel in the GCO, or Investment Compliance Department. 27 Forms and Completion Instructions Below are the steps for completing the Initial Personal Account and Holdings Disclosure ("Initial Certification") Form found on pages 29 and 30: 1. Write your name, Social Security number, ID number, and Routing (or Area Office if you are in the field) on the top portion of the form. 2. Check the appropriate box in Section 1. o If you check YES in Section 1, complete all requested information in Sections 2 and 3. o If you check NO in Section 1 and you do not have accounts, but you do have holdings (i.e. physical stock certificate) to report, complete Sections 2 and 3. o If you check NO in Section 1 and you have no accounts and no holdings to report, complete Section 3. o Please note: A brokerage account is an account in which securities are bought and sold (i.e. stock, bonds, futures, options, Mutual Funds etc.). This includes employer-sponsored incentive savings plans. 3. In Section 2, state the firm name, account number, and type of ownership. If securities are held outside of a brokerage account (i.e. physical stock certificate), enter "n/a" in the firm name field. o Direct: You are the owner of the account (i.e., joint, individual or IRA ownership). o Indirect: Accounts in which you have a beneficial interest (see definition below), and that are registered in another person's name. This includes members of your household (e.g., spouse, partner, minor children, etc.). o Club: You are a member of an investment club. o Advised: You have another arrangement where you give advice and also have a direct or indirect ownership. o Managed: You have no discretion over the investments in the account. 4. Sign and date the form in Section 3. 5. Return pages 29 and 30 to Personal Trade Compliance (H26/1880) within 5 business days. ADDITIONAL INFORMATION o You must complete and return this form even if you have no accounts or holdings to disclose. o Brokerage accounts: You must disclose all brokerage accounts you own or in which you have a beneficial interest. This includes Ameriprise Brokerage and accounts held with any other broker. o Mutual Funds: You must disclose all proprietary (RiverSource) and non-proprietary (non-RiverSource) Mutual Funds held direct-at-fund, including variable annuities and variable life insurance. o 401(k)s: Reporting is required for any 401(k), 403(b), or employer-sponsored incentive savings plan held by the Associated Person. For a 401(k) held by a spouse/partner (who is not also associated with Ameriprise), report all holdings excluding non-proprietary funds. o Beneficial Interest: You must disclose accounts in which you have a beneficial interest. This includes accounts held in the name of you, your spouse/partner, or any financially dependent member of your household. Additionally, beneficial interest extends to the following types of accounts if you, your spouse/partner or financially dependent member of your household: o Is a trustee or custodian for an account (e.g., for a child or parent) o Exercises discretion over an account via a power of attorney arrangement, as an executor of an estate after death, or through providing investment advice for compensation o Owns an IRA o Participates in an investment club o Has another arrangement substantially equivalent to direct or indirect ownership. NOTE: If none of the above beneficial interest situations apply and you are solely the beneficiary on an account, you do not need to disclose that account. For questions about securities that you are responsible for disclosing, see pages 14-15 of the Investment Adviser Code of Ethics. 28 Initial Personal Account and Holdings Disclosure Form Retail Access Persons - ------------------------------------------- ------------------------------------ Name: Social Security #: - ------------------------------------------- ------------------------------------ ID Number: Routing or Area Office #: - ------------------------------------------- ------------------------------------ Section 1 Do you or any members of your household have any brokerage or Mutual Fund account(s) (including Ameriprise Brokerage accounts) in which you have a direct or indirect beneficial interest, advise for others, have managed by another person(s), or participate in as a member of an investment club? [ ] YES If yes, complete Section 2 listing all accounts including Ameriprise Brokerage, Schwab or Merrill Lynch and all holdings within those accounts. Then complete Section 3. [ ] NO If you do not have accounts but you have holdings to report please fill out Sections 2 and 3. If you have no accounts and no holdings to report, please complete Section 3. Section 2 ACCOUNT/HOLDINGS DETAIL o Please complete all columns. o Initial page 30 if submitting electronically; sign page 30 if submitting a hard copy. o If submitting electronically, please send via e-mail to personal.trading@ampf.com. o If submitting a hard copy, please send to Personal Trade Compliance, H26/1880. o Please return this form to Personal Trade Compliance within 5 days.
- ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- Brokerage Firm Name or Security Description: Account Ownership Type / SSN Quantity Institution Name where Name or ticker symbol Number (D, I, C, A, M)* Shares or securities are held. If (or CUSIP) of Security NOTE: Only input the Social amount securities are not held in an Security number if different account, input N/A from your own - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- - ------------------------------- ----------------------------- --------------------- ----------------------------- --------------- * D = Direct; I = Indirect; C = Club; A = Advised; M = Managed. For Ownership Type definitions, see page 28
If more space is needed, attach the additional information on a separate page. Please sign and date any attached sheets. 29 Section 3 By signing this document, I am certifying that: o The accounts listed above are the only accounts in which I have a direct or indirect beneficial interest at this time. o I understand that failure to completely disclose all of my brokerage accounts and Mutual Fund accounts to Personal Trade Compliance may result in sanctions, which could lead to termination. o If I have one or more managed accounts, I do not have trading discretion for the accounts. o If at anytime I plan to begin trading individual securities in a brokerage account, I will inform Personal Trade Compliance prior to the first trade by sending a Lotus Note to Personal Trading. o I have made arrangements with those firms to have duplicate confirmations and statements for any brokerage activity conducted to be sent to Ameriprise Financial Inc. I have done this by informing Personal Trade Compliance in writing about the account so a letter authorizing duplicate confirmations and statements can be sent to my broker. Note: We suggest that you check in with your brokerage firm semi-annually to ensure they are continuing to send Ameriprise Financial Inc. duplicate confirmations and statements. o I understand that failure to completely disclose all of my security holdings to Personal Trade Compliance or failure to complete this form by the required due date may result in sanctions, which could include termination. o I