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** **

 

** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM 10-Q**

** **

**x****      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

** **

**For the Quarterly Period Ended March 31, 2011**

** **

**or**

** **

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

 

**For the Transition Period from                  to                 **

 

**Commission File No. 811-00002**

 

**AMERIPRISE CERTIFICATE COMPANY**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                                                   | ** ** | **41-6009975**                       |
|----------------------------------------------------------------|------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |       | (I.R.S. Employer Identification No.) |

 

| **1099 Ameriprise Financial Center, Minneapolis,   Minnesota** | ** ** | **55474**  |
|----------------------------------------------------------------|------------|------------|
| (Address of principal executive offices)                       |       | (Zip Code) |

 

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

 

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o  No  o

 

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

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  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 May 2, 2011** |
|-----------------------------------------|------------|----------------------------------------------------|
| Common Shares (par value $10 per share) |       | 150,000 shares                                     |

 

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

 

 

 

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**AMERIPRISE CERTIFICATE COMPANY**

 

**FORM 10-Q**

 

**INDEX**

 
| Part I.  | Financial Information: |                                                                                                            |
|---------------|------------------------|-----------------------------------------------------------------------------------------------------------------|
|          |                   |                                                                                                            |   |
|          | Item 1.                | Financial Statements                                                                                            |   |
|          |                   |                                                                                                            |   |
|          |                   | Consolidated   Statements of Operations — Three months ended March 31, 2011 and 2010                  | 3 |
|          |                   |                                                                                                            |   |
|          |                   | Consolidated   Balance Sheets — March 31, 2011 and December 31, 2010                        | 4 |
|          |                   |                                                                                                            |   |
|          |                   | Consolidated   Statements of Cash Flows — Three months ended March 31, 2011 and 2010                  | 5 |
|          |                   |                                                                                                            |   |
|          |                   | Consolidated   Statements of Shareholder’s Equity — Three months ended March 31, 2011   and 2010 | 6 |
|          |                   |                                                                                                            |   |
|          |                   | Notes to Consolidated Financial Statements                                                                      | 7 |
|          |                   |                                                                                                            |   |
|          | Item 2.                | Management’s   Narrative Analysis                                                                          | 19 |
|          |                   |                                                                                                            |   |
|          | Item 4.                | Controls and   Procedures                                                                                       | 22 |
|          |                   |                                                                                                            |   |
| Part II. | Other Information:     |                                                                                                            |
|          |                   |                                                                                                            |   |
|          | Item 1.                | Legal Proceedings                                                                                               | 23 |
|          |                   |                                                                                                            |   |
|          | Item 1A.               | Risk Factors                                                                                                    | 23 |
|          |                   |                                                                                                            |   |
|          | Item 6.                | Exhibits                                                                                                        | 23 |
|          |                   |                                                                                                            |   |
|          | Signatures             | 24                                                                                                              |
|          |                   |                                                                                                            |
|          | Exhibit Index     | E-1                                                                                                             |

 

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**AMERIPRISE CERTIFICATE COMPANY**

**PART I.  FINANCIAL INFORMATION**

 

**ITEM 1.  FINANCIAL STATEMENTS**

 

**CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**

**(in thousands)**

 
| ** **                                                                         | ** ** | **Three Months Ended March 31,** | ** ** |
|------------------------------------------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                                                         | ** ** | **2011**                                             | ** ** | **2010** | ** ** |
| ** **                                                                         | ** ** | ** **                                           | ** ** | ** ** | ** ** |
| Investment   income                                                                |       | $                                                    | 31,020     |   | $ | 44,455 |   |
| Investment expenses                                                                |       | 6,953                                                |       | 8,520 |   |
| Net investment income before provision for   certificate reserves and income taxes |       | 24,067                                               |       | 35,935 |   |
| Net provision for certificate reserves                                             |       | 8,664                                                |       | 16,996 |   |
| Net investment income before income taxes                                          |       | 15,403                                               |       | 18,939 |   |
| Income tax expense                                                                 |       | 5,745                                                |       | 6,921 |   |
| Net investment income                                                              |       | 9,658                                                |       | 12,018 |   |
|                                                                               |       |                                                 |       |   |   |
| Net realized gain on investments                                                   |       | 1,448                                                |       | 3,811 |   |
| Income tax expense                                                                 |       | 507                                                  |       | 1,334 |   |
| Net realized gain on investments, after-tax                                        |       | 941                                                  |       | 2,477 |   |
| **Net income**                                                                     |       | $                                                    | 10,599     |   | $ | 14,495 |   |
|                                                                               |       |                                                 |       |   |   |
| Supplemental Disclosures:                                                          |       |                                                 |       |   |   |
| Net realized gain on investments:                                                  |       |                                                 |       |   |   |
| Net realized gain on investments before impairment   losses on securities          |       | $                                                    | 1,537      |   | $ | 6,381 |   |
| Total other-than-temporary impairment losses on securities                         |       | —                                               |       | (4,662 | ) |
| Portion of loss recognized in other comprehensive   income                         |       | (89                                                  | )          | 2,092 |   |
| Net impairment losses recognized in net realized   gain on investments             |       | (89                                                  | )          | (2,570 | ) |
| Total net realized gain on investments                                             |       | $                                                    | 1,448      |   | $ | 3,811 |   |

 

*See Notes to Consolidated Financial Statements.*

 

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**AMERIPRISE CERTIFICATE COMPANY**

 

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share data)**

 
| ** **                                                            | ** ** | **March 31, 2011** | ** ** | **December 31, 2010** | ** ** |
|-----------------------------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                                            | ** ** | **(unaudited)**              | ** ** | ** **                      | ** ** |
| **Assets**                                                            |       |                         |       |                            |       |
| Qualified Assets                                                      |       |                         |       |                            |       |
| Cash equivalents                                                      |       | $                            | 215,892    |                            | $          | 182,192 |   |
| Investments in unaffiliated issuers                                   |       | 2,909,882                    |       | 3,085,562                       |       |
| Receivables                                                           |       | 18,051                       |       | 20,967                          |       |
| Equity derivatives, purchased                                         |       | 97,225                       |       | 89,014                          |       |
| Total qualified assets                                                |       | 3,241,050                    |       | 3,377,735                       |       |
|                                                                  |       |                         |       |                            |       |
| Deferred taxes, net                                                   |       | 46,298                       |       | 45,367                          |       |
| Total assets                                                          |       | $                            | 3,287,348  |                            | $          | 3,423,102 |   |
| ** **                                                            |       |                         |       |                            |       |
| **Liabilities and Shareholder’s   Equity**                       |       |                         |       |                            |       |
| Liabilities                                                           |       |                         |       |                            |       |
| Certificate reserves                                                  |       | $                            | 3,016,697  |                            | $          | 3,159,831 |   |
| Current taxes payable to parent                                       |       | 11,895                       |       | 7,667                           |       |
| Payable for investment securities purchased                           |       | 962                          |       | —                          |       |
| Equity derivatives, written                                           |       | 84,923                       |       | 75,201                          |       |
| Accounts payable and accrued liabilities and other   liabilities      |       | 17,836                       |       | 17,909                          |       |
| Total liabilities                                                     |       | 3,132,313                    |       | 3,260,608                       |       |
|                                                                  |       |                         |       |                            |       |
| Shareholder’s Equity                                             |       |                         |       |                            |       |
| Common shares ($10 par value, 150,000 shares   authorized and issued) |       | 1,500                        |       | 1,500                           |       |
| Additional paid-in capital                                            |       | 172,597                      |       | 181,998                         |       |
| Total retained earnings                                               |       | 15                           |       | 15                              |       |
| Accumulated other comprehensive loss, net of tax                      |       | (19,077                      | )          | (21,019                         | )          |
| Total shareholder’s equity                                       |       | 155,035                      |       | 162,494                         |       |
| **Total liabilities and   shareholder’s equity**                 |       | $                            | 3,287,348  |                            | $          | 3,423,102 |   |

 

*See Notes to Consolidated Financial Statements.*

 

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**AMERIPRISE CERTIFICATE COMPANY**

 

**CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**(in thousands)**

 
| ** **                                                                          | ** ** | **Three Months Ended March 31,** | ** ** |
|-------------------------------------------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                                                          | ** ** | **2011**                                             | ** ** | **2010** | ** ** |
| **Cash Flows from Operating   Activities**                                          |       |                                                 |       |   |   |
| Net income                                                                          |       | $                                                    | 10,599     |   | $ | 14,495 |   |
| Adjustments to reconcile net income to net cash   provided by operating activities: |       |                                                 |       |   |   |
| Interest added to certificate loans                                                 |       | (16                                                  | )          | (37 | ) |
| Amortization of premiums, accretion of discounts,   net                             |       | 1,091                                                |       | (810 | ) |
| Deferred income taxes                                                               |       | (2,062                                               | )          | 3,967 |   |
| Net realized loss (gain) on investments                                             |       | (244                                                 | )          | 310 |   |
| Provision for loan loss                                                             |       | (1,204                                               | )          | (4,121 | ) |
| Changes in operating assets and liabilities:                                        |       |                                                 |       |   |   |
| Dividends and interest receivable                                                   |       | 2,262                                                |       | 5,110 |   |
| Certificate reserves, net                                                           |       | (1,918                                               | )          | (4,415 | ) |
| Due to (from) parent for income taxes, net                                          |       | 4,228                                                |       | (14,461 | ) |
| Derivatives, net                                                                    |       | 1,511                                                |       | 3,616 |   |
| Derivatives collateral, net                                                         |       | 1,567                                                |       | 3,618 |   |
| Other, net                                                                          |       | (2,355                                               | )          | (3,033 | ) |
| **Net cash provided by operating   activities**                                     |       | 13,459                                               |       | 4,239 |   |
| ** **                                                                          |       |                                                 |       |   |   |
| **Cash Flows from Investing   Activities**                                          |       |                                                 |       |   |   |
| Available-for-Sale securities:                                                      |       |                                                 |       |   |   |
| Sales                                                                               |       | 26,081                                               |       | 1,903 |   |
| Maturities and redemptions                                                          |       | 365,505                                              |       | 554,766 |   |
| Purchases                                                                           |       | (227,441                                             | )          | (33,969 | ) |
| Syndicated loans and commercial mortgage loans:                                     |       |                                                 |       |   |   |
| Sales                                                                               |       | 133                                                  |       | 1,974 |   |
| Maturities and redemptions                                                          |       | 18,738                                               |       | 22,463 |   |
| Purchases and fundings                                                              |       | (1,600                                               | )          | (42 | ) |
| Certificate loans:                                                                  |       |                                                 |       |   |   |
| Payments                                                                            |       | 82                                                   |       | 233 |   |
| Fundings                                                                            |       | (41                                                  | )          | (148 | ) |
| **Net cash provided by investing   activities**                                     |       | 181,457                                              |       | 547,180 |   |
| ** **                                                                          |       |                                                 |       |   |   |
| **Cash Flows from Financing   Activities**                                          |       |                                                 |       |   |   |
| Payments from certificate owners                                                    |       | 247,607                                              |       | 269,358 |   |
| Certificate maturities and cash surrenders                                          |       | (388,823                                             | )          | (596,849 | ) |
| Dividend/return of capital to parent                                                |       | (20,000                                              | )          | (80,000 | ) |
| **Net cash used in financing   activities**                                         |       | (161,216                                             | )          | (407,491 | ) |
| ** **                                                                          |       |                                                 |       |   |   |
| **Net increase in cash equivalents**                                                |       | 33,700                                               |       | 143,928 |   |
| Cash equivalents at beginning of period                                             |       | 182,192                                              |       | 309,183 |   |
| **Cash equivalents at end of period**                                               |       | $                                                    | 215,892    |   | $ | 453,111 |   |
| ** **                                                                          |       |                                                 |       |   |   |
| **Supplemental disclosures including   non-cash transactions:**                     |       |                                                 |       |   |   |
| Cash paid for income taxes                                                          |       | $                                                    | 4,794      |   | $ | 18,704 |   |
| Certificate maturities and surrenders through loan   reductions                     |       | 213                                                  |       | 467 |   |

 

*See Notes to Consolidated Financial Statements.*

 

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**AMERIPRISE CERTIFICATE COMPANY**

 

**CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (UNAUDITED)**

**Three Months Ended March 31, 2011 and 2010 (in thousands, except share data)**

 
| ** **                                                                                                                       | ** ** | ** **         | ** ** | ** ** | ** ** | ** **     | ** ** | **Retained Earnings** | ** ** | ** **         | ** ** | ** **                   | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|------------|------------|----------------|------------|----------------------------|------------|--------------------|------------|------------------------------|------------|
| ** **                                                                                                                       | ** ** | ** **         | ** ** | ** ** | ** ** | ** **     | ** ** | **Appropriated**           | ** ** | ** **         | ** ** | ** **                   | ** ** | ** ** | ** ** |
| ** **                                                                                                                       | ** ** | ** **         | ** ** | ** ** | ** ** | ** **     | ** ** | **for Additional**    | ** ** | ** **         | ** ** | **Accumulated**              | ** ** | ** ** | ** ** |
| ** **                                                                                                                       | ** ** | **Number of** | ** ** | ** ** | ** ** | **Additional** | ** ** | **Interest on**       | ** ** | ** **         | ** ** | **Other**                    | ** ** | ** ** | ** ** |
| ** **                                                                                                                       | ** ** | **Outstanding**    | ** ** | **Common** | ** ** | **Paid-In**    | ** ** | **Advance**                | ** ** | ** **         | ** ** | **Comprehensive Loss,** | ** ** | ** ** | ** ** |
| ** **                                                                                                                       | ** ** | **Shares**         | ** ** | **Shares** | ** ** | **Capital**    | ** ** | **Payments**               | ** ** | **Unappropriated** | ** ** | **Net of Tax**     | ** ** | **Total** | ** ** |
|                                                                                                                             |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| **Balance at January 1, 2010**                                                                                              |       | 150,000            |       | $          | 1,500      |           | $          | 297,964                    |       | $                  | 15         |                         | $          | (6,373 | ) | $ | (47,908 | ) | $ | 245,198 |   |
| Comprehensive   income:                                                                                                          |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| Net   income                                                                                                                     |       | —             |       | —     |       | —         |       | —                     |       | 14,495             |       | —                       |       | 14,495 |   |
| Other   comprehensive income, net of tax:                                                                                        |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| Change   in net unrealized securities losses                                                                                     |       | —             |       | —     |       | —         |       | —                     |       | —             |       | 15,192                       |       | 15,192 |   |
| Change   in noncredit related impairments on securities and net unrealized securities   losses on previously impaired securities |       | —             |       | —     |       | —         |       | —                     |       | —             |       | (1,871                       | )          | (1,871 | ) |
| Total   comprehensive income                                                                                                     |       |               |       |       |       |           |       |                       |       |               |       |                         |       | 27,816 |   |
| Dividend/return   of capital to parent                                                                                           |       | —             |       | —     |       | (71,878        | )          | —                     |       | (8,122             | )          | —                       |       | (80,000 | ) |
| **Balance at March 31, 2010**                                                                                               |       | 150,000            |       | $          | 1,500      |           | $          | 226,086                    |       | $                  | 15         |                         | $          | — |   | $ | (34,587 | ) | $ | 193,014 |   |
|                                                                                                                             |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| **Balance at January 1, 2011**                                                                                              |       | 150,000            |       | $          | 1,500      |           | $          | 181,998                    |       | $                  | 15         |                         | $          | — |   | $ | (21,019 | ) | $ | 162,494 |   |
| Comprehensive   income:                                                                                                          |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| Net   income                                                                                                                     |       | —             |       | —     |       | —         |       | —                     |       | 10,599             |       | —                       |       | 10,599 |   |
| Other   comprehensive income, net of tax:                                                                                        |       |               |       |       |       |           |       |                       |       |               |       |                         |       |   |   |
| Change   in net unrealized securities losses                                                                                     |       | —             |       | —     |       | —         |       | —                     |       | —             |       | (2,258                       | )          | (2,258 | ) |
| Change   in noncredit related impairments on securities and net unrealized securities   losses on previously impaired securities |       | —             |       | —     |       | —         |       | —                     |       | —             |       | 4,200                        |       | 4,200 |   |
| Total   comprehensive income                                                                                                     |       |               |       |       |       |           |       |                       |       |               |       |                         |       | 12,541 |   |
| Dividend/return   of capital to parent                                                                                           |       | —             |       | —     |       | (9,401         | )          | —                     |       | (10,599            | )          | —                       |       | (20,000 | ) |
| **Balance at March 31, 2011**                                                                                               |       | 150,000            |       | $          | 1,500      |           | $          | 172,597                    |       | $                  | 15         |                         | $          | — |   | $ | (19,077 | ) | $ | 155,035 |   |

 

*See Notes to Consolidated Financial Statements.*

 

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**AMERIPRISE CERTIFICATE COMPANY**

** **

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

 

**1.  Basis of Presentation**

 

Ameriprise Certificate Company (“ACC” or the “Company”), is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). The accompanying Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). ACC uses the consolidation method of accounting for its wholly owned subsidiary, Investors Syndicate Development Corp. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations and financial position for the interim periods have been made. All adjustments made were of a normal, recurring nature. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Financial Statements and Notes should be read in conjunction with the Financial Statements and Notes in the Annual Report on Form 10-K of ACC for the year ended December 31, 2010, filed with the Securities and Exchange Commission (“SEC”) on February 23, 2011.

 

ACC evaluated events or transactions that occurred after the consolidated balance sheet date for potential recognition or disclosure through the date the consolidated financial statements were issued.

 

**2.  Recent Accounting Pronouncements**

 

**Adoption of New Accounting Standards**

 

*Fair Value*

 

In January 2010, the Financial Accounting Standards Board (“FASB”) updated the accounting standards related to disclosures on fair value measurements. The standard expands the current disclosure requirements to include additional detail about significant transfers between Levels 1 and 2 within the fair value hierarchy and presents activity in the rollforward of Level 3 activity on a gross basis. The standard also clarifies existing disclosure requirements related to the level of disaggregation to be used for assets and liabilities as well as disclosures on the inputs and valuation techniques used to measure fair value. The standard was effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosure requirements related to the Level 3 rollforward, which are effective for interim and annual periods beginning after December 15, 2010. ACC adopted the standard in the first quarter of 2010, except for the additional disclosures related to the Level 3 rollforward, which ACC adopted in the first quarter of 2011. The adoption did not have any effect on ACC’s consolidated results of operations and financial condition. See Note 5 for the required disclosures.

