Welcome to the 2010 Third Quarter Earnings call. My name is Sandra and I will be your operator for today’s 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. Ms. Gagnon, you may begin.

Thank you and welcome to the Ameriprise Financial Third Quarter Earnings call. With me on the call today are Jim Cracchiolo, Chairman and CEO; and Walter Berman, Chief Financial Officer. After their remarks, we will take your questions. During the call, you will hear references to various non-GAAP financial measures 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 materials, available on our website. Some of the statements that we make on this call may be 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 uncertainties. 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 and related presentation slides, our 2009 annual report to shareholders and our 2009 10-K report. We undertake no obligation to update publicly or revise these forward-looking statements. With that, I’d like to turn the call over to Jim.

Good morning. Thanks for joining us for our third quarter earnings call. This morning Walter and I will give you our thoughts on the Company’s performance for the quarter and the progress we’re making across the business. We’ll also provide (audio interference). Let’s get started. This was another strong quarter for us. In fact, despite the continuing challenges in the environment, we achieved our highest quarterly revenues and earnings since we’ve been a public company with $2.4 billion of net operating revenues and $355 million of operating earnings. Operating earnings per share of $1.37 represent an increase of 32% compared with a year ago, and 25% compared with last quarter. Our operating return on equity reached 12% which is up nicely compared with the last couple of years. While we realized benefits from DAC in the quarter, strong business fundamentals drove these results. We continue to generate higher margins in our more fee-based segments - advice and wealth management and asset management - and our client base and advisor productivity continued to improve. We are realizing the benefits of the Columbia transaction and our other acquisitions which helped drive owned, managed and administered assets to an all-time high of $649 billion. Our strong financial foundation and prudent operating principles continue to serve us well. The balance sheet remains very strong and we continue to hold considerable excess capital and liquidity positions which gives us significant flexibility to invest for growth, to manage through a difficult environment, and to return capital to shareholders. In fact, I believe we are one of the few firms in the industry that had the strength to repurchase shares. During the quarter, we bought back an additional 3.6 million shares for $153 million, bringing our total buyback for the year to 9.3 million shares for $373…

Thanks, Jim. We posted slides on our website again this quarter, and they will be updated with my talking points after the call. Please take a moment to review the Safe Harbor statement on Page 2 and then turn to Slide 3. This was a record quarter for Ameriprise. Reported EPS was $1.32 and operating earnings per share were $1.37, up 32%. Revenues were up 26% and we maintained strong expense control which resulted in improved margins. Our operating return on equity, excluding AOCI, reached 12%; and finally, our balance sheet fundamental remain strong. Slide 4 reflects highlights of our performance. In the quarter, our operating earnings were 355 million. The 31% growth in operating earnings was achieved despite a significant year-over-year decline in DAC unlocking benefits. In the quarter, we generated a net positive DAC unlocking and other benefits of 47 million versus 105 million last year. The substantial year-over-year improvement in operating performance reflects the following items: growth in business drivers, realized reengineering benefits, the acquisition of Columbia Management, and the impact of the 10% year-over-year increase in the equity markets. On the next slide we provide more insight into the DAC and our associated assumptions. Of the 47 million in after-tax items in the quarter, 37 million of the benefit was generated by unlocking. The two major drivers were: first, updated persistency assumptions drove an overall benefit of 101 million. Persistency on both fixed and variable annuities has improved to the point we needed to increase DAC amortization periods to better align the recognition of expense with revenues anticipated over the life of the business. Of course, while improved persistency has a positive impact on continuing fees and spread revenue, it could also lead to increased benefit costs from variable annuity guarantees; so we needed to increase…

Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question please press star then one on your touchtone phone. The first question is from Tom Gallagher from Credit Suisse. Please go ahead. Tom Gallagher – Credit Suisse Securities: Thanks. A few detail questions for Walter. You had commented about reducing the long-term interest rate assumptions. The first part of that is, can you comment on how much you’ve lowered your fixed income separate account return assumptions to? I believe from your 10-K disclosures, they were 6.5% a year. So first question, is what has that been changed to?