will not participate in market timing of any Mutual Fund. o If I open any new brokerage accounts I will notify Personal Trade Compliance in writing by filling out a 407 Notification form before the first trade is conducted. o The securities listed above are the holdings I have at this time. I understand that failure to completely disclose all of my holdings to Personal Trade Compliance may result in sanctions, which could include termination. o I have read and understand the Ameriprise Financial Insider Trading Policy and Investment Adviser Code of Ethics document and will abide by them. - ----------------------------------------- ------------------ Signature Date Return to: Personal Trade Compliance-- H26/1880 30 407 Notification Form Process On the following page is the 407 Notification Form that you are required to complete for brokerage accounts in which you or an immediate family member holds a beneficial interest. (see page 7). Please be sure to: o Fill out the broker information section - with a full US Postal System mailing address o Fill out the associated person information section. Be sure to include family members' information if applicable o Please send the form to Personal Trade Compliance H26/1880 no later than 5 days after receiving this packet. The Personal Trade team will generate an authorization letter within 48 business hours of receipt of the form. The letter serves as notification to the external brokerage firm to send duplicate confirmations and statements of activity occurring in your account to our office. Reminder: Please submit this form prior to any trading If you have questions, please send a Lotus Note addressed to: Personal Trading or contact the Personal Trade Hotline at 612-671-5196. 31 407 Notification Form Date: ____________________ Brokerage Firm Name & Address: - ------------------------------------- - ------------------------------------- - ------------------------------------- - ------------------------------------- Associated Person's Information: Associated Person's Name: _______________________________ Name on Account:____________________________________ (if different than access person's name i.e. spouse, child, trustee) Account #:_________________________________ (if not established, write "NEW"): Associated Person's Social Security #:________________________ Other individuals' SSN#s:______________________________ (i.e. spouse, child, trustee if applicable): Associated Person's ID #: _________________________________ Associated Person's Field Office Routing:_____________________ (You will receive a copy of the 407 letter for your records) NOTE: In order to expedite the process, all of the above applicable lines must be completed before submitting. Send the form to Personal Trade Compliance H26/1875. 32 Investment Club Client Disclosure Form I was a member of the ____________________________ Investment Club before (club name) becoming a client of Ameriprise Financial, Inc. or its affiliates. I understand that ___________________________________ is a financial advisor with (Financial Advisor name) Ameriprise Financial Services, but is not acting in his/her capacity as a financial advisor with Ameriprise Financial Services through his/her participation in this club. I also understand Ameriprise Financial, Inc. and its affiliates do not endorse, approve, or guarantee any activity undertaken by this club. Furthermore, I understand Ameriprise Financial, Inc. and its affiliates are not responsible for this club's investment performance, investment results, and/or any other direct or indirect financial impact to me as a result of my participation in this club. - ---------------------------------------- -------------- Client signature Date - ---------------------------------------- -------------- Financial Advisor signature Date Send to Personal Trade Compliance - H26/1880. 33 EX-10 4 ex10ps.txt Exhibit 10(s) ADMINISTRATION AND SERVICES AGREEMENT THIS ADMINISTRATION AND SERVICES AGREEMENT is made as of the 1st day of October, 2005, by and between RIVERSOURCE INVESTMENTS, LLC, a Minnesota limited liability company ("RiverSource") and AMERIPRISE FINANCIAL, INC., a Delaware corporation ("Ameriprise"). WITNESSETH ---------- WHEREAS, RiverSource is an investment adviser registered under the Investment Advisers Act of 1940 and provides investment management services to a variety of accounts, as identified in Exhibit A (the "Exhibit A Accounts"); WHEREAS, RiverSource desires to delegate to Ameriprise, or retain certain of its personnel to perform as officers or employees of RiverSource, certain administrative and investment support services, in the manner and on the terms and conditions hereafter set forth; and WHEREAS, Ameriprise has staff to support such services and accepts such delegation, and desires for its employees to be retained, to perform such services on said terms and conditions; and WHEREAS, Ameriprise provides various administrative services to a variety of accounts, as identified in Exhibit B (the "Exhibit B Accounts"). WHEREAS, Ameriprise desires to delegate to RiverSource, or retain certain of its personnel to perform as officers or employees of Ameriprise, those responsibilities, in the manner and on the terms and conditions hereafter set forth; and WHEREAS, RiverSource has the staff to support such services and accepts such delegation, and desires for its employees to be retained, to perform such services on such terms and conditions; and NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, RiverSource and Ameriprise agree as follows: 1. DUTIES OF AMERIPRISE. -------------------- In relation to the Exhibit A Accounts, RiverSource hereby: (a) Delegates to Ameriprise (or any affiliate of Ameriprise that may be identified to provide such services from time to time) the investment accounting, transfer agency services and other general administration support services for the Accounts. Such delegation is pursuant to the terms of the Investment Management Agreement for each Account. The specific Accounts with respect to which this Section 1(a) applies shall be identified on Exhibit A. (b) Retains certain Ameriprise personnel to support certain asset liability management functions for the Accounts as officers or employees of RiverSource. The specific Accounts with respect to which this Section 1(b) applies shall be identified on Exhibit A. (c) Retains Ameriprise as paying agent to facilitate the payment of investment management fees to sub-advisors retained to provide services under certain Investment Management Agreements. The specific Accounts with respect to which this Section 1(c) applies shall be identified on Exhibit A. (d) Agrees to deliver to Ameriprise on a timely basis such information as may be necessary or appropriate for Ameriprise's performance of its duties and responsibilities under this Agreement, and Ameriprise shall be entitled to rely on the accuracy and completeness of such information in performing its duties under this Agreement. 