Good afternoon ladies and gentlemen, and welcome to the Fourth Quarter 2007 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Ms. Laura Gagnon, Vice President of Investor Relations. Ms Gagnon, you may begin.

Thank you. Welcome to the Ameriprise Financial Fourth Quarter Earnings Call. With me on the call today are Jim Cracchiolo, Chairman CEO; and Walter Berman, Chief Financial Officer. After their remarks, we would be happy to take your question. During the call, you will hear references to various non-GAAP financial measures like adjusted earnings, which we believe provide insight into the underlying performance of the company's operations. Reconciliations of non-GAAP numbers to the respective GAAP numbers can be found in today's material available on our website. Some of the statement that we make on this call maybe forward-looking statements, reflecting management's expectations about future events and operating plans and performance. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainty. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in today's earnings release. Our 2006 annual report to shareholders, and our 2006 10-K report. We undertake no obligation to update publicly or revise these forward-looking statements. With that, I would like to turn the call over to Jim.

Good afternoon everyone and before I get started I know it's been a tough few weeks for every one given what's happening in the markets, and I am sure all of you have been pretty busy. So I appreciate you joining us for this call. This was another good quarter for Ameriprise Financial despite some very tough market conditions. Our operating results continue to demonstrate the strength and diversity of our business. While we would obviously like to see some stability and strength in the capital markets, and while we are not immune, I feel good about our solid position. For the quarter and the full year, we generated good operating performance, our balance sheet remained solid, and we delivered on our growth goals. For the quarter, net revenues grew 8% to $2.3 billion, adjusted earnings per diluted share increased14% to $1.16, and adjusted ROE finished the year at 12.6%. There are some disclosed items and investment gains in those numbers, which all told, net out to a benefit of $0.13 per diluted share. These items are detailed in the press release, but I want to make sure we don't lose the underlying message here. Our operating results were solid in the quarter. Maybe most important of all, in this environment, our balance sheet continued to perform well. We have always taken a conservative approach to managing our balance sheet assets, we have maintained a very strict risk discipline. And while that leaves some money on the table during rising equity markets and more favorable credit markets, it also means we have been able to avoid any material investment write-downs during this time of extraordinary volatility. Now, let me review some highlights of our results during the quarter. We serve the mass affluent and affluent market in personalized financial planning…

Thank you, Jim. Before I go into the details of the quarter, I would like to reinforce Jim's overall view of our results. It was a good, solid quarter given the markets we operate today. We reported adjusted earnings of $1.16 per share. That represents a 14% increase over last year. There were several disclosed items in the quarter that positively impacted our earnings by a net $0.13 cents per share. Based on normalized operating performance for both periods, we still met our growth targets. The disclosed items are described in detail in our release and supplement, so I am not going to go into detail here. To make sure you understand the impacts, we had two large benefits plus net investment gains, and these were partially offset by increased legal and contingency reserves, as well the impact of the extraordinary market movements. All these impacts net to a benefit of $0.13 per share. Now, I will move on to discuss our operating results. In the quarter, reported net revenues were up 8%. We had strong growth in management and financial advice fees, which were up 25% over a year ago. This fee growth was driven by strong wrap net flows, variable annuity flows, and higher yields on our managed assets, including higher Threadneedle hedge fund performance fees. This increase was partially offset by lower distribution fees, due to the unusually high fees from REIT sales recorded in the fourth quarter of last year, and lower net investment income from declining fixed annuity balances. On the expense side, total expenses before separation costs increased 8% over the fourth quarter of 2006, reflecting increased business activity and market impacts. Our general and administrative expenses were up only 3% compared with a year ago. These expenses included higher hedge fund performance compensation,…

Okay. We are now...would like to take any questions that you may have. So, we are open. Question And Answer

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from Jeff Schuman from KBW. Please go ahead with your question. Jeffrey Schuman - Keefe, Bruyette & Woods: Good afternoon. Jim, given the difficult markets, I was wondering if you could talk a little bit more about your ability to adjust expenses in the near term in the Advice and Wealth Management business. And then second question I had for Walter; a little bit of clarification on disclosed items, not quite sure how the tax affected. If you take the $63 million in tax affected, I don't think we come out to $0.13. Some of the items are not tax affected. And also I am not clear what the mean reversion items are there...in the disclosed items. That's it, thank you.