It’s been changed to 6. Tom Gallagher – Credit Suisse Securities: So from 6.5 to 6? Got it.

Yes, that’s correct. Tom Gallagher – Credit Suisse Securities: Now just one mechanical question. Six percent from this point forward with interest rates—with corporate bond yields in the 3 to 4 range, would imply capital appreciation to get to a 6% long-term return assumption. So is that consistent with—so that, to me, implies that you’re assuming interest rates will go down from here for an extended period of time to get to a 6% long-term return assumption. Is that consistent with your interest rate assumptions on your general account right now?

What we assumed, Tom, was that for the near-term period that the rate on that would be sub-3; and then in the end of 2012 period, we’re assuming the Treasury will be, like, a 5, and then with the spread we’ll take it to a 6. And that’s how we got to it, and we think that is consistent. Tom Gallagher – Credit Suisse Securities: Okay. I guess, Walter, my point would be for money that are going into these contracts today, 6% would appear to be—the only that’s going to happen is if rates go down and stay down. I understand your point that as you move forward on average, if rates rise, you’d be clipping higher coupons. But for funds that go into contracts in the next year, 6% seems unlikely unless rates actually go down from here and stay down. But we can debate that more offline.

Okay. Tom Gallagher – Credit Suisse Securities: I don’t know if you agree or disagree with that. I just—I think it’s improbable that you’d get 6% unless interest rates actually go down for money being put into contracts now.

Like I said, we’re assuming now for the shorter period that the rate is going to actually be substantially under that. It’s going to be under 3, and then as you look at the forward rate curve, they seem to support that in the two to three-year time frame, you could get to the ranges that we’re talking about. So actually I think we’re agreeing. Tom Gallagher – Credit Suisse Securities: Okay. And then just a related question – is that consistent with the discount rate change you made on the general account side, whether it’s to the secondary guarantee UL or long-term care?

On the secondary, yes. It is reasonably consistent. Tom Gallagher – Credit Suisse Securities: Okay. And then last question is the—I just want to understand sort of go-forward annuity DAC amortization, how we should be thinking about that. I know there was a write-up this quarter and I understand—or least have a rough understanding of the mechanics. But last quarter I think the DAC run rate amortization was about 85 million normalized. This quarter it was 62 million. Can you give us some idea of what the run rate would be going forward? Is the 62 million a good run rate? Is it going to go up or down?

Obviously—let me try and do it this way. The impact was effective in the quarter, so when we look at going forward, as I said, with the lengthening of the lives and then with the overtrades, I don’t think we see a major change in the near term as it relates to that, versus— Tom Gallagher – Credit Suisse Securities: So Walter, would the 62 million amortization rate be a decent run rate, which would imply annuity earnings of 150 million-plus a quarter; or is it back to 2Q level? I just want to clarify that.

Probably closer to the 2Q level. Tom Gallagher – Credit Suisse Securities: Understood. Thank you.

Thank you. The next question is from John Nadel from Sterne Agee. Please go ahead. John Nadel – Sterne Agee: Hey, good morning, everybody. If we go back to Slide 11 for a second, it indicates that you guys have year-to-date 47 million of synergies, or I guess I’d just call that cost saves, but whatever. If memory serves, at second quarter that synergy estimate was 14 million, so it looks like you got a pretty meaningful kicker incrementally of about $33 million. I guess my question is (1) am I doing that math right? And then if so, I guess I’m a little surprised that sequentially, or quarter-over-quarter, that asset management earnings didn’t actually come through even better despite the market drag with the average S&P down. So is there something else we should be thinking about there? Is it drag? Is it fee rates coming down, or anything like that, that we should be thinking about?

No, I don’t think so. I think—listen, the pattern of that as we went in, it will slow a little and then build up in 2011; and as it relates to the quarter, certainly we had the impact of the quarter-over-quarter 4% drop, but there’s nothing that we see as problematic. John Nadel – Sterne Agee: Okay. But the math is right, right? That’s an additional 33 million quarter-over-quarter?