2. DUTIES OF RIVERSOURCE. --------------------- In relation to the Exhibit B Accounts, Ameriprise hereby: (a) Delegates to RiverSource the proxy voting administration and other general administrative support services for the Accounts. Such delegation is pursuant to the terms of the Administrative Services Agreement for each Account. The specific Accounts with respect to which this Section 2(a) applies shall be identified on Exhibit B. (b) Retains certain RiverSource personnel to support certain real estate administration and servicing functions for the Accounts as officers or employees of Ameriprise. The specific Accounts with respect to which this Section 2(b) applies shall be identified on Exhibit B. (c) Agrees to deliver to RiverSource on a timely basis such information as may be necessary or appropriate for RiverSource's performance of it's duties and responsibilities under this Agreement, and RiverSource shall be entitled to rely on the accuracy and completeness of such information in performing its duties under this Agreement. 3. DUTIES OF AMERIPRISE AND RIVERSOURCE WITH RESPECT TO GENERAL STAFF ------------------------------------------------------------------ FUNCTIONS. --------- (a) Ameriprise agrees to provide such personnel as the parties shall agree from time to time to support certain general staff functions of RiverSource as officers or employees of RiverSource. 2 (b) RiverSource agrees to provide such personnel as the parties shall agree from time to time to support certain general staff functions of Ameriprise as officers or employees of Ameriprise. 4. COMPENSATION. ------------ RiverSource and Ameriprise each agree to pay the other for the services under this Agreement a fee for each calendar month of each year in accordance with Exhibit C, which is annexed to and made a part of this Agreement. Within 30 days of the end of each calendar month, each party shall be notified of and paid the amount estimated to be owed for services and the use of facilities pursuant to this Agreement for that calendar month. Such notification shall take place via an electronic allocation process involving both parities or in some other form. 5. LIMITATION OF LIABILITY. ----------------------- In furnishing RiverSource with services as provided herein, Ameriprise (including any officer, director or agent) shall exercise its best judgment and shall not be held liable to RiverSource, its creditors or the holders of its securities or deposits for errors of judgment or for any loss except a loss resulting from the willful misfeasance, bad faith or negligence in the performance of its duties, or reckless disregard of its obligations and duties under the terms of this Agreement. It is further understood and agreed that Ameriprise may rely upon information furnished to it by RiverSource that it reasonably believes to be accurate and reliable. In furnishing Ameriprise with services as provided herein, RiverSource (including any officer, director or agent) shall exercise its best judgment and shall not be held liable to Ameriprise, its creditors or the holders of its securities or deposits for errors of judgment or for any loss except a loss resulting from the willful misfeasance, bad faith or negligence in the performance of its duties, or reckless disregard of its obligations and duties under the terms of this Agreement. It is further understood and agreed that RiverSource may rely upon information furnished to it by Ameriprise that it reasonably believes to be accurate and reliable. 6. CONFIDENTIALITY. --------------- All information and advice furnished by either party under this Agreement shall be confidential and shall not be disclosed to third parties, except as required by law. All information furnished by either party under this Agreement shall be confidential and shall not be disclosed to any unaffiliated third party, except as permitted or required by law, where it is necessary to effect transactions or provide other services to a party, or where a party requests or authorizes the other party to do so. The obligations under this Section 6 shall not apply to confidential information to the extent such information (i) is or becomes published or otherwise generally available to the public through no wrongful act of the information recipient, (ii) is information which the information recipient can show was properly in its possession prior to receipt from the information owner, (iii) is or becomes available to the information recipient from a source other than the information owner having no obligation of nondisclosure with respect thereto, (iv) is information which the information recipient can show was independently developed by the information recipient, (v) is required by law to be 3 disclosed, provided, however, that the information recipient shall make reasonable efforts to have confidential treatment accorded to the confidential information and, to the extent permitted by law, shall make reasonable efforts to notify the information owner as appropriate prior to disclosure thereof, or (vi) is requested by any regulator, including any self-regulatory organization of which the information recipient is a member, to be disclosed, provided, however, that the information recipient will take reasonable steps to notify the regulator of the confidential nature of the confidential information. Notwithstanding anything in this Section 6 to the contrary, Ameriprise may share Confidential Information with its affiliates in accordance with its privacy policies in effect from time to time. 7. ACTIVITIES OF AMERIPRISE AND RIVERSOURCE. ---------------------------------------- The services of Ameriprise under this Agreement are not deemed exclusive, and Ameriprise and any person controlled by or under common control with Ameriprise shall be free to render similar services to others. The services of RiverSource under this Agreement are not deemed exclusive, and RiverSource and any person controlled by or under common control with RiverSource shall be free to render similar services to others. 8. DURATION AND TERMINATION OF THIS AGREEMENT. ------------------------------------------- This Agreement shall become effective as of the date first above written and shall remain in force for an unlimited duration unless and until terminated by either party as hereinafter provided. This Agreement may be terminated by either RiverSource or Ameriprise at any given time by giving the other party at least 60 days' previous written notice of such intention to terminate. 9. AMENDMENTS OF THIS AGREEMENT. ---------------------------- This Agreement may be amended by the parties hereto only if such amendment is set forth in a written instrument executed by each of the parties hereto. 10. GOVERNING LAW. ------------- The provisions of this Agreement shall be construed and interpreted in accordance with the internal laws of the State of Minnesota as at the time in effect. 11. ENTIRE AGREEMENT. ---------------- This Agreement represents the entire agreement as to its subject matter between the parties and supercedes any prior agreement whether written or oral. Nothing herein shall prevent any affiliate that has been appointed by Ameriprise and/or RiverSource to provide services under this Agreement from entering into and/or retaining a separate agreement with Ameriprise and/or RiverSource where necessary to meet any requirements associated with inter-company arrangements. 12. COUNTERPARTS. ------------ This Agreement may be executed by the parties hereto in counterparts and if executed in more than one counterpart, the separate instruments shall constitute one agreement. 