 

**Future Adoption of New Accounting Standards**

 

*Receivables*

 

In April 2011, the FASB updated the accounting standards for troubled debt restructurings. The new standard includes indicators that a lender should consider in determining whether a borrower is experiencing financial difficulties and provides clarification for determining whether the lender has granted a concession to the borrower. The standard sets the effective dates for troubled debt restructuring disclosures required by recent guidance on credit quality disclosures. The standard is effective for interim and annual periods beginning on or after June 15, 2011, and is to be applied retrospectively to modifications occurring on or after the beginning of the annual period of adoption. For purposes of measuring impairments of receivables that are considered impaired as a result of applying the new guidance, the standard should be applied prospectively for the interim or annual period beginning on or after June 15, 2011. The adoption of the standard is not expected to have a material impact on ACC’s consolidated results of operations and financial condition.

 

**3.  Investments**

 

Investments in unaffiliated issuers were as follows:

 
| ** **                                                                                                                                | ** ** | **March 31, 2011** | ** ** | **December 31, 2010** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                                                                                                                | ** ** | **(in thousands)**      | ** ** |
| Available-for-Sale:                                                                                                                       |       |                         |       |                            |       |
| Fixed maturities, at fair value (amortized cost:   2011, $2,747,054; 2010, $2,909,769)                                                    |       | $                            | 2,715,748  |                            | $          | 2,875,693 |   |
| Common and preferred stocks, at fair value (cost:   2011, $1,376; 2010, $1,376)                                                           |       | 2,716                        |       | 2,413                           |       |
| Syndicated loans and commercial mortgage loans, at   cost net of allowance for loan losses (fair value: 2011, $189,394; 2010,   $206,882) |       | 183,171                      |       | 199,040                         |       |
| Certificate loans — secured by certificate   reserves, at cost, which approximates fair value                                        |       | 3,061                        |       | 3,299                           |       |
| Real estate owned, at fair value less cost to sell                                                                                        |       | 5,186                        |       | 5,117                           |       |
| Total                                                                                                                                     |       | $                            | 2,909,882  |                            | $          | 3,085,562 |   |

 

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**AMERIPRISE CERTIFICATE COMPANY**

** **

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

 

Available-for-Sale securities distributed by type were as follows:

 
| ** **                               | ** ** | **March 31, 2011**    | ** ** |
|------------------------------------------|------------|---------------------------------|------------|
| **Description of Securities**  | ** ** | **Amortized   Cost**            | ** ** | **Gross   Unrealized   Gains** | ** ** | **Gross   Unrealized   Losses** | ** ** | **Fair Value** | ** ** | **Non-Credit   OTTI ****(1)** | ** ** |
| ** **                               | ** ** | **(in thousands)**         | ** ** | ** ** | ** ** |
| Residential mortgage backed securities   |       | $                               | 1,445,656  |   | $ | 27,597 |   | $ | (86,064 | ) | $ | 1,387,189 |   | $ | (32,181 | ) |
| Corporate debt securities                |       | 480,093                         |       | 7,356 |   | (775 | ) | 486,674 |   | 2 |   |
| Commercial mortgage backed securities    |       | 472,950                         |       | 7,588 |   | (2,027 | ) | 478,511 |   | — |   |
| Asset backed securities                  |       | 345,223                         |       | 16,445 |   | (1,541 | ) | 360,127 |   | (595 | ) |
| U.S. government and agencies obligations |       | 3,132                           |       | 115 |   | — |   | 3,247 |   | — |   |
| Common and preferred stocks              |       | 1,376                           |       | 1,374 |   | (34 | ) | 2,716 |   | — |   |
| Total                                    |       | $                               | 2,748,430  |   | $ | 60,475 |   | $ | (90,441 | ) | $ | 2,718,464 |   | $ | (32,774 | ) |
| ** **                               | ** ** | ** **                      | ** ** | ** ** | ** ** | ** ** |   |   | ** ** | ** ** | ** ** |
| ** **                               | ** ** | **December 31, 2010** | ** ** |
| **Description of Securities**  | ** ** | **Amortized   Cost**            | ** ** | **Gross   Unrealized   Gains** | ** ** | **Gross   Unrealized   Losses** | ** ** | **Fair Value** | ** ** | **Non-Credit   OTTI ****(1)** | ** ** |
| ** **                               | ** ** | **(in thousands)**         | ** ** | ** ** | ** ** |
| Residential mortgage backed securities   |       | $                               | 1,472,410  |   | $ | 30,242 |   | $ | (95,638 | ) | $ | 1,407,014 |   | $ | (38,323 | ) |
| Corporate debt securities                |       | 583,341                         |       | 8,923 |   | (1,285 | ) | 590,979 |   | 2 |   |
| Commercial mortgage backed securities    |       | 499,243                         |       | 10,121 |   | (1,773 | ) | 507,591 |   | — |   |
| Asset backed securities                  |       | 326,344                         |       | 17,117 |   | (1,939 | ) | 341,522 |   | (915 | ) |
| U.S. government and agencies obligations |       | 28,431                          |       | 156 |   | — |   | 28,587 |   | — |   |
| Common and preferred stocks              |       | 1,376                           |       | 1,056 |   | (19 | ) | 2,413 |   | — |   |
| Total                                    |       | $                               | 2,911,145  |   | $ | 67,615 |   | $ | (100,654 | ) | $ | 2,878,106 |   | $ | (39,236 | ) |

 

----

(1) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Loss. Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.

 

At March 31, 2011 and December 31, 2010, fixed maturity securities comprised approximately 87% and 88%, respectively, of ACC’s total investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”), and Fitch Ratings Ltd. (“Fitch”). ACC uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable ACC may utilize ratings from other NRSROs or rate the securities internally. At March 31, 2011 and December 31, 2010, approximately $6.1 million and $10.0 million, respectively, of securities were internally rated by Columbia Management Investment Advisers, LLC using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows:

 
| ** **             | ** ** | **March 31, 2011**                          | ** ** | **December 31, 2010** | ** ** |
|------------------------|------------|-------------------------------------------------------|------------|---------------------------------|------------|
| **Ratings**            | ** ** | **Amortized Cost**                               | ** ** | **Fair Value**             | ** ** | **Percent   of Total   Fair Value** | ** ** | **Amortized Cost** | ** ** | **Fair Value** | ** ** | **Percent   of Total   Fair Value** | ** ** |
| ** **             | ** ** | **(in thousands, except percentages)** | ** ** |
| AAA                    |       | $                                                     | 1,746,035  |                            | $          | 1,785,317 |   | 66 | % | $ | 1,799,754 |   | $ | 1,847,326 |   | 64 | % |
| AA                     |       | 89,969                                                |       | 93,591                          |       | 3 |   | 96,952 |   | 97,590 |   | 3 |   |
| A                      |       | 189,805                                               |       | 190,591                         |       | 7 |   | 180,916 |   | 180,343 |   | 6 |   |
| BBB                    |       | 413,188                                               |       | 410,149                         |       | 15 |   | 503,115 |   | 500,529 |   | 18 |   |
| Below investment grade |       | 308,057                                               |       | 236,100                         |       | 9 |   | 329,032 |   | 249,905 |   | 9 |   |
| Total fixed maturities |       | $                                                     | 2,747,054  |                            | $          | 2,715,748 |   | 100 | % | $ | 2,909,769 |   | $ | 2,875,693 |   | 100 | % |

 

At both March 31, 2011 and December 31, 2010, approximately 31%, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities.