Approximately right, yes. That is approximately correct. John Nadel – Sterne Agee: Okay. Second question is just on protection. In your remarks, Walter, I think you mentioned that about half of the quarter-over-quarter decline, or about $10 million, was related to low interest rates on the impact on UL and VUL reserves. Should we be thinking about that as a one-time item or is that a—if rates remain at around current levels, we’ve got to think about that as a sustainable, sort of higher level of benefit expense?

I think if rates stay where they are, you should think of it as a continual benefit. John Nadel – Sterne Agee: Got it. And then finally just on your—with your adjustments to the DAC in the annuity business, can you give us a sensitivity if you lowered, for instance, the equity market assumption from 9 to 8 long-term, what kind of an impact that would be?

Well, basically you’re taking out—let me just say this. I think when we adjusted through with the elements, it’s moved from, like, 10—yeah, it’s down from 10, too. So the amount on that is, (inaudible), on the equity side is around 36 million, and that’s moving a point and a half. I’m guessing right now it may be 20 or something like that. But it’s a guess. It really is. John Nadel – Sterne Agee: Okay. I’ll follow up with you afterwards.

Because normally we wouldn’t take it below 8—below 9. John Nadel – Sterne Agee: Got it. Thank you. I hope you’re right.

Thank you. The next question is from Andrew Kligerman from UBS. Please go ahead. Andrew Kligerman – UBS: Hey, good morning. A couple of questions. First, around the asset management business. On the equity side, only 54% were in the top 2 quartiles. Last quarter I think it was over 70%. A little color on what’s going on there; and secondly, once you merge the funds—if you had merged the funds officially this quarter, what would that number look like? And then tied into that question is the outflows in U.S. mutual funds of about—or net outflows of about $3.2 billion. The question is how much of that would you say is related to the integration, and when does the integration of Columbia RiverSource become a non-event?

Hi Andrew. First, I would say that in speaking to our investment professionals, they’ve had a bit more of a defensive position. They actually feel quite good about the make-ups of the portfolios and the type of securities they have in them; and so I think quarter to quarter you’re always going to experience a level of volatility. But we think we’ve got good three and five-year records. We think that the consistency of their performance over the last number of periods adds value to that, and so they feel very comfortable with it. So we don’t have a concern here that the overall performance is slipping in any fashion. In regard to the—what your second question was around— Andrew Kligerman – UBS: Yeah, just if you combined all the funds now and kind of dropped off the weaker ones, would that 54 be materially higher?

Yeah, I think what you’ll find is that as we merge all the funds together, we will have a better lineup of performance. And we will be dropping off some of the underperforming records that we have in some of the smaller funds as well. But I would say overall we have a good lineup. I’m quite excited about what that looks like as a consolidated sort of lineup of funds, and I think once that starts to get communicated and consistently applied out through the distribution force, that should be good as a positive. Regarding the flows, I would just say it’s a combination of factors, as Walter and I have mentioned. Clearly you do have an industry-wide pullout of equity funds. I mean, redemptions are a bit up across the industry and new sales aren’t coming in there. I think a lot of flows in some of the fund families have really come into the fixed income. Over 60% of our funds are more in the equity base. That’s sort of the positioning that we’ve had out in the marketplace. The second thing, as you would imagine, is we’ve just announced the lineup of the new funds so people don’t want to put into funds that they may think closed. We also just got the new wholesaling force coordinated and they’re picking up the new products and the new territories, so that takes a bit of time. And we still are experiencing some outflows in some of the sub-advisor funds that have underperformed in the past, so I think the reason you see a bit of an increase is because we picked up three months of Columbia for the third quarter. We only had two in in the second quarter that was some of the outflows that we’re continuing to see. So I think that’s along the lines. You know, we would love for it to—hope to get it turned around, and that’s what we’re really focused on. But we did expect some of this based on a combination of the factors I just mentioned. Andrew Kligerman – UBS: And then just a quick follow-on question on the protection segment with disability income and long-term care claims elevating. Can you reiterate – I think, Jim, you were saying it was about a $10 million impact, and what are you doing in those product lines to mitigate it? Are you repricing the DI and the LTCI, or do you just think things are going to revert to where results were?