13. NOTICES. ------- Any notice under this Agreement shall be given in writing, addressed, and delivered, or mailed postpaid, to the party to this Agreement entitled to receive such, at such party's principal place of business as set out here: 4 RIVERSOURCE: RiverSource Investments, LLC 807 Ameriprise Financial Center Minneapolis, Minnesota 55474 Attn: Brian McGrane With a copy to: Ameriprise Financial, Inc. 50605 Ameriprise Financial Center Minneapolis, Minnesota 55474 Attn: Chief Legal Officer, RiverSource Investments, LLC AMERIPRISE: Ameriprise Financial, Inc. 802 Ameriprise Financial Center Minneapolis, MN 55474 Attn: Dave K. Stewart with a copy to Chief Counsel, Asset Management or to such other address as either party may designate in writing mailed to the other. 14. ARBITRATION. ----------- (a) EACH PARTY UNDERSTANDS AND AGREES THAT: (i) ARBITRATION IS FINAL AND BINDING ON THE PARTIES; (ii) THE PARTIES WAIVE THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL; (iii) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN, AND DIFFERENT FROM, COURT PROCEEDINGS; (iv) THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED; AND (v) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY. 5 (b) ANY CONTROVERSY ARISING OUT OF, OR RELATING TO THIS AGREEMENT OR THE BREACH THEREOF, SHALL BE SETTLED BY ARBITRATION AND CONDUCTED PURSUANT TO THE FEDERAL ARBITRATION ACT BEFORE THE AMERICAN ARBITRATION ASSOCIATION OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS INC., THE CHICAGO STOCK EXCHANGE INC., THE NEW YORK STOCK EXCHANGE, THE AMERICAN STOCK EXCHANGE TO THE EXTENT EITHER PARTY MAY BE A MEMBER OF SUCH EXCHANGE, THE MUNICIPAL SECURITIES RULEMAKING BOARD OR THE INDEPENDENT NON-INDUSTRY ARBITRATION FORUM AS EITHER MAY ELECT. JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATORS MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. (c) NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (i) THE CLASS CERTIFICATION IS DENIED; (ii) THE CLASS IS DECERTIFIED; OR (iii) THE COMPANY IS EXCLUDED FROM THE CLASS BY THE COURT. (d) SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN. 15. MISCELLANEOUS. ------------- (a) Severability. If any term of this Agreement is found to be invalid or unenforceable, all other provisions will remain in force. The failure of either party to insist on strict compliance with this Agreement is not considered a waiver of such party's rights under this Agreement. (b) Headings. All section and paragraph headings are for convenience of reference only and do not form part of this Agreement. (c) Force Majeure. No party to this Agreement will be responsible for nonperformance resulting from acts beyond the reasonable control of such party, provided that such party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch as soon as such causes are removed. 6 THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE IN SECTION 14. In witness whereof, the parties hereto have executed the foregoing Agreement effective as of the day and year first above written. AMERIPRISE FINANCIAL, INC. RIVERSOURCE INVESTMENTS, LLC By: /s/ James M. Cracchiolo By: --------------------------------- ---------------------------------- Print name: James M. Cracchiolo Print name: William F. "Ted" Truscott Print title: President, Chairman of Print title: President, Chairman the Board and CEO of the Board and CIO Date: October 31, 2005 Date: October 31, 2005 7 THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE IN SECTION 14. In witness whereof, the parties hereto have executed the foregoing Agreement effective as of the day and year first above written. AMERIPRISE FINANCIAL, INC. RIVERSOURCE INVESTMENTS, LLC By: By: /s/ William F. Truscott --------------------------------- ---------------------------------- Print name: James M. Cracchiolo Print name: William F. "Ted" Truscott Print title: President, Chairman of Print title: President, Chairman the Board and CEO of the Board and CIO Date: October 31, 2005 Date: October 31, 2005 8 EXHIBIT A DUTIES OF AMERIPRISE FINANCIAL, INC. ------------------------------------ - ------------------------------------------------------------------------------- DUTIES OF ACCOUNT NAME AMERIPRISE - ------------------------------------------------------------------------------- Investment Accounting American Express International Deposit Company American Express Bank International and American Express Bank Ltd. American Express Travel Related Services Company, Inc. Ameriprise Certificate Company - ------------------------------------------------------------------------------- General Administrative Ameriprise Certificate Company Support - ------------------------------------------------------------------------------- Share AMP Personnel to American Express International Deposit Company Support RiverSource Investments' Asset Ameriprise Certificate Company Liability Management Function Ameriprise Financial, Inc. (Corporate Accounts of certain subsidiaries) IDS Life Insurance Company American Partners Life Insurance Company American Enterprise Life Insurance Company IDS Life Insurance Company of New York American Centurion Life Assurance Company IDS Property Casualty Insurance Company - ------------------------------------------------------------------------------- Paying Agent to RiverSource Retail Funds Facilitate Payment of Sub-Advisors RiverSource VP Funds - ------------------------------------------------------------------------------- Dated: As of October 1, 2005 9 EXHIBIT B DUTIES OF RIVERSOURCE INVESTMENTS, LLC -------------------------------------- - ------------------------------------------------------------------------------- DUTIES OF ACCOUNT NAME RIVERSOURCE - ------------------------------------------------------------------------------- Proxy Voting RiverSource Retail Funds Administration and General Administrative RiverSource VP Funds Support - ------------------------------------------------------------------------------- Share RiverSource Ameriprise Certificate Company Personnel to Support Ameriprise Financial's IDS Life Insurance Company Real Estate Administration and American Partners Life Insurance Company Servicing Function American Enterprise Life Insurance Company IDS Life Insurance Company of New York American Centurion Life Assurance Company - ------------------------------------------------------------------------------- Dated: As of October 1, 2005 10 EXHIBIT C COMPENSATION TO AMERIPRISE AND RIVERSOURCE ------------------------------------------ The fee that shall be paid to Ameriprise and RiverSource under the Agreement for each calendar month of each year shall be equal to each of their respective allocated costs in providing the services set forth in the Agreement. Dated: As of October 1, 2005 11 EX-10 5 ex10pt.txt Exhibit 10(t) AMENDMENT TO MARKETING AGREEMENT The purpose of this document is to amend the Marketing Agreement dated October 10, 1991 between IDS Certificate Company (now known as Ameriprise Certificate Company ("ACC")) and American Express Bank Ltd. ("AEB"), as subsequently amended (the "Marketing Agreement"). Unless specifically stated to the contrary, the terms of this Amendment are retroactive to the initial effective date of the Marketing Agreement on October 10, 1991, as they clarify the respective responsibilities and obligations the Parties (i.e., ACC and AEB) have undertaken since that date. Terms used in this Amendment have the same meaning as they do in the Marketing Agreement. 