 

8

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

The following tables provide 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:

 
| ** **                               | ** ** | **March 31, 2011**                                             | ** ** |
|------------------------------------------|------------|--------------------------------------------------------------------------|------------|
| ** **                               | ** ** | **Less than 12 months**                                   | ** ** | **12 months or more** | ** ** | **Total** | ** ** |
| ** **                               | ** ** | **Number**                                                               | ** ** | ** ** | ** ** | ** ** | ** ** | **Number** | ** ** | ** ** | ** ** | ** ** | ** ** | **Number** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Description of**                  | ** ** | **of**                                                                   | ** ** | **Fair** | ** ** | **Unrealized** | ** ** | **of** | ** ** | **Fair** | ** ** | **Unrealized** | ** ** | **of** | ** ** | **Fair** | ** ** | **Unrealized** | ** ** |
| **Securities**                           | ** ** | **Securities**                                                           | ** ** | **Value** | ** ** | **Losses** | ** ** | **Securities** | ** ** | **Value** | ** ** | **Losses** | ** ** | **Securities** | ** ** | **Value** | ** ** | **Losses** | ** ** |
| ** **                               | ** ** | **(in thousands, except number of securities)** | ** ** |
| Residential   mortgage backed securities |       | 28                                                                       |       | $ | 236,101 |   | $ | (2,669 | ) | 73 |   | $ | 280,797 |   | $ | (83,395 | ) | 101 |   | $ | 516,898 |   | $ | (86,064 | ) |
| Corporate   debt securities              |       | 9                                                                        |       | 65,283 |   | (743 | ) | 2 |   | 3,495 |   | (32 | ) | 11 |   | 68,778 |   | (775 | ) |
| Commercial   mortgage backed securities  |       | 18                                                                       |       | 159,763 |   | (2,027 | ) | — |   | — |   | — |   | 18 |   | 159,763 |   | (2,027 | ) |
| Asset   backed securities                |       | 13                                                                       |       | 78,401 |   | (1,310 | ) | 5 |   | 8,012 |   | (231 | ) | 18 |   | 86,413 |   | (1,541 | ) |
| Common   and preferred stocks            |       | 1                                                                        |       | 860 |   | (34 | ) | — |   | — |   | — |   | 1 |   | 860 |   | (34 | ) |
| Total                                    |       | 69                                                                       |       | $ | 540,408 |   | $ | (6,783 | ) | 80 |   | $ | 292,304 |   | $ | (83,658 | ) | 149 |   | $ | 832,712 |   | $ | (90,441 | ) |

 
| ** **                               | ** ** | **December 31, 2010**                                          | ** ** |
|------------------------------------------|------------|--------------------------------------------------------------------------|------------|
| ** **                               | ** ** | **Less than 12 months**                                   | ** ** | **12 months or more** | ** ** | **Total** | ** ** |
| ** **                               | ** ** | **Number**                                                               | ** ** | ** ** | ** ** | ** ** | ** ** | **Number** | ** ** | ** ** | ** ** | ** ** | ** ** | **Number** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Description of**                  | ** ** | **of**                                                                   | ** ** | **Fair** | ** ** | **Unrealized** | ** ** | **of** | ** ** | **Fair** | ** ** | **Unrealized** | ** ** | **of** | ** ** | **Fair** | ** ** | **Unrealized** | ** ** |
| **Securities**                           | ** ** | **Securities**                                                           | ** ** | **Value** | ** ** | **Losses** | ** ** | **Securities** | ** ** | **Value** | ** ** | **Losses** | ** ** | **Securities** | ** ** | **Value** | ** ** | **Losses** | ** ** |
| ** **                               | ** ** | **(in thousands, except number of securities)** | ** ** |
| Residential   mortgage backed securities |       | 20                                                                       |       | $ | 227,367 |   | $ | (1,860 | ) | 73 |   | $ | 282,836 |   | $ | (93,778 | ) | 93 |   | $ | 510,203 |   | $ | (95,638 | ) |
| Corporate   debt securities              |       | 7                                                                        |       | 64,667 |   | (1,230 | ) | 2 |   | 3,471 |   | (55 | ) | 9 |   | 68,138 |   | (1,285 | ) |
| Commercial   mortgage backed securities  |       | 16                                                                       |       | 150,294 |   | (1,773 | ) | — |   | — |   | — |   | 16 |   | 150,294 |   | (1,773 | ) |
| Asset   backed securities                |       | 11                                                                       |       | 70,519 |   | (1,402 | ) | 5 |   | 9,245 |   | (537 | ) | 16 |   | 79,764 |   | (1,939 | ) |
| Common   and preferred stocks            |       | 2                                                                        |       | 947 |   | (19 | ) | — |   | — |   | — |   | 2 |   | 947 |   | (19 | ) |
| Total                                    |       | 56                                                                       |       | $ | 513,794 |   | $ | (6,284 | ) | 80 |   | $ | 295,552 |   | $ | (94,370 | ) | 136 |   | $ | 809,346 |   | $ | (100,654 | ) |

 

As part of ACC’s ongoing monitoring process, management determined that a majority of the gross unrealized losses on its Available-for-Sale securities are attributable to movement in credit spreads.

 

The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Operations for other-than-temporary impairments related to credit losses on securities for which a portion of the securities’ total other-than-temporary impairments was recognized in other comprehensive income:

 
| ** **                                                                                                                                                                    | ** ** | **2011**                | ** ** | **2010** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|----------|------------|
| ** **                                                                                                                                                                    | ** ** | **(in thousands)** | ** ** |
| Beginning balance of credit losses on securities   held as of January 1 for which a portion of other-than-temporary impairment   was recognized in other comprehensive income |       | $                       | 59,855     |     | $          | 57,446 |   |
| Additional amount related to credit losses for   which an other-than-temporary impairment was not previously recognized                                                       |       | —                  |       | 556      |       |
| Additional increases to the amount related to   credit losses for which an other-than-temporary impairment was previously   recognized                                        |       | 89                      |       | 1,798    |       |
| Ending balance of credit losses on securities held   as of March 31 for which a portion of other-than-temporary impairment was   recognized in other comprehensive income     |       | $                       | 59,944     |     | $          | 59,800 |   |

 

The change in net unrealized securities gains (losses) in other comprehensive income includes two components, net of tax: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period and (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit other-than-temporary impairment losses to credit losses.

 

9

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

The following table presents a rollforward of the net unrealized securities losses on Available-for-Sale securities included in accumulated other comprehensive loss:

 
| ** **                                                      | ** ** | ** **              | ** ** | ** **          | ** ** | **Accumulated Other**             | ** ** |
|-----------------------------------------------------------------|------------|-------------------------|------------|---------------------|------------|----------------------------------------|------------|
| ** **                                                      | ** ** | **Net**                 | ** ** | ** **          | ** ** | **Comprehensive**                      | ** ** |
| ** **                                                      | ** ** | **Unrealized**          | ** ** | ** **          | ** ** | **Loss Related to Net** | ** ** |
| ** **                                                      | ** ** | **Investment**          | ** ** | **Deferred**        | ** ** | **Unrealized Investment**         | ** ** |
| ** **                                                      | ** ** | **Gains (Losses)** | ** ** | **Income Tax** | ** ** | **Gains (Losses)**                | ** ** |
| ** **                                                      | ** ** | **(in thousands)** | ** ** |
| Balance at January 1, 2010                                      |       | $                       | (73,860    | )                   | $          | 25,952                                 |       | $ | (47,908 | ) |
| Net unrealized securities gains arising during the   period (2) |       | 20,554                  |       | (7,223              | )          | 13,331                                 |       |
| Reclassification of gains included in net income                |       | (16                     | )          | 6                   |       | (10                                    | )          |
| Balance at March 31, 2010                                       |       | $                       | (53,322    | )                   | $          | 18,735                                 |       | $ | (34,587 | )(1) |
|                                                            |       |                    |       |                |       |                                   |       |
| Balance at January 1, 2011                                      |       | $                       | (33,039    | )                   | $          | 12,020                                 |       | $ | (21,019 | ) |
| Net unrealized securities gains arising during the   period (2) |       | 3,521                   |       | (1,287              | )          | 2,234                                  |       |
| Reclassification of gains included in net income                |       | (448                    | )          | 156                 |       | (292                                   | )          |
| Balance at March 31, 2011                                       |       | $                       | (29,966    | )                   | $          | 10,889                                 |       | $ | (19,077 | )(1) |

 

----

(1) At March 31, 2011 and 2010, Accumulated Other Comprehensive Loss Related to Net Unrealized Investment Losses included $(21.3) million and $(33.4) million, respectively, of noncredit related impairments on securities and net unrealized securities losses on previously impaired securities.

(2) Net unrealized securities gains arising during the period include other-than-temporary impairment losses on Available-for-Sale securities related to factors other than credit that were recognized in other comprehensive income during the period.

 

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

 
| ** **                       | ** ** | **Three Months Ended March 31,** | ** ** |
|----------------------------------|------------|------------------------------------------------------|------------|
| ** **                       | ** ** | **2011**                                             | ** ** | **2010** | ** ** |
| ** **                       | ** ** | **(in thousands)**                              | ** ** |
| Gross realized gains from sales  |       | $                                                    | 549        |   | $ | 2,715 |   |
| Gross realized losses from sales |       | (12                                                  | )          | (129 | ) |
| Other-than-temporary impairments |       | (89                                                  | )          | (2,570 | ) |
|                                  |            |                                                      |            |  |  |  |  |

 

The other-than-temporary impairments for the three months ended March 31, 2011 and 2010 primarily related to credit losses on non-agency residential mortgage backed securities.

 

Available-for-Sale securities by contractual maturity as of March 31, 2011 were as follows:

 
| ** **                             | ** ** | **Amortized Cost** | ** ** | **Fair Value** | ** ** |
|----------------------------------------|------------|-------------------------|------------|---------------------|------------|
| ** **                             | ** ** | **(in thousands)** | ** ** |
| Due within one year                    |       | $                       | 147,503    |                | $          | 149,209 |   |
| Due after one year through five years  |       | 334,193                 |       | 339,131             |       |
| Due after five years through 10 years  |       | 1,314                   |       | 1,356               |       |
| Due after 10 years                     |       | 215                     |       | 225                 |       |
|                                   |       | 483,225                 |       | 489,921             |       |
| Residential mortgage backed securities |       | 1,445,656               |       | 1,387,189           |       |
| Commercial mortgage backed securities  |       | 472,950                 |       | 478,511             |       |
| Asset backed securities                |       | 345,223                 |       | 360,127             |       |
| Common and preferred stocks            |       | 1,376                   |       | 2,716               |       |
| Total                                  |       | $                       | 2,748,430  |                | $          | 2,718,464 |   |

 

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities, as well as common and preferred stocks, were not included in the maturities distribution.