Okay, it’s Walter, Andrew. On the LTC, obviously we are in repricing and we’ve certainly filed for pricing. As relates to the DI, as we indicated, it looked like that was a spike-up in the quarter. On a year-to-date basis it’s actually on trend line where we are, so we’re feeling quite comfortable with no action. We have some of the lowest claim rates, probably, in the industry so we don’t really feel there’s a pattern change here at all at this stage. Andrew Kligerman – UBS: And what’s the repricing on the LTCI?

We’ve been filing for rate increases in various state venues as we—for the— Andrew Kligerman – UBS: Like 10%? 12, 15?

We’ve been doing that for quite some time and we continue to file that. Andrew Kligerman – UBS: Yeah, I mean, but how much? Like, 10%? 15?

It varies. It varies. Obviously there’s a whole set of tests that you go through with the state to demonstrate the profitability of it. It’s ranged all over depending on state. But it’s been a program we’ve been doing and we obviously valuate that relative to the current rate, so it’s a detailed review that goes on. But it’s—we constantly assess and we’re constantly filing. Andrew Kligerman – UBS: All right. Thanks a lot.

Thank you. The next question is from Suneet Kamath from Sanford Bernstein. Please go ahead. Suneet Kamath – Sanford Bernstein: Thank you and good morning. A couple questions on the advice and wealth business. The first question is if we think about that 21% lift in productivity from the third quarter of ’09, can you tell us how much of that was based on just markets being higher this quarter versus how much of it was from actual increases in real productivity, client activity, that sort of thing?

We probably don’t have the exact, but the way I would probably think about it is your markets were up roughly 9% on equity, and so not all the assets are equity based; I mean, heavily they’re not. And so I think you get a piece of it from the equity markets, a piece of it from increased client activity, and then a piece from client inflows that we’ve experienced over the last year that has also moved into products like the wrap. So it was roughly 2 billion just for the quarter, but if you add up the total quarters over the year, you’ll find that it was a nice increase. So it’s a combination of those factors. Suneet Kamath – Sanford Bernstein: Okay. I might request, if it’s possible, to maybe break that out in your supplement going forward. I think it would be helpful to understand the health of the business. The second question is--

We’ll look at it and see what makes sense. Suneet Kamath – Sanford Bernstein: All right. That’s great. Appreciate it. Second question on the business is the employee advisor retention at, I think, 78%. I think that’s probably one of the highest levels I’ve seen. Should we assume from that, that you’re sort of done with the productivity—minimum productivity standard implementation and perhaps now we can start to think about growing the employee advisor base over the next couple quarters; or do you still think that advisor count is going to be flat to down?

I think, as you said, the retention rate is probably for our employees the highest that we have had it at, and we continue to see a slowing quarter to quarter. It’s not necessarily completely over because there are still people that we had added a year ago and two years ago that continue—just as you know, as they mature you always have an attrition rate because they can’t necessarily keep on taking the step up, and we still have advisors in the system such as that. But I think as it goes on, we’ll have it more normalized. As you see, the retention rate’s starting to pick up and we’re hoping to get that into the 80s. And so for the employee system and for the franchisee system, it’s quite strong. From a replacement perspective, as you know, when you have 11,000, 12,000 advisors, just to replace normal attrition – people leaving, succession planning, people retiring, et cetera – you have to make up for all of that. And what we’ve been doing is instead of looking at it as just a count of advisors, we’re trying to add to teams. We’re trying to give them greater support that they can build out their practices, not necessarily with new reps but with support staff and assistant advisors who are also recruiting in, we think, more experienced people that have books of business already. So we’re focused more on the productivity aspects. Over time, I would say over the next number of quarters, yes, I would like to get that to be more of a flat first and then hopefully get it to rise to—slightly in the periods; but the focus will be on increased productivity and growth of practices in combination to the number of people that we have. Suneet Kamath – Sanford Bernstein: Got it. Okay. And then the last question I have is just on the impact of low interest rates on the advice and wealth business. Walter, in your prepared comments you talked about that drag being significant. Can you help us quantify what that drag is right now? That would be helpful. Thanks.