1. Effective October 1, 2005, Ameriprise Certificate Company will replace IDS Certificate Company in the text of the Marketing Agreement in recognition of the current name of such organization. 2. Section I of the Marketing Agreement is amended to add subsection 4.1, which states as follows: (4.1) Effective October 1, 2005, AEB will no longer market or offer Products, and ACC will no longer accept new applications for Products. However, the terms of this Agreement will continue to be in effect with respect to Products marketed and offered prior to that date. 3. Sections I(3), I(6), I(8), IV(6), V(2), and other applicable Sections of the Marketing Agreement are read together to provide that ACC has and will continue to ensure that the registration of products on the official transfer agent records of ACC accurately reflects the instructions for such registrations that have been provided by AEB. In this regard, AEB has been and continues to be responsible for ensuring that such instructions are accurate, complete and lawful. The Indemnification provisions of Section V of the Marketing Agreement are applicable to the Parties' respective obligations in this regard. 4. Section I(7) of the Marketing Agreement is amended to add the following provisions to the end of the Section: Effective January 1, 2005, with respect to AEB's obligations to: i) obtain and maintain current Forms W-8BEN (or any other form required by U.S. Treasury Department regulations) for all clients in compliance with applicable laws and regulations; and ii) deliver Forms 1042-S to clients, AEB will act as the "withholding agent," as defined in U.S. Treasury Regulation 1.1441-7(a), with all attendant responsibilities and obligations. AEB will indemnify ACC in accordance with Section V of the Marketing Agreement for any claim brought in accordance with such Section V arising from the failure of AEB to perform its obligations hereunder. ACC will provide such information to AEB as is necessary for AEB to act as the withholding agent and comply with applicable laws and regulations. AEB's United Kingdom branch will provide ACC with a Form W-8IMY certifying it is a qualified intermediary that has assumed primary responsibility for US tax withholding and reporting. ACC shall provide to such branch Forms 1042S with withholding rate pool reporting rather than Forms 1042S for each client. 5. Section V of the Marketing Agreement is amended to add subsection V(4) which states as follows: (4) The Parties to this Agreement are solely responsible for any failure to satisfy their obligations under this Agreement. Such responsibility includes any regulatory penalty or fine and/or any liability arising from a civil or criminal action, or settlement thereof, including but not limited to compensation or remediation to clients, arising from any such failure to satisfy such obligations. The Parties' indemnification obligations and right to receive indemnification will survive the termination of the Agreement for the time period relating to all applicable statutes of limitation, unless subsequently agreed to in writing by the Parties. 6. Section VI(5) of the Marketing Agreement is amended as follows: Any notice, under this Agreement shall be given in writing, by electronic mail or addressed and delivered or mailed postpaid to the Party to this Agreement entitled to receive the same, i. If to Company, Paula R. Meyer, 596 Ameriprise Financial Center, Minneapolis, MN 55474, paula.r.meyer@ampf.com; and ii. If to AEB, Mary Ann Fitzgibbon, 200 Vesey Street, New York, NY 10285, maryann.f.fitzgibbon@aexp.com. 7. Section VIII titled "ARBITRATION" is added to the Marketing Agreement to read as follows: (2) The Parties also understand and agree that if they are unable to resolve any issue under the Agreement or this Letter, such dispute will be resolved through arbitration within the following parameters: a. Arbitration is final and binding on the Parties; i. The Parties reserve the right to seek injunctive relief in a court of competent jurisdiction, but waive any other right to seek remedies in court, including the right to jury trial; 2 ii. Pre-arbitration discovery is generally more limited than, and different from, court proceedings; iii. The arbitrators' award is not required to include factual findings or legal reasoning, and any Party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited; and iv. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. (3) Any controversy arising out of, or relating to Products distributed under the Marketing Agreement shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act before the American Arbitration Association or the independent non-industry arbitration forum as the Parties may agree. If the Parties cannot agree on the Forum, the American Arbitration Association shall be selected. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. (4) Forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement. 8. Schedule A of the Marketing Agreement is amended as follows: a. Effective October 1, 2005, the compensation rates provided in Sections 2(a),(b),(c) and (d) of both Schedule A and Schedule B will be .35% per annum, .50% per annum, .65% per annum and 1.1% per annum, respectively. b. Effective January 1, 2006, the compensation rates provided in Sections 2(a),(b),(c) and (d) of both Schedule A and Schedule B will be .30% per annum, .45% per annum, .60% per annum and 1.05% per annum, respectively. 9. Schedule B of the Marketing Agreement is eliminated. 10. Section IX titled "CONFIDENTIALITY/DATA SECURITY" is added to the Marketing Agreement to read as follows: As used herein, Confidential Information, includes but is not limited to all proprietary information of AEB and its customers including without limitation, the accounts, account numbers, names, addresses, social security numbers or other personal identifier of such customers and any information derived therefrom. a. ACC agrees not to use or disclose Confidential Information for any purpose other than to carry out the purpose for which the Confidential Information was provided to it; and agrees to cause all of its employees, agents, representatives, or any other party to whom ACC may provide access to or disclose Confidential Information to limit the use and disclosure of Confidential Information to that purpose. 