 

10

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

**4.  Financing Receivables**

 

ACC’s financing receivables include commercial mortgage loans, syndicated loans and certificate loans. ACC does not hold any loans acquired with deteriorated credit quality.

 

The following table presents a rollforward of the allowance for loan losses and the ending balance in the allowance for loan losses by impairment method and type of loan:

 
| ** **                                              | ** ** | **March 31, 2011** | ** ** |
|---------------------------------------------------------|------------|------------------------------|------------|
| ** **                                              | ** ** | **Commercial**               | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **Mortgage Loans**      | ** ** | **Syndicated Loans** | ** ** | **Total** | ** ** |
| ** **                                              | ** ** | **(in thousands)**      | ** ** |
| Beginning balance                                       |       | $                            | 2,576      |   | $ | 5,281 |   | $ | 7,857 |   |
| Charge-offs                                             |       | —                       |       | (204 | ) | (204 | ) |
| Provisions                                              |       | —                       |       | (1,000 | ) | (1,000 | ) |
| Ending balance                                          |       | $                            | 2,576      |   | $ | 4,077 |   | $ | 6,653 |   |
|                                                    |       |                         |       |   |   |   |   |
| Ending balance: Individually evaluated for   impairment |       | $                            | 1,000      |   | $ | 669 |   | $ | 1,669 |   |
| Ending balance: Collectively evaluated for   impairment |       | 1,576                        |       | 3,408 |   | 4,984 |   |

 
| ** **                                              | ** ** | **March 31, 2010** | ** ** |
|---------------------------------------------------------|------------|------------------------------|------------|
| ** **                                              | ** ** | **Commercial**               | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **Mortgage Loans**      | ** ** | **Syndicated Loans** | ** ** | **Total** | ** ** |
| ** **                                              | ** ** | **(in thousands)**      | ** ** |
| Beginning balance                                       |       | $                            | 1,497      |   | $ | 14,104 |   | $ | 15,601 |   |
| Charge-offs                                             |       | —                       |       | — |   | — |   |
| Provisions                                              |       | 1,079                        |       | (5,200 | ) | (4,121 | ) |
| Ending balance                                          |       | $                            | 2,576      |   | $ | 8,904 |   | $ | 11,480 |   |
|                                                    |       |                         |       |   |   |   |   |
| Ending balance: Individually evaluated for   impairment |       | $                            | —     |   | $ | 669 |   | $ | 669 |   |
| Ending balance: Collectively evaluated for   impairment |       | 2,576                        |       | 8,235 |   | 10,811 |   |

 

The recorded investment in financing receivables by impairment method and type of loan was as follows:

 
| ** **                                              | ** ** | **March 31, 2011** | ** ** |
|---------------------------------------------------------|------------|------------------------------|------------|
| ** **                                              | ** ** | **Commercial**               | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **Mortgage Loans**      | ** ** | **Syndicated Loans** | ** ** | **Total** | ** ** |
| ** **                                              | ** ** | **(in thousands)**      | ** ** |
| Ending balance: Individually evaluated for   impairment |       | $                            | 3,715      |   | $ | 1,106 |   | $ | 4,821 |   |
| Ending balance: Collectively evaluated for   impairment |       | 100,168                      |       | 84,835 |   | 185,003 |   |
| Ending balance                                          |       | $                            | 103,883    |   | $ | 85,941 |   | $ | 189,824 |   |

 
| ** **                                              | ** ** | **December 31, 2010** | ** ** |
|---------------------------------------------------------|------------|---------------------------------|------------|
| ** **                                              | ** ** | **Commercial**                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                              | ** ** | **Mortgage Loans**         | ** ** | **Syndicated Loans** | ** ** | **Total** | ** ** |
| ** **                                              | ** ** | **(in thousands)**         | ** ** |
| Ending balance: Individually evaluated for   impairment |       | $                               | —     |   | $ | 1,106 |   | $ | 1,106 |   |
| Ending balance: Collectively evaluated for   impairment |       | 109,641                         |       | 96,150 |   | 205,791 |   |
| Ending balance                                          |       | $                               | 109,641    |   | $ | 97,256 |   | $ | 206,897 |   |

 

As of both March 31, 2011 and December 31, 2010, ACC had no recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses. Unearned income, unamortized premiums and discounts, and net unamortized deferred fees and costs are not material to ACC’s total loan balance. During the three months ended March 31, 2011 and 2010, ACC sold $0.1 million and $2.0 million of syndicated loans, respectively. There were no significant purchases of financing receivables during the three months ended March 31, 2011 or 2010.

 

11

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

**Credit Quality Information**

 

Nonperforming loans are generally loans 90 days or more past due. All nonperforming loans as of March 31, 2011 and December 31, 2010 were syndicated loans. All other loans were considered to be performing.

 

*Commercial Mortgage Loans*

 

ACC reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Based on this review the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercial mortgage loans which management had assigned its highest risk rating were 3.6% and nil as of March 31, 2011 and December 31, 2010, respectively. Loans with the highest risk rating represent distressed loans which ACC identifies as impaired or expects to become delinquent or enter into foreclosure in the next six months. In addition, ACC reviews the concentrations of credit risk by region and property type.

 

Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:

 
| ** **                      | ** ** | **Loans**                 | ** ** | **Percentage**               | ** ** |
|---------------------------------|------------|---------------------------|------------|------------------------------|------------|
| ** **                      | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** |
| ** **                      | ** ** | **(in thousands)**   | ** ** | ** **                   | ** ** | ** ** | ** ** |
| East North Central              |       | $                         | 1,727      |                         | $          | 1,737 |   | 2 | % | 2 | % |
| Middle Atlantic                 |       | 3,329                     |       | 3,365                        |       | 3 |   | 3 |   |
| Mountain                        |       | 12,247                    |       | 14,762                       |       | 12 |   | 13 |   |
| New England                     |       | 8,791                     |       | 8,843                        |       | 8 |   | 8 |   |
| Pacific                         |       | 11,252                    |       | 11,447                       |       | 11 |   | 10 |   |
| South Atlantic                  |       | 33,946                    |       | 34,591                       |       | 33 |   | 32 |   |
| West North Central              |       | 20,835                    |       | 19,616                       |       | 20 |   | 18 |   |
| West South Central              |       | 11,756                    |       | 15,280                       |       | 11 |   | 14 |   |
|                            |       | 103,883                   |       | 109,641                      |       | 100 | % | 100 | % |
| Less: allowance for loan losses |       | (2,576                    | )          | (2,576                       | )          |   |   |   |   |
| Total                           |       | $                         | 101,307    |                         | $          | 107,065 |   |   |   |   |   |

 

Concentrations of credit risk of commercial mortgage loans by property type were as follows:

 
| ** **                      | ** ** | **Loans**                 | ** ** | **Percentage**               | ** ** |
|---------------------------------|------------|---------------------------|------------|------------------------------|------------|
| ** **                      | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** |
| ** **                      | ** ** | **(in thousands)**   | ** ** | ** **                   | ** ** | ** ** | ** ** |
| Apartments                      |       | $                         | 26,462     |                         | $          | 25,258 |   | 25 | % | 23 | % |
| Industrial                      |       | 18,701                    |       | 18,990                       |       | 18 |   | 17 |   |
| Office                          |       | 18,357                    |       | 21,879                       |       | 18 |   | 20 |   |
| Retail                          |       | 20,418                    |       | 23,211                       |       | 20 |   | 21 |   |
| Other                           |       | 19,945                    |       | 20,303                       |       | 19 |   | 19 |   |
|                            |       | 103,883                   |       | 109,641                      |       | 100 | % | 100 | % |
| Less: allowance for loan losses |       | (2,576                    | )          | (2,576                       | )          |   |   |   |   |
| Total                           |       | $                         | 101,307    |                         | $          | 107,065 |   |   |   |   |   |

 

*Syndicated Loans*

 

The primary credit indicator for syndicated loans is whether the loans are performing in accordance with the contractual terms of the syndication. The total nonperforming syndicated loans as of March 31, 2011 and December 31, 2010 were $1.6 million and $1.9 million, respectively.

 

12

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

**5.  Fair Values of Assets and Liabilities**

 

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.