Okay. Let me start with the expenses. We do have the ability to manage the expenses and flexibility around it. As we have mentioned over the last two years, we upped our level of investment. We think was critical to take advantage and some of the opportunities that we saw and closed on gaps that we had in our infrastructure. Significant part of those investments particularly were in the Advice and Wealth Management and particularly in places like the technology area for what we have been implementing over the course of this year, I mean of last year. So, we do have the ability to differ some of the any incremental expenses if necessary, but our overall investment agenda we have actually brought down any way, because we really was planned to do so as we moved into 2008. From an expense perspective, we have also upped our focus on reengineering, and so we have even a more aggressive plan for reengineering opportunities in 2008 over 2007. And we were quite successful in 2007. And we have the ability to manage some of the near term expenses for various programs depending on market conditions. And we already put in place our flexible spending plans today. And we will be able to pull those levels depending on market conditions. So we feel are able to navigate and generate some savings there and reduce our costs moving forward, and depending on how long the market stay the way they do and impact the revenue, we can even make it that more aggressive and cut investments further. So, that's in that area. And I would also say in the Advice and Wealth Management, as I said some of the investments clearly work in that area in 2007 and to a heavy extend. We have also made some changes in the management and in structure of that business and some of the slowing of the new P1s and the activities of how we reduce some of the cost will give us some benefits in 2008. So that we are continuing, and we are looking continuing for some productivity improvements, and that's why we are going to some of this aggressive training right now in the first quarter of this year.

Okay, on the second part of your question; the tax rate for any item that you basically increment that you are taking...we use the statutory tax rate, 35%. So we have been doing that and I think it's fairly traditional for most companies to do that. So if a reconciliation acquired, you can well do this more, but that's the basis of indoor effective tax rate is at a lower rate as you are taking off or adjusting, you usually use the 35% tax rate, because that's the impact it will have. As related to the... Jeffrey Schuman - Keefe, Bruyette & Woods: I want to follow-up, because you placed 35% to the $63 million. I don't you think get the $0.13. I can follow-up later on that.

Yes, okay. Let's see where we are off. I think we feel pretty confident on that one. The...on the DAC; what we are saying it since the DAC, we adjust for the movement and equity marks, then in each month and obviously each quarter as it affects the gross profits as we evaluate the insurance activities. So that's the impact of it. We are adjusting now for the future gross profits as the market moves. Jeffrey Schuman - Keefe, Bruyette & Woods: So, essentially mean reversion refers to some degree of unlocking in DAC because of the market; is that correct?

Absolutely, due to movements in equity market. Yes. Jeffrey Schuman - Keefe, Bruyette & Woods: Okay, thank you.

You are quite welcome.

Our next question comes from Suneet Kamath from Sanford Bernstein. Please go ahead.

Thank you. Two quick questions hopefully. First, in your 2006 10-K in the footnotes there you discussed the earnings impact from a 10% decline in the equity 500, and I think...in the equity markets. And I think you sited the number as of 2006 yearend at $127 million pretax. I was wondering first if you could provide an update of that...for that number for 2007, or is that $127 million still a good rule of thumb to use. And then secondly, could you just provide an update of what you are seeing in terms of third party distribution of the RiverSource funds, that was something that you had talked about in the past, I am just wondering where you are with that. Thanks.

This is Walter. Let me take the first one. It is a good rule of thumb to use. It's still pretty close, that's what we have used in our filings. And that assumes...it happens to the full year on day one. Okay? and then for second part...

Okay on the second, on the distribution of RiverSource funds externally; we did put in place the infrastructure, we have wholesalers on the ground. And over the last part of last year, we generated a few hundred million dollars of inflows. And we feel good about the progress we are making to ramp that up with feet on the ground in 2008.

Can you provide any color in terms of number of channels that you are in or number of wire houses or anything like that just to give us a sense of how it's going?

We have actually...I don't have the exact number in front of me, but we have a good number of agreements signed and of both in the broker dealer channel as well as in the bank channel, and we are continuing to make good progress. So, we are able to now distribute to a good number of reps; we will provide that detail on our coming quarter.

Okay, that would be helpful. Thanks.

Thank you.

Our next question comes from Andrew Kligerman from UBS. Please go ahead.

Hi, good evening. I have a question, and then I will do two quick follow-ups. First question is on the hedging related effects on one part of your release. You say that you generated $56 million in income from variable annuity related hedged and then later on you say that there was a $67 million expense due to market variable annuity leaving benefit riders and the impact of the application of SOP 3-1. So, it really kind of washed out pretty nicely and as you said earlier in the call, you had completed the hedging program. Remind me if I am right, I think before you had delta hedges and you needed to get the ROE and Vega [ph] in place and that's the first part. And the second part of it is, is the outlook...with the market down 11% year-to-date or I can even keep up with where the market is quite frankly. But with it down roughly that amount year-to-date, do you think the hedges will continue to work, if I understand correctly the way they did in the fourth quarter?