3 b. ACC agrees to implement appropriate measures designed to ensure the security and confidentiality of Confidential Information; to protect such information against any anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to, or use of, Confidential Information that could result in substantial harm or inconvenience to any customer of AEB; c. ACC further agrees to cause its agents, representatives, subcontractors, or any other party to whom it may provide access to or disclose Confidential Information to implement appropriate measures designed to meet the objectives set forth in this Amendment. d. ACC agrees to provide AEB with copies of audits and test result information sufficient to assure AEB that ACC has implemented information security measures consistent with this Amendment. e. ACC agrees not to, directly or indirectly, contact, solicit, encourage, entice away any client of AEB whose name and personal information was made known to ACC as a result of AEB's activities under the Marketing Agreement. The obligations hereunder shall not apply to Confidential Information to the extent such information (i) is or becomes published or otherwise generally available to the public through no wrongful act of ACC, (ii) is information which ACC can show was properly in its possession prior to receipt from AEB, (iii) is or becomes available to ACC from a source other than AEB having no obligation of nondisclosure with respect thereto, (iv) is information which ACC can show was independently developed by ACC, (v) is required by law to be disclosed, provided, however, that ACC shall make reasonable efforts to have confidential treatment accorded to the Confidential Information and, to the extent permitted by law, shall make reasonable efforts to notify AEB as appropriate prior to disclosure thereof, or (vi) is requested by any regulator, including any self-regulatory organization of which ACC is a member, to be disclosed, provided, however, that ACC will take reasonable steps to notify the regulator of the confidential nature of the Confidential Information. 11. Section X entitled "Non-Solicitation/Right of First Refusal" is added to the Marketing Agreement to read as follows: If during the three-year period beginning October 1, 2005, ACC proposes to enter into an arrangement with a financial institution (other than AEB) to distribute certificates to clients who are non-U.S. Persons, ACC shall deliver to AEB a written notice ("Offer Notice") detailing the terms and conditions of such arrangement and including the name of the institution arrangement. The parties shall have (60) days from the receipt of the Offer Notice (the "Notice Period") to negotiate in good faith and enter into a written agreement that incorporates no less than the terms and conditions detailed in the Offer Notice. If after the expiration of such sixty (60) day period AEB has failed to enter into an agreement with ACC or to agree with ACC to extend the 60 day period, then ACC shall be free to enter into an arrangement with such other financial institution. 4 The effective date of this Amendment is October 1, 2005 and the Amendment may be executed in counterparts. AMERIPRISE CERTIFICATE COMPANY By: /s/ Paula R. Meyer ----------------------------- Its: President ----------------------------- Date: 10/1/05 ---------------------------- AMERICAN EXPRESS BANK LTD. By: ----------------------------- Its: ----------------------------- Date: ---------------------------- 5 The effective date of this Amendment is October 1, 2005 and the Amendment may be executed in counterparts. AMERIPRISE CERTIFICATE COMPANY By: ----------------------------- Its: ----------------------------- Date: ---------------------------- AMERICAN EXPRESS BANK LTD. By: /s/ ----------------------------- Its: Vice Chairman ----------------------------- Date: 9/30/05 ---------------------------- 6 EX-10 6 ex10pu.txt Exhibit 10(u) FIFTH AMENDMENT TO SELLING AGENT AGREEMENT The purpose of this document is to amend the Selling Agent Agreement dated June 1, 1990 between IDS Financial Services Inc. (the "Company" and now known as Ameriprise Financial Services, Inc. ("AFSI")) and American Express Bank International ("AEBI"), as subsequently amended (the "Selling Agent Agreement"). Unless specifically stated to the contrary, the terms of this Amendment are retroactive to the initial effective date of the Selling Agent Agreement on June 1, 1990, as they clarify the respective responsibilities and obligations the Parties (i.e., AFSI and AEBI) and IDS Certificate Company (the "Issuer" and now known as Ameriprise Certificate Company) have undertaken since that date. Terms used in this Amendment have the same meaning as they do in the Selling Agent Agreement. 1. Effective October 1, 2005, Ameriprise Certificate Company will replace IDS Certificate Company in the text of the Selling Agent Agreement in recognition of the current name of such organization. 2. Section I of the Selling Agent Agreement is amended to add subsection 4.1, which states as follows: (4.1) Effective October 1, 2005, AEBI will no longer market or offer Certificates, and the Issuer and the Company will no longer accept new applications for Certificates from AEBI. However, the terms of this Agreement will continue to be in effect with respect to Certificates marketed and offered prior to that date. 3. Sections I(3), I(6), I(8), IV(6), V(2), and other applicable Sections of the Selling Agent Agreement are read together to provide that the Company and the Issuer have and will continue to ensure that the registration of products on the official transfer agent records of the Issuer accurately reflects the instructions for such registrations that have been provided by AEBI. In this regard, AEBI has been and continues to be responsible for ensuring that such instructions are accurate, complete and lawful. The Indemnification provisions of Section V of the Selling Agent Agreement are applicable to the Parties' respective obligations in this regard. 4. Section I(7) of the Selling Agent Agreement is amended to add the following provisions to the end of the Section: Effective January 1, 2005, with respect to AEBI's obligations to: i) obtain and maintain current Forms W-8BEN (or any other form required by U.S. Treasury Department regulations) for all clients in compliance with applicable laws and regulations; and ii) deliver Forms 1042-S to clients, AEBI will act as the "withholding agent," as defined in U.S. Treasury Regulation 1.1441-7(a), with all attendant responsibilities and obligations. AEBI will indemnify the Company and the Issuer in accordance with Section V of the Selling Agent Agreement for any claim brought in accordance with such Section V arising from the failure of AEB to perform its obligations hereunder. The Company will, and the Company will cause the Issuer to, provide such information to AEBI as necessary for AEBI to act as withholding agent and comply with applicable laws and regulations. 5. Section V of the Selling Agent Agreement is amended to add subsection V(4) which states as follows: (4) The Parties to this Agreement are solely responsible for any failure to satisfy their obligations under this Agreement. Such responsibility includes any regulatory penalty or fine and/or any liability arising from a civil or criminal action, or settlement thereof, including but not limited to compensation or remediation to clients, arising from any such failure to satisfy such obligations. The Parties' indemnification obligations and right to receive indemnification will survive the termination of the Agreement for the time period relating to all applicable statutes of limitation, unless subsequently agreed to in writing by the Parties. 