 

**Valuation Hierarchy**

 

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

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

 

**Determination of Fair Value**

 

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

 

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

 

*Cash Equivalents*

 

Cash equivalents include highly liquid investments with original maturities of 90 days or less. ACC’s cash equivalents are classified as Level 2 and are measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

 

*Investments in Unaffiliated Issuers (Available-for-Sale Securities)*

 

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, broker quotes, or other model-based valuation techniques. Level 1 securities primarily include U.S. Treasuries and common and preferred stocks. Level 2 securities include agency mortgage backed securities, commercial mortgage backed securities, asset backed securities, municipal and corporate bonds, U.S. agency securities and common and preferred stock. The fair value of these Level 2 securities is based on a market approach with prices obtained from nationally-recognized pricing services. Observable inputs used to value these securities can include: reported trades, benchmark yields, issuer spreads and broker/dealer quotes. Level 3 securities primarily include asset backed securities, commercial mortgage backed securities, corporate bonds, non-agency residential mortgage backed securities and common and preferred stocks. The fair value of these Level 3 securities is typically based on a single broker quote, except for the valuation of non-agency residential mortgage backed securities. ACC uses prices from nationally-recognized pricing services to determine the fair value of non-agency residential mortgage backed securities. ACC continues to classify its non-agency residential mortgage backed securities as Level 3 because ACC believes the market for these securities is still inactive and their valuation includes significant unobservable inputs.

 

*Derivatives (Equity Derivatives, Purchased and Written)*

 

The fair values of derivatives that are traded in less active over-the-counter markets are generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy.

 

13

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

*Certificate Reserves*

 

ACC uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates. The inputs to these calculations are primarily market observable and include interest rates, volatilities, and equity index levels. As a result, these measurements are classified as Level 2.

 

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis:

 
| ** **                               | ** ** | **March 31, 2011** | ** ** |
|------------------------------------------|------------|------------------------------|------------|
| ** **                               | ** ** | **Level 1**             | ** ** | **Level 2** | ** ** | **Level 3** | ** ** | **Total** | ** ** |
| ** **                               | ** ** | **(in thousands)**      | ** ** |
| Assets                                   |       |                         |       |   |   |   |   |   |   |
| Cash equivalents                         |       | $                            | —     |   | $ | 215,892 |   | $ | — |   | $ | 215,892 |   |
| Available-for-Sale securities:           |       |                         |       |   |   |   |   |   |   |
| Residential mortgage backed securities   |       | —                       |       | 491,386 |   | 895,803 |   | 1,387,189 |   |
| Corporate debt securities                |       | —                       |       | 482,803 |   | 3,871 |   | 486,674 |   |
| Commercial mortgage backed securities    |       | —                       |       | 466,011 |   | 12,500 |   | 478,511 |   |
| Asset backed securities                  |       | —                       |       | 252,036 |   | 108,091 |   | 360,127 |   |
| U.S. government and agencies obligations |       | 408                          |       | 2,839 |   | — |   | 3,247 |   |
| Common and preferred stocks              |       | 650                          |       | 1,699 |   | 367 |   | 2,716 |   |
| Total Available-for-Sale securities      |       | 1,058                        |       | 1,696,774 |   | 1,020,632 |   | 2,718,464 |   |
| Equity derivatives, purchased            |       | —                       |       | 97,219 |   | 6 |   | 97,225 |   |
| Total assets at fair value               |       | $                            | 1,058      |   | $ | 2,009,885 |   | $ | 1,020,638 |   | $ | 3,031,581 |   |
|                                     |       |                         |       |   |   |   |   |   |   |
| Liabilities                              | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Certificate reserves                     |       | $                            | —     |   | $ | 12,101 |   | $ | — |   | $ | 12,101 |   |
| Equity derivatives, written              |       | —                       |       | 84,923 |   | — |   | 84,923 |   |
| Total liabilities at fair value          |       | $                            | —     |   | $ | 97,024 |   | $ | — |   | $ | 97,024 |   |

 
| ** **                               | ** ** | **December 31, 2010** | ** ** |
|------------------------------------------|------------|---------------------------------|------------|
| ** **                               | ** ** | **Level 1**                | ** ** | **Level 2** | ** ** | **Level 3** | ** ** | **Total** | ** ** |
| ** **                               | ** ** | **(in thousands)**         | ** ** |
| Assets                                   |       |                            |       |   |   |   |   |   |   |
| Cash equivalents                         |       | $                               | —     |   | $ | 182,192 |   | $ | — |   | $ | 182,192 |   |
| Available-for-Sale securities:           |       |                            |       |   |   |   |   |   |   |
| Residential mortgage backed securities   |       | —                          |       | 504,155 |   | 902,859 |   | 1,407,014 |   |
| Corporate debt securities                |       | —                          |       | 583,443 |   | 7,536 |   | 590,979 |   |
| Commercial mortgage backed securities    |       | —                          |       | 497,402 |   | 10,189 |   | 507,591 |   |
| Asset backed securities                  |       | —                          |       | 239,850 |   | 101,672 |   | 341,522 |   |
| U.S. government and agencies obligations |       | 414                             |       | 28,173 |   | — |   | 28,587 |   |
| Common and preferred stocks              |       | 570                             |       | 1,499 |   | 344 |   | 2,413 |   |
| Total Available-for-Sale securities      |       | 984                             |       | 1,854,522 |   | 1,022,600 |   | 2,878,106 |   |
| Equity derivatives, purchased            |       | —                          |       | 89,008 |   | 6 |   | 89,014 |   |
| Total assets at fair value               |       | $                               | 984        |   | $ | 2,125,722 |   | $ | 1,022,606 |   | $ | 3,149,312 |   |
|                                     |       |                            |       |   |   |   |   |   |   |
| Liabilities                              | ** ** | ** **                      | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Certificate reserves                     |       | $                               | —     |   | $ | 13,692 |   | $ | — |   | $ | 13,692 |   |
| Equity derivatives, written              |       | —                          |       | 75,201 |   | — |   | 75,201 |   |
| Total liabilities at fair value          |       | $                               | —     |   | $ | 88,893 |   | $ | — |   | $ | 88,893 |   |

 

14

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis:

 
| ** **                                                                                                | ** ** | **Available-for-Sale Securities** | ** ** | ** **     | ** ** | ** **     | ** ** |
|-----------------------------------------------------------------------------------------------------------|------------|----------------------------------------|------------|----------------|------------|----------------|------------|
| ** **                                                                                                | ** ** | **Residential**                        | ** ** | ** **     | ** ** | **Commercial** | ** ** | ** ** | ** ** | **Common** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Mortgage**                           | ** ** | **Corporate**  | ** ** | **Mortgage**   | ** ** | **Asset** | ** ** | **and** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Backed**                             | ** ** | **Debt**       | ** ** | **Backed**     | ** ** | **Backed** | ** ** | **Preferred** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Securities**                         | ** ** | **Securities** | ** ** | **Securities** | ** ** | **Securities** | ** ** | **Stocks** | ** ** | **Derivatives** | ** ** | **Total** | ** ** |
| ** **                                                                                                | ** ** | **(in thousands)**                | ** ** |
|                                                                                                      |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Balance, January 1, 2011                                                                             |       | $                                      | 902,859    |           | $          | 7,536          |       | $ | 10,189 |   | $ | 101,672 |   | $ | 344 |   | $ | 6 |   | $ | 1,022,606 |   |
| Total gains (losses) included in:                                                                         |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Net income                                                                                                |       | 263                                    | (1)        | —         |       | —         |       | 906 | (2) | — |   | — |   | 1,169 |   |
| Other comprehensive income                                                                                |       | 8,220                                  |       | (67            | )          | (8             | )          | 231 |   | 23 |   | — |   | 8,399 |   |
| Purchases                                                                                                 |       | 69,704                                 |       | —         |       | 12,508         |       | 14,999 |   | — |   | — |   | 97,211 |   |
| Sales                                                                                                     |       | (20                                    | )          | —         |       | —         |       | — |   | — |   | — |   | (20 | ) |
| Settlements                                                                                               |       | (85,223                                | )          | (3,598         | )          | —         |       | (9,717 | ) | — |   | — |   | (98,538 | ) |
| Transfers in to (out of) of Level 3                                                                       |       | —                                 |       | —         |       | (10,189        | )(3)       | — |   | — |   | — |   | (10,189 | ) |
| Balance, March 31, 2011                                                                              |       | $                                      | 895,803    |           | $          | 3,871          |       | $ | 12,500 |   | $ | 108,091 |   | $ | 367 |   | $ | 6 |   | $ | 1,020,638 |   |
|                                                                                                      |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Change in unrealized gains included in net income   related to Level 3 assets held at March 31, 2011 |       | $                                      | 263        | (1)            | $          | —         |       | $ | — |   | $ | 906 | (2) | $ | — |   | $ | — |   | $ | 1,169 |   |

 

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(1) Represents a $(89) loss included in net realized gain on investments and $352 included in investment income in the Consolidated Statements of Operations.

(2) Included in investment income in the Consolidated Statements of Operations.