Sure, Andrew. What we had actually was the trend...which as we mentioned, we started migrating from the customized hedges that we have with government to more industry standard hedging. And we are in the mid stand of trying to adjust to the liability characteristics as the walls were changing and we said in the quarter that we did not have the GMB hedges fully in place. We have now migrated to cover the position on the GMAB and we have made full conversion following our basically using the industry standard hedging approach. So, from that standpoint the delta approach was not really what we were doing. The...as relates to the hedges right now and you saw where the long-term of walls are going, we believe that they will be performing and we will be monitoring. It is a tough market to certainly hedge positions. But the group is feeling that we have our hedges in place and we will just...we will monitor through.

Great. So Walter, are you hedging the hedge comments or do you feel pretty good that these hedges will kind of wash out again this quarter? Or you are just not sure at this stage of the game?

Well, as you are saw where with the walls went, it's actually almost gotten back to November's level in January. And on that basis, I am not trying to hedge my bet, no point intend. But the...I do believe as we said in the quarter, there was a $9 million impact and certainly we are targeting to operate feeling at the hedges are being affected.

Okay. And then, following back on that comments earlier about the decline in distribution fees of about 7% and you highlighted the REIT liquidations, what was the effective that last year. And maybe just to get a sense of what that impact was on the distribution fees?

Well, the interesting thing last year it becomes...that's something, we changed the way we do our reporting. So, it's going to try shift for us as we evolved it. But I had...on the distribution impact it had, the range of that was about $60 million.

$60 million...6-0.

60, 6-0.

60. Okay, great.

On revenue, that's on revenue of the U.S.

Right on revenue.

This was planned...it's within the range, Andrew. Because we can't track it specifically as reinvestment of cash proceeds; and once it becomes cash, it's tangible.

Got you. And then, the last question just on your franchisee advisors, I have been reading that you may have lost one or two big ticket advisors recently to some of your competitors maybe with Linsco [ph] or another, I can't remember. But, are you concerned about retention of some of your big ticket advisors and why might you have lost one or two of them recently there?

Our overall retention and I mentioned advisor satisfaction is quite strong. I think you are always going to have an individual decision made by an advisor. I actually believe that we are in great stead. I think people really feel good about the progress we are making in the investments. We have also able to bring in a few good advisors from experience, which is the first time ever that we are at reasonable size. So I am not over concerned as one thing that we always monitor and watch, and we are always concerned about anyone leaving. But I think there are individual circumstances that people make decisions on, and we are not unhappy with the situation we are in. I actually think if you look that our productivity is quite strong compared to any of these firms that you are talking about and our satisfaction is quite and our retention is quite strong compared to all of them. So, we are going to continue to focus our efforts, and in fact to ramp up our efforts to bring in experienced people.

Great. Thank you

Thank you. Our next question comes from Tom Gallagher from Credit Suisse. Please go ahead

Hi, let's see first question is I just want to be clear the $9 million negative impact from the living benefit guarantees, with...did that hurt earnings this quarter? Or was that offset by the positive mark on the hedge?

No, the $9 million was as a result of net after DAC after tax impact and that was an event. Then we had...we adopted SOP, which will offset that.

Okay. So, the SOP 05-1 offset, I thought your SOP 05-1 from other companies has been in negative, that was a positive for you?

Yes, it was.

Okay.

Approximately the same as the $9 million I mentioned.

Can you expand on...

Okay. So 3-1.

Right.

Not 05.

Sorry, can you just expand a little bit? I just want to understand without spending too much time, but just if it can be done in simple terms, how that's a positive, the SOP 03-1.

When we basic... when we went through our validations and trying to transfer over to looking it from 133 and then what goes in for the life contingency elements of it. The revaluing just created from that standpoint the amount of liability was reduced based on the way we have been carrying and it's that we have been a prudent...the way we have been accounting for our liability and on that basis it generated small profit.

Okay.

It's...we...like I said, we have always taken a pretty rigid approach on valuing our liabilities and therefore when we transferred over and move the portion over to the light side of it, it actually then resulted in small net change.

Okay. Next question is...

The book is quite large, so $9 million is not that big number.

Sure. The next question is the comment on DAC amortization and hedge funds and seen investment weakness. I appreciate you sort of strip that out as a one timer. Given what's happened thus far in 1Q, is it likely...it seems pretty likely that we are going to get some kind of returns to that. Is that fair assumption unless you get...we get a pretty substantial recovery in the market or am I not thinking about that the right way?