6. Section VI(5) of the Selling Agent Agreement is amended as follows: Any notice, under this Agreement shall be given in writing, by electronic mail or addressed and delivered or mailed postpaid to the Party to this Agreement entitled to receive the same, i. If to Company, Paula R. Meyer, 596 Ameriprise Financial Center, Minneapolis, MN 55474, paula.r.meyer@ampf.com; and ii. If to AEBI, Mary Ann Fitzgibbon, 200 Vesey Street, New York, NY 10285, maryann.f.fitzgibbon@aexp.com. 7. Section VIII titled "ARBITRATION" is added to the Selling Agent Agreement to read as follows: (1) The Parties also understand and agree that if they are unable to resolve any issue under the Selling Agent Agreement or this Amendment, such dispute will be resolved through arbitration within the following parameters: a. Arbitration is final and binding on the Parties; i. The Parties reserve the right to seek injunctive relief in a court of competent jurisdiction, but waive any other right to seek remedies in court, including the right to jury trial; 2 ii. Pre-arbitration discovery is generally more limited than, and different from, court proceedings; iii. The arbitrators' award is not required to include factual findings or legal reasoning, and any Party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited; and iv. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. (2) Any controversy arising out of, or relating to Products distributed under the Selling Agent Agreement or this Amendment shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act before the American Arbitration Association or the independent non-industry arbitration forum as the Parties may agree. If the Parties cannot agree on the Forum, the American Arbitration Association shall be selected. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. (3) Forbearance to enforce this agreement to arbitrate shall not constitute a waiver of any rights under the Selling Agent Agreement or this Amendment. 8. Schedule A of the Selling Agent Agreement, which sets out the compensation rates for Investors Certificates, is amended as follows: A. Effective October 1, 2005, Section 2(i) of Schedule A is amended to read: (i) For the period October 1, 2005 through December 31, 2005, for Certificates sold on or after June 1, 1990: a. For Certificates sold in an amount equal to $1 million or more, a fee equal to .35% per annum of the amount outstanding for each Certificate; b. For Certificates sold in an amount from $500,000 to $999,999, a fee equal to .50% per annum of the amount outstanding for each Certificate; c. For Certificates sold in an amount from $250,000 to $499,999, a fee equal to .65% per annum of the amount outstanding for each Certificate; d. For Certificates sold in an amount from $100,000 to $249,000, a fee equal to 1.1% per annum of the amount outstanding for each Certificate; and e. For Investors Select certificates, a fee equal to .25% per annum of the amount outstanding. B. Effective January 1, 2006, Section 2(i) of Schedule A is amended to read: (i) Effective January 1, 2006, for Certificates sold on or after June 1, 1990: 3 a. For Certificates sold in an amount equal to $1 million or more, a fee equal to .30% per annum of the amount outstanding for each Certificate; b. For Certificates sold in an amount from $500,000 to $999,999, a fee equal to .45% per annum of the amount outstanding for each Certificate; c. For Certificates sold in an amount from $250,000 to $499,999, a fee equal to .60% per annum of the amount outstanding for each Certificate; d. For Certificates sold in an amount from $100,000 to $249,000, a fee equal to 1.05% per annum of the amount outstanding for each Certificate; and e. For Investors Select Certificates, a fee equal to .25% per annum of the amount outstanding. 9. Schedule B of the Selling Agent Agreement, which sets out the compensation rates for Stock Market Certificates ("Market Certificates"), remains in effect, with fees of 1.00% per term of the principal amount of each Market Certificate. 10. Section IX titled "CONFIDENTIALITY/DATA SECURITY" is added to the Selling Agent Agreement to read as follows: As used herein, Confidential Information, includes but is not limited to all proprietary information of AEBI and its customers including without limitation, the accounts, account numbers, names, addresses, social security numbers or other personal identifier of such customers and any information derived therefrom. a. AFSI agrees not to use or disclose Confidential Information for any purpose other than to carry out the purpose for which the Confidential Information was provided to it; and agrees to cause all of its employees, agents, representatives, or any other party to whom AFSI may provide access to or disclose Confidential Information to limit the use and disclosure of Confidential Information to that purpose. b. AFSI agrees to implement appropriate measures designed to ensure the security and confidentiality of Confidential Information; to protect such information against any anticipated threats or hazards to the security or integrity of such information; and to protect against unauthorized access to, or use of, Confidential Information that could result in substantial harm or inconvenience to any customer of AEBI; c. AFSI further agrees to cause its agents, representatives, subcontractors, or any other party to whom it may provide access to or disclose Confidential Information to implement appropriate measures designed to meet the objectives set forth in this Amendment. 4 d. AFSI agrees to provide AEBI with copies of audits and test result information sufficient to assure AEBI that AFSI has implemented information security measures consistent with this Amendment. e. AFSI agrees not to, directly or indirectly, contact, solicit, encourage, entice away any client of AEBI whose name and personal information was made known to AFSI as a result of AEBI's activities under the Selling Agent Agreement. The obligations hereunder shall not apply to Confidential Information to the extent such information (i) is or becomes published or otherwise generally available to the public through no wrongful act of AFSI, (ii) is information which AFSI can show was properly in its possession prior to receipt from AEBI, (iii) is or becomes available to AFSI from a source other than AEBI having no obligation of nondisclosure with respect thereto, (iv) is information which AFSI can show was independently developed by AFSI, (v) is required by law to be disclosed, provided, however, that AFSI shall make reasonable efforts to have confidential treatment accorded to the Confidential Information and, to the extent permitted by law, shall make reasonable efforts to notify AEBI as appropriate prior to disclosure thereof, or (vi) is requested by any regulator, including any self-regulatory organization of which AFSI is a member, to be disclosed, provided, however, that AFSI will take reasonable steps to notify the regulator of the confidential nature of the Confidential Information. 