(3) Represents one security that was transferred to Level 2 as the fair value is now obtained from a nationally-recognized pricing service with observable inputs.

 
| ** **                                                                                                | ** ** | **Available-for-Sale Securities** | ** ** | ** **     | ** ** | ** **     | ** ** |
|-----------------------------------------------------------------------------------------------------------|------------|----------------------------------------|------------|----------------|------------|----------------|------------|
| ** **                                                                                                | ** ** | **Residential**                        | ** ** | ** **     | ** ** | **Commercial** | ** ** | ** ** | ** ** | **Common** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Mortgage**                           | ** ** | **Corporate**  | ** ** | **Mortgage**   | ** ** | **Asset** | ** ** | **and** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Backed**                             | ** ** | **Debt**       | ** ** | **Backed**     | ** ** | **Backed** | ** ** | **Preferred** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                                | ** ** | **Securities**                         | ** ** | **Securities** | ** ** | **Securities** | ** ** | **Securities** | ** ** | **Stocks** | ** ** | **Derivatives** | ** ** | **Total** | ** ** |
| ** **                                                                                                | ** ** | **(in thousands)**                | ** ** |
|                                                                                                      |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Balance, January 1, 2010                                                                             |       | $                                      | 745,633    |           | $          | 12,104         |       | $ | — |   | $ | 130,584 |   | $ | — |   | $ | — |   | $ | 888,321 |   |
| Total gains (losses) included in:                                                                         |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Net income                                                                                                |       | (848                                   | )(1)       | —         |       | —         |       | 887 | (2) | — |   | — |   | 39 |   |
| Other comprehensive income                                                                                |       | 13,591                                 |       | (17            | )          | —         |       | 6,034 |   | — |   | — |   | 19,608 |   |
| Purchases, sales, issuances and settlements, net                                                          |       | (54,985                                | )          | (3,399         | )          | —         |       | (10,486 | ) | — |   | — |   | (68,870 | ) |
| Transfers in to (out of) of Level 3                                                                       |       | —                                 |       | —         |       | —         |       | — |   | — |   | — |   | — |   |
| Balance, March 31, 2010                                                                              |       | $                                      | 703,391    |           | $          | 8,688          |       | $ | — |   | $ | 127,019 |   | $ | — |   | $ | — |   | $ | 839,098 |   |
|                                                                                                      |       |                                   |       |           |       |           |       |   |   |   |   |   |   |   |   |
| Change in unrealized gains included in net income   related to Level 3 assets held at March 31, 2010 |       | $                                      | (848       | )(1)           | $          | —         |       | $ | — |   | $ | 887 | (2) | $ | — |   | $ | — |   | $ | 39 |   |

 

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(1) Represents a $(2,066) loss included in net realized gain on investments and $1,218 included in investment income in the Consolidated Statements of Operations.

(2) Represents a $(289) loss included in net realized gain on investments and $1,176 included in investment income in the Consolidated Statements of Operations.

 

ACC recognizes transfers between levels of the fair value hierarchy as of the beginning of the quarter in which each transfer occurred.

 

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

 

15

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

The following table provides the carrying value and the estimated fair value of financial instruments that are not reported at fair value. All other financial instruments that are reported at fair value have been included above in the table with balances of assets and liabilities measured at fair value on a recurring basis.

 
| ** **                | ** ** | **March 31, 2011** | ** ** | **December 31, 2010** | ** ** |
|---------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                | ** ** | **Carrying Value**      | ** ** | **Fair Value**             | ** ** | **Carrying Value** | ** ** | **Fair Value** | ** ** |
| ** **                | ** ** | **(in thousands)**      | ** ** |
| **Financial Assets**      |       |                         |       |                            |       |   |   |   |   |
| Syndicated loans          |       | $                            | 81,864     |                            | $          | 83,230 |   | $ | 91,975 |   | $ | 93,518 |   |
| Commercial mortgage loans |       | 101,307                      |       | 106,164                         |       | 107,065 |   | 113,364 |   |
| Certificate loans         |       | 3,061                        |       | 3,061                           |       | 3,299 |   | 3,299 |   |
|                      |       |                         |       |                            |       |   |   |   |   |
| **Financial Liabilities** |       |                         |       |                            |       |   |   |   |   |
| Certificate reserves      |       | $                            | 3,004,596  |                            | $          | 2,988,759 |   | $ | 3,146,139 |   | $ | 3,128,694 |   |

 

The fair value of syndicated loans is obtained from a nationally-recognized pricing service.

 

The fair value of commercial mortgage loans, except those with significant credit deterioration, has been determined by discounting contractual cash flows using discount rates that reflect current pricing for loans with similar remaining maturities and characteristics including loan-to-value ratio, occupancy rate, refinance risk, debt-service coverage, location, and property condition. For commercial mortgage loans with significant credit deterioration, fair value is determined using the same adjustments as above with an additional adjustment for ACC’s estimate of the amount recoverable on the loan.

 

The fair value of investment certificate reserves is determined by discounting cash flows using discount rates that reflect current pricing for assets with similar terms and characteristics, with adjustments for early withdrawal behavior, penalty fees, expense margin and ACC’s nonperformance risk specific to these liabilities.

 

**6.  Derivatives and Hedging Activities**

 

Derivative instruments enable ACC to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. ACC primarily enters into derivative agreements for risk management purposes related to ACC’s products.

 

ACC uses derivatives as economic hedges of equity and interest rate risk related to stock market certificates. ACC does not designate any derivatives for hedge accounting. The following table presents the balance sheet location and the gross fair value of derivative instruments, including embedded derivatives, by type of derivative and product:

 
| ** **                                                                  | ** ** | ** **                        | ** ** | **Asset**                 | ** ** | ** **                   | ** ** | **Liability**                     | ** ** |
|-----------------------------------------------------------------------------|------------|-----------------------------------|------------|---------------------------|------------|------------------------------|------------|-----------------------------------|------------|
| **Derivatives not designated as   hedging instruments** | ** ** | **Balance Sheet   Location** | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** | **Balance Sheet   Location** | ** ** | **March 31,   2011** | ** ** | **December 31,   2010** | ** ** |
| ** **                                                                  | ** ** | ** **                        | ** ** | **(in thousands)**   | ** ** | ** **                   | ** ** | **(in thousands)**           | ** ** |
| **Equity**                                                                  |       |                              |       |                      |       |                         |       |                              |       |   |   |   |   |
| Stock market certificates                                                   |       | Equity   derivatives, purchased   |       | $                         | 96,732     |                         | $          | 88,590                            |       | Equity   derivatives, written |   | $ | 84,923 |   | $ | 75,201 |   |
| Equity warrants                                                             |       | Equity   derivatives, purchased   |       | 493                       |       | 424                          |       | Equity   derivatives, written     |       | — |   | — |   |
| Stock market certificates embedded derivatives                              |       |                              |       | —                    |       | —                       |       | Certificate   reserves            |       | 12,101 |   | 13,692 |   |
| Total                                                                       |       |                              |       | $                         | 97,225     |                         | $          | 89,014                            |       |   |   | $ | 97,024 |   | $ | 88,893 |   |

 

See Note 5 for additional information regarding ACC’s fair value measurement of derivative instruments.

 

16

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

The following table presents a summary of the impact of derivatives not designated as hedging instruments on the Consolidated Statements of Operations for the three months ended March 31:

 
| ** **                                       | ** ** | ** **                                          | ** ** | **Amount of Gain (Loss) on**    | ** ** |
|--------------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------|------------|
| **Derivatives Not Designated as** | ** ** | **Location of Gain (Loss) on**  | ** ** | **Derivatives Recognized in Income** | ** ** |
| **Hedging Instruments**                     | ** ** | **Derivatives Recognized in Income** | ** ** | **2011**                                            | ** ** | **2010** | ** ** |
| ** **                                       | ** ** | ** **                                          | ** ** | **(in thousands)**                             | ** ** |
| **Equity**                                       |       |                                                |       |                                                |       |   |   |
| Stock market certificates                        |       | Net   provision for certificate reserves            |       | $                                                   | 2,573      |   | $ | 2,970 |   |
| Equity warrants                                  |       | Investment   income                                 |       | 68                                                  |       | — |   |
| Stock market certificates embedded derivatives   |       | Net   provision for certificate reserves            |       | (2,796                                              | )          | (3,027 | ) |
| Total                                            |       |                                                |       | $                                                   | (155       | ) | $ | (57 | ) |

 

Ameriprise Stock Market Certificates (“SMC”) 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. The equity based return of the certificate 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 the SMC product 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 S&P 500 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 gross notional amount of these derivative contracts was $1.3 billion and $1.4 billion at March 31, 2011 and December 31, 2010, respectively. ACC also purchases futures on the S&P 500 Index to economically hedge its obligations. The futures are marked-to-market daily and exchange traded, exposing ACC to no counterparty risk. The gross notional amount of these derivative contracts was $0.3 million at both March 31, 2011 and December 31, 2010.

 

Equity warrants were received as part of a syndicated loan restructure and do not constitute a hedge of underlying assets or liabilities.

 

**Credit Risk**

 

Credit risk associated with ACC’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, ACC has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting arrangements and collateral arrangements whenever practical. As of March 31, 2011 and December 31, 2010, ACC held $6.2 million and $4.6 million, respectively, in cash and recorded a corresponding liability in other liabilities for collateral ACC is obligated to return to counterparties. As of March 31, 2011 and December 31, 2010, ACC’s maximum credit exposure related to derivative assets after considering netting arrangements with counterparties and collateral arrangements was approximately $5.7 million and $8.9 million, respectively.

 

**7.  Contingencies**

 

ACC is not aware that it is a party to any pending legal, arbitration, or regulatory proceeding that is likely to have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Notwithstanding the foregoing, it is possible that the outcome of any current or future legal, arbitration or regulatory proceeding could have a material adverse effect on the consolidated results of operations in any particular reporting period as the proceedings are resolved.