The way the mean reversion, the way the markets are that would have an impact.

Okay, next question is on...I just want to understand order of magnitude. Jim, you talked about the Advisor and Wealth Management, there are some flexibility on the expense side. If I look at what you reported there from a pretax earnings standpoint add back, the disclosed items I get $55 million of earnings, which is clearly on the low side. Can you talk a little bit about how much expense leverage were actually is assuming the sales numbers in the revenues remain under some pressure here. Is that...is $55 million going to be kind of an abnormally low number considering that you kind got hit by spending a lot while the market turns south, or as you're going to take a while to kind of really move of this level?

I think to what Walter discussed in his talking points, there are few things that did happen in the fourth quarter. One is some extra expenses based on the level of some of the investments including remember what's in that segment is the new Ameriprise Bank as well as the certificate business that there were some impacts there in the quarter that's in that Wealth and Advice segment. The second is seasonally the fourth quarter just based on some of the expenses and how they are recorded and expenses have come in a little more heavy in the fourth quarter than in the other quarters. So from a perspective, I can't talk about what the level of advisor client activities depending on the markets are, but I would say that we are not expecting that type of level to continue at that level. We think that there would be some bounce back in that based on the things that we have mentioned to you. Of course given the various markets I can't dictate, what the level of activity, but as you saw in the fourth quarter activity remained pretty good through a very volatile period.

Okay. And then the...also a question on Protection. That normalized earnings result as you all defined it was very strong and looks like auto and home produced a particularly favorable result with roughly an 85% combined ratio. Can you just comment on, I presume that was the result of some reserve releases or can you just comment on what's going on auto and home?

In the auto and home at the end that we evaluate our E&O, we did have a release based upon the performance characteristics on that and that's the same thing that happened last year from that standpoint. So it is basically part of the process we felt and that was and also there was basically, general loss ratio reduction from that standpoint. So it's performed those are two drivers.

I just want to remind you that E&O of our advisors, so it's an inner company E&O book that impacts the protection segment.

Overall just on the P&C this is Jim, just a comment is our overall business performed quite well and continues to be, so we feel good about the business and our position in it. So we don't necessarily see anything changing from the progress we have been able to make over the last year or two.

Okay and Walter, what would be the level of the reserve fully extend for the quarter?

On the based on E&O, it's $6 million.

$6 million, okay. And last question just on your Alt-A exposure, I believe there have been a number of down grades recently just generically on all day the last few weeks the...have any of your bonds been down granted? That's my last question, thanks.

Laura?

This is...we have had a few loans that were downgraded from AAA to AA because of the Fitch downgrade one of the financial guarantors. But as we said earlier, we rely on the underling cash flows and not on the guarantee. And those were in the asset-backed area, not the residential mortgage area.

Okay, thank you.

You are welcome.

Our next question comes from El Naufal from Nata [ph]. Please go ahead.

Hi, I just had a follow-up question on the one of the disclosed items. The hedge fund investment I am sorry to ask another question on this. These are Threadneedle run hedge funds or these are your...assets of yours.

These are basically our hedge funds, not Threadneedle.

Owned assets.

Owned assets.

Got it, okay. Thanks very much, appreciate it.

[Operator Instructions]. Our next question comes from Darius Braun, from Citadel [ph]. Please go ahead.

Hey guys, quick question as just as it relates to the disclosed items; I would just like to confirm that in the text of the release when you are referring to earnings being impacted by $0.06 due to extraordinary levels of market movement, is that also highlighted in the disclosed items at the back of the supplement.

Darius,This is Laura. We actually give you the other income line in the supplement. We have disclosed it forever, so you can see those trends overtime.

Okay, so this is not one of the disclosed.

It does not include those.

Okay, so that would explain the discrepancy between the 63 and the 47 people are getting to.

Yes. Thank you.

And then the next question as it relates to separation cost incorporate and other, there was an $11 million in severance cost, is that included in the disclosed items.

Yes, it's in the...what we called the legal and contingency reserves, the G&A line.

Okay, and that would be in the corporate.

In the corporate segment.

Okay. Thank you.

[Operator Instructions].

Okay. If there are no more questions, I just want to...Walter and I would like to thank you for taking the time today. And if there are any other questions, Laura and team can follow-up with you.

I will be in my office for a while, yes, this evening; and the number is 612-671-2080. Thank you.

Thank you, ladies and gentlemen. This concludes the fourth quarter 2007 earnings call. Thank you for participating. You may all disconnect.