11. Section X entitled "Non-Solicitation/Right of First Refusal" is added to the Selling Agent Agreement to read as follows: If during the three-year period beginning October 1, 2005, AFSI proposes to enter into an arrangement with a financial institution (other than AEBI) to distribute certificates to clients who are non-U.S. Persons, AFSI shall deliver to AEBI a written notice ("Offer Notice") detailing the terms and conditions of such arrangement and including the name of the institution arrangement. The parties shall have (60) days from the receipt of the Offer Notice (the "Notice Period") to negotiate in good faith and enter into a written agreement that incorporates no less than the terms and conditions detailed in the Offer Notice. If after the expiration of such sixty (60) day period AEBI has failed to enter into an agreement with AFSI or to agree with AFSI to extend the 60 day period, then AFSI shall be free to enter into an arrangement with such other financial institution. 5 The effective date of this Amendment is October 1, 2005 and the Amendment may be executed in counterparts. AMERIPRISE FINANCIAL SERVICES, INC. By: /s/ Paula R. Meyer ----------------------------- Its: President ----------------------------- Date: 10/1/05 ---------------------------- AMERICAN EXPRESS BANK INTERNATIONAL. By: ----------------------------- Its: ----------------------------- Date: ---------------------------- 6 The effective date of this Amendment is October 1, 2005 and the Amendment may be executed in counterparts. AMERIPRISE FINANCIAL SERVICES, INC. By: ----------------------------- Its: ----------------------------- Date: ---------------------------- AMERICAN EXPRESS BANK INTERNATIONAL. By: /s/ ----------------------------- Its: Senior Director and Chief Administrative Officer ----------------------------- Date: 9/30/05 ---------------------------- 7 EX-24 7 ex24pa.txt Exhibit 24(a) AMERIPRISE CERTIFICATE COMPANY POWER OF ATTORNEY City of Minneapolis State of Minnesota Each of the undersigned as a director of Ameriprise Certificate Company, a face-amount certificate company registered under the Investment Company Act of 1940, hereby constitutes and appoints Paula R. Meyer, Brian J. McGrane, David K. Stewart, Scott R. Plummer and Christopher O. Petersen or any one of them, as his or her attorney-in-fact and agent, to sign for him or her in his or her name, place and stead any and all registration statements and amendments thereto (with all exhibits and other documents required or desirable in connection therewith) that may be prepared from time to time in connection with said Company's existing or future face-amount certificate products - whether pursuant to the requirements of the Securities Act of 1933, the Investment Company Act of 1940 or otherwise - and periodic reports on Form 10-K, Form 10-Q and Form 8-K required pursuant to provisions of the Securities Exchange Act of 1934, and any necessary or appropriate filings with states or other jurisdictions, and grants to any or all of them the full power and authority to do and perform each and every act required or necessary or appropriate in connection with such signatures or filings. Signed on this 9th day of February, 2006 --- /s/ Rodney P. Burwell - ------------------------------------- Rodney P. Burwell /s/ Jean B. Keffeler - ------------------------------------- Jean B. Keffeler /s/ Thomas R. McBurney - ------------------------------------- Thomas R. McBurney /s/ Karen M. Bohn - ------------------------------------- Karen M. Bohn EX-24 8 ex24pb.txt Exhibit 24(b) AMERIPRISE CERTIFICATE COMPANY POWER OF ATTORNEY City of Minneapolis State of Minnesota The undersigned as a director and officer of Ameriprise Certificate Company, a face-amount certificate company registered under the Investment Company Act of 1940, hereby constitutes and appoints Brian J. McGrane, David K. Stewart, Scott R. Plummer, and Christopher O. Petersen or any one of them, as her attorney-in-fact and agent, to sign for her in her name, place and stead any and all registration statements and amendments thereto (with all exhibits and other documents required or desirable in connection therewith) that may be prepared from time to time in connection with said Company's existing or future face-amount certificate products - whether pursuant to the requirements of the Securities Act of 1933, the Investment Company Act of 1940 or otherwise - and periodic reports on Form 10-K, Form 10-Q and Form 8-K required pursuant to provisions of the Securities Exchange Act of 1934, and any necessary or appropriate filings with states or other jurisdictions, and grants to any or all of them the full power and authority to do and perform each and every act required or necessary or appropriate in connection with such signatures or filings. Signed on this 9th day of February, 2006 --- /s/ Paula R. Meyer - ----------------------------- Paula R. Meyer EX-24 9 ex24pc.txt Exhibit 24(c) AMERIPRISE CERTIFICATE COMPANY POWER OF ATTORNEY City of Minneapolis State of Minnesota Each of the undersigned as an officer of Ameriprise Certificate Company, a face-amount certificate company registered under the Investment Company Act of 1940, hereby constitutes and appoints Paula R. Meyer, Scott R. Plummer, and Christopher O. Petersen or any one of them, as his attorney-in-fact and agent, to sign for him in his name, place and stead any and all registration statements and amendments thereto (with all exhibits and other documents required or desirable in connection therewith) that may be prepared from time to time in connection with said Company's existing or future face-amount certificate products, and periodic reports on Form 10-K, Form 10-Q and Form 8-K required pursuant to provisions of the Securities Exchange Act of 1934, and any necessary or appropriate states or other jurisdictions, and grants to any or all of them the full power and authority to do and perform each and every act required or necessary or appropriate in connection with such signatures or filings. Signed on this 9th day of February, 2006 --- /s/ Brian J. McGrane - ---------------------------- Brian J. McGrane /s/ David K. Stewart - ---------------------------- David K. Stewart EX-31 10 ex31p1.txt EXHIBIT 31.1 CERTIFICATION ------------- I, Paula R. Meyer, certify that: 1. I have reviewed this annual report on Form 10-K of Ameriprise Certificate Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: March 10, 2006 /s/ Paula R. Meyer ----------------------- Paula R. Meyer Chief Executive Officer EX-31 11 ex31p2.txt EXHIBIT 31.2 CERTIFICATION ------------- I, Brian J. McGrane, certify that: 1. I have reviewed this annual report on Form 10-K of Ameriprise Certificate Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: March 10, 2006 /s/ Brian J. McGrane ----------------------- Brian J. McGrane Chief Financial Officer EX-32 12 ex32p1.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of Ameriprise Certificate Company (the "Company") for the fiscal year ended December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Paula R. Meyer, as Chief Executive Officer of the Company and Brian J. McGrane, as Principal and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Paula R. Meyer - ------------------------------ Name: Paula R. Meyer Title: Chief Executive Officer Date: March 10, 2006 /s/ Brian J. McGrane - ------------------------------ Name: Brian J. McGrane Title: Chief Financial Officer Date: March 10, 2006 The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002, and is not being "filed" as part of the Form 10-K or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.1 is expressly and specifically incorporated by reference in any such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----