If you’re referring to the advice and wealth management, obviously the drag is continuing, so the change is really not an impact for us from that standpoint. It’s just staying at a lower rate, as we spoke to you about, that we were hoping and as we looked at the rates that they would increase, which would then generate profitability. But the quarter-over-quarter change is not significant at all from that standpoint. It is certainly just we’re looking for the uplift as the short-term rates go up. Suneet Kamath – Sanford Bernstein: No, I got that; but just the absolute level of drag. I’m not talking about quarter-over-quarter. Just what are the cash balances, what do you normally earn on them, and what are you earning right now? Maybe that’s the way to do it.

As we indicated last time, we’re earning in the 50 basis point range on the sweep accounts, and we continue to earn in that range; and that’s at the low end of the spectrum. And that’s what we see continuing until we start seeing short rates go up. Suneet Kamath – Sanford Bernstein: Got it. And the sweep balance right now is how much?

It’s about 11 still, I think. We’ll get back to you, but I think it’s about in the 11 range. Suneet Kamath – Sanford Bernstein: Eleven billion?

Yes. Suneet Kamath – Sanford Bernstein: Okay. Thank you.

As a reminder, if you would like to ask a question, please press star, one on your phone. The next question is from Colin Devine from Citi. Please go ahead. Colin Devine – Citigroup: Good morning. I have a couple questions. Walter, with respect to the changes made on the variable annuity line, which is on persistency, and then also benefit payment expectations. I was wondering if you could just expand on that a little bit. Now, in terms of your DAC policy, over how many years has that now changed? And then in terms of future benefits, what’s changed in your thinking as to what you’re going to be paying out? Is it death benefits? Is it lifetime benefits? And then how much did you add to reserves? I’m trying to make that out from the stat supplement, and I don’t know if it was actually a couple hundred million, but perhaps you could expand on that. And then just changing gears, perhaps, for Jim, I know a big focus has been to bring in non-proprietary products and to get those sold through your system. Can you give us some update as to how that’s evolving, please?

As relates to what’s changed, certainly we have observed that people that have living benefits tend to lapse less, and certainly people, as you have indicated, certainly in the money tend to lapse less also. And on that basis, we’ve gone in looking at the behavioral patterns and made the adjustment, and the number’s in the $200 million range. As it relates to the amortization period on variable annuities, it was looking and evaluating where we were. Basically it went up to, I believe—it doubled for—it went from 20 to 40 on fixed annuities—on variable annuities, and on fixed annuities it went up to 30 years, and that’s based upon the actuaries evaluating the performance characteristics. So— Colin Devine – Citigroup: Walter, I’m sorry, did you say your DAC in your variable annuities is now over 40 years?

That’s correct. Colin Devin – Citigroup: Or did I misunderstand you?

No, you did not misunderstand me.

Okay. And in terms of your commission structure, are you largely—are your Vas largely sold with a C-share or an L-share?

I’m not following. Say it again? Colin Devine – Citigroup: Do they have a trail commission on them or is it largely an upfront commission that you’re—

Largely upfront. Colin Devine – Citigroup: All upfront? Okay.

Largely, yes.

Thank you. The next question is from John Hall from Wells Fargo. Please go ahead. John Hall – Wells Fargo Securities: Great, thanks very much. When I look at the $1.5 billion of—or more than $1.5 billion of excess capital, and then I look at the amount of shares that were repurchased in the quarter of 150-some odd million, roughly half of income generated in the quarter. I just wonder about what’s driving the pace of share repurchase. At that rate, you’re not actually reducing your capital at all. You’re barely holding even with that $1.5 billion of excess. So I was wondering if you could just comment on how you think about the pace of share repurchases going forward?

All right. The pace was established as we—we went out with authorization back in the second quarter. We established the 1.5 buyback and certainly that pace is looking at—and we look at a multitude of factors. We look at certainly the situation. We look at certainly as we shift to lower capital intense activities. So there’s a whole host of elements that go in. Right now with the 1.1 billion left, we intend over the period to certainly—depending on—if situations stay, that we will execute the share repurchase. You’re right; but the fact is the earnings are growing and they are generating a return, and factored into how we evaluate it is the generation of earnings, and we will reevaluate. As we generate the earnings, we look at the situation and we evaluate what the best way is to return to our shareholder. So we are—we still have 1.1 billion. We’ll evaluate it and intend to—just in light of the current environment, continue on the pace that we’ve seen, measuring the environment and measuring our capacity to return. John Hall – Wells Fargo Securities: But I guess the question is, is the objective of the share repurchase program to whittle away that $1.5 billion of excess that you have, or is it just to, on a recurring basis, return a certain percentage of the earnings that you generate?

I think the objective is twofold. Obviously saving the soundness of the organization to ensure at any given time as we look at the situation we have appropriate capital to meet the needs of the business. So that is a changing situation. Part of the formula that goes in there is the earning generation and the situation that we think we are. We don’t believe retaining excess capital is certainly in the best interest of shareholders so therefore we look at various ways to return that, and we are generating a lot and certainly our required capital is going down as we shift into the low capital intense. That will be taken into consideration as we evaluate how to best return to shareholders. John Hall – Wells Fargo Securities: Okay. My next question has to do with the sales of the annuities. The new product, was this an entire—a full quarter of that new product being on the shelf, or are the sales reflective of some partial period of it being available?

I think it’s more reflective of a partial as it builds up, as to the network. It takes time to get to a steady state.

Yeah, it was launched towards the latter part of July, and so the sales were building up through the quarter. So it did not have a full quarter of activity. I’d also like to just circle back to Colin’s last part of it—his third part of the question. We did add other annuity products to the shelf in the quarter at the same time we launched the new product. We have received some uptake but still a large part of the sales have gone to the new RiverSource product. In regard to what we’ve done over time is we have a pretty large group of funds in SMA accounts on our shelf over the years, thousands of them. But we’ve also added hundreds more as people have requested some different variety, or if people are joining us and had certain other fund activity or separate accounts that they wanted to bring over. So we’ve got a very wide and broad platform on the investment side. We started with the launch of some additional annuity products in the channel, as we said, in July. The architecture, even for our annuities, is all open architecture under it for investment. And then in the insurance, we have a wide range of products from different companies also on our shelf that our advisors can utilize for their client needs. And so we’ll continue to look to expand that over time, and we’re doing it in a very informed way so that we can get the right uptake and the right training and the right support. John Hall – Wells Fargo Securities: Great. My final question has to do with—I guess, it’s a little bit more forward-looking into the fourth quarter and concerns performance fees potentially generated. Where do you stand on those types of assets and accounts where you would generate performance fees? Are you in a position where that is a net positive in your mind right now?

As of now, and as you know, it changes. We are in a net positive position. John Hall – Wells Fargo Securities: Great. Thank you.

You’re welcome.

Once again, if there are any questions, please press star, one on your phone. Standing by for questions. At this time there are no further questions. I’ll turn the conference over to Ms. Laura Gagnon for final remarks.

Thank you. Before we end the call, I’d like to remind you that we will be holding our annual Financial Community Meeting on November 11 at the New York Stock Exchange. At that meeting, we will provide some commentary on our progress and performance, and we’ll give you (audio interference) global asset management business with presentations from Ted Truscott and Crispin Henderson. We hope to see you there. With that, we’d like to thank you for joining us today.

Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.