 

17

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Table of Contents

 

**AMERIPRISE CERTIFICATE COMPANY**

 

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

 

**8.  Income Taxes**

 

The effective tax rate was 37.1% and 36.3% for the three months ended March 31, 2011 and 2010, respectively.

 

ACC is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized.  Included in deferred income tax assets are a significant deferred tax asset relating to capital losses that have been recognized for financial statement purposes but not yet for tax return purposes and future deductible capital losses realized for tax return purposes.  Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes.  Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required.  Factors used in making this determination include estimates relating to the performance of the business including the ability to generate capital gains.  Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies.  Based on analysis of ACC’s tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will generate sufficient taxable income to enable the Company to utilize all of its deferred tax assets.  Accordingly, no valuation allowance for deferred tax assets has been established as of March 31, 2011 and December 31, 2010.

 

As of March 31, 2011 and December 31, 2010, ACC had $2 million and nil, respectively, of gross unrecognized tax benefits. If recognized, it is unlikely that there would be any effect on the effective tax rate, net of federal tax benefits, of the unrecognized tax benefits as of March 31, 2011 and December 31, 2010.

 

ACC recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. ACC did not recognize any interest for the three months ended March 31, 2011. ACC had no accrual for the payment of interest and penalties at March 31, 2011 and December 31, 2010.

 

It is reasonably possible that the total amounts of unrecognized tax benefits will change in the next 12 months.  Based on the current audit position of ACC, it is estimated that the total amount of gross unrecognized tax benefits may decrease by $2 million in the next 12 months.

 

ACC files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, ACC is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 1997. The Internal Revenue Service (“IRS”), completed its field examination of ACC’s U.S. income tax returns for 2005 through 2007 during the third and fourth quarters of 2010. The IRS had previously completed its field examination of the 1997 through 2004 tax returns in recent years as part of the overall examination of the American Express Company consolidated returns. However, for federal income tax purposes these years continue to remain open as a consequence of certain issues under appeal.  In the fourth quarter of 2010, the IRS commenced an examination of ACC’s U.S. income tax returns for 2008 and 2009. ACC’s or its subsidiary’s state income tax returns are currently under examination by various jurisdictions for years ranging from 1998 through 2008.

 

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**ITEM 2.  MANAGEMENT’S NARRATIVE ANALYSIS**

 

The following information should be read in conjunction with Ameriprise Certificate Company’s (“ACC”) Financial Statements and related notes presented in Part I, Item 1. This discussion may contain forward-looking statements that reflect ACC’s plans, estimates and beliefs. 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 under “Forward-Looking Statements.” ACC believes it is useful to read its management’s narrative analysis in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission (“SEC”) on February 23, 2011 (“2010 10-K”), as well as its current reports on Form 8-K and other publicly available information.

 

ACC is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). ACC is registered as an investment company under the Investment Company Act of 1940 and is in the business of issuing face-amount investment certificates. Face-amount investment 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., an affiliate of ACC. Ameriprise Financial Services, Inc. is registered as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico. ACC’s investment portfolio is managed by Columbia Management Investment Advisers, LLC (“CMIA”), a wholly owned subsidiary of Ameriprise Financial.

 

ACC’s future profitability is dependent upon changes in the economic, credit and equity environments, as well as the competitive environment. Ameriprise Financial and unaffiliated third parties offer certain competing products which have demonstrated strong appeal to investors.

 

Management’s narrative analysis of the results of operations is presented in lieu of management’s discussion and analysis of financial condition and results of operations, pursuant to General Instructions H(2)(a) of Form 10-Q.

 

**Critical Accounting Policies**

 

ACC’s critical accounting policies are discussed in detail in “Management’s Narrative Analysis — Critical Accounting Policies” in its 2010 10-K.

 

**Recent Accounting Pronouncements**

 

For information regarding recent accounting pronouncements and their expected impact on ACC’s future results of operations or financial condition, see Note 2 to the consolidated financial statements.

 

**Results of Operations for the Three Months Ended March 31, 2011 and 2010**

 

Net income for the three months ended March 31, 2011 was $10.6 million compared to $14.5 million for the three months ended March 31, 2010, a decrease of $3.9 million, primarily due to a decrease in investment income as a result of lower investment balances partially offset by decreases in investment expenses and the provision for certificate reserves.

 

Investment income decreased $13.4 million, or 30.2%, to $31.0 million for the three months ended March 31, 2011 compared to $44.5 million for the prior year period. This decrease is primarily the result of lower investment balances due to net outflows of certificates driven by lower interest crediting rates, as well as lower average yields on invested assets.

 

Investment expenses decreased $1.6 million, or 18.4%, to $7.0 million for the three months ended March 31, 2011 compared to $8.5 million for the prior year period. This decrease is due to lower distribution fees and investment advisory and services fees as a result of lower certificate reserve balances in the first quarter of 2011 compared to the prior year period.

 

The net provision for certificate reserves decreased $8.3 million, or 49.0%, to $8.7 million for the three months ended March 31, 2011 compared to $17.0 million for the prior year period. This decrease is a result of lower certificate balances primarily driven by client outflows and lower interest crediting rates compared to the prior year period.

 

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Net realized gain on investments was $1.4 million for the three months ended March 31, 2011 compared to $3.8 million for the prior year period. Included in net realized investment gains for the three months ended March 31, 2011 was a $1.0 million decrease in the syndicated loans reserve primarily due to improvement of underlying credit compared to a $5.2 million decrease in the syndicated loans reserve for the prior year period. For the three months ended March 31, 2011, net realized gain on investments also included net gains on the sale of corporate securities. For the three months ended March 31, 2010, the decrease in the syndicated loans reserve was partially offset by an increase in the commercial mortgage loan reserve and other-than-temporary impairment losses on non-agency residential mortgage backed securities.

 

The effective tax rate was 37.1% for the three months ended March 31, 2011 compared to 36.3% for the three months ended March 31, 2010.

 

**Fair Value Measurements**

 

ACC reports certain assets and liabilities at fair value; specifically derivatives, embedded derivatives, and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions. Companies are not permitted to use market prices that are the result of a forced liquidation or distressed sale. ACC includes actual market price or observable inputs in its fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. ACC validates prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors.

 

*Non-agency Residential Mortgage Backed and Asset Backed Securities Backed by Subprime, Alt-A or Prime Collateral*

 

Subprime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles. Alt-A mortgage lending is the origination of residential mortgage loans to customers who have credit ratings above subprime but may not conform to government-sponsored standards. Prime mortgage lending is the origination of residential mortgage loans to customers with good credit profiles. ACC has exposure to these types of loans predominantly through mortgage backed and asset backed securities. The slowdown in the U.S. housing market, combined with relaxed underwriting standards by some originators, has led to higher delinquency and loss rates for some of these investments. Market conditions have increased the likelihood of other-than-temporary impairments for certain non-agency residential mortgage backed securities. As a part of ACC’s risk management process, an internal rating system is used in conjunction with market data as the basis for analysis to assess the likelihood that ACC will not receive all contractual principal and interest payments for these investments. For the investments that are more at risk for impairment, ACC performs its own assessment of projected cash flows incorporating assumptions about default rates, prepayment speeds, loss severity, and geographic concentrations to determine if an other-than-temporary impairment should be recognized.

 

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The following table presents as of March 31, 2011, ACC’s non-agency residential mortgage backed and asset backed securities backed by subprime, Alt-A or prime mortgage loans by credit rating and vintage year (in thousands):

 
| ** **            | ** ** | **AAA**       | ** ** | **AA**     | ** ** | **A**         | ** ** | **BBB**    | ** ** | **BB & Below** | ** ** | **Total**  | ** ** |
|-----------------------|------------|---------------|------------|------------|------------|---------------|------------|------------|------------|------------------------------|------------|------------|------------|
| ** **            | ** ** | **Amortized** | ** ** | **Fair**   | ** ** | **Amortized** | ** ** | **Fair**   | ** ** | **Amortized**                | ** ** | **Fair**   | ** ** | **Amortized** | ** ** | **Fair** | ** ** | **Amortized** | ** ** | **Fair** | ** ** | **Amortized** | ** ** | **Fair** | ** ** |
| ** **            | ** ** | **Cost**      | ** ** | **Value**  | ** ** | **Cost**      | ** ** | **Value**  | ** ** | **Cost**                     | ** ** | **Value**  | ** ** | **Cost** | ** ** | **Value** | ** ** | **Cost** | ** ** | **Value** | ** ** | **Cost** | ** ** | **Value** | ** ** |
| **Subprime**          | ** ** | ** **    | ** ** | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 2003 & prior |       | $             | 6,381      |       | $          | 6,323         |       | $          | —     |                         | $          | —     |       | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 6,381 |   | $ | 6,323 |   |
| 2004                  |       | 8,031         |       | 7,909      |       | —        |       | —     |       | 5,859                        |       | 5,698      |       | — |   | — |   | 7,985 |   | 7,389 |   | 21,875 |   | 20,996 |   |
| 2005                  |       | 5,315         |       | 5,472      |       | 20,602        |       | 22,647     |       | 3,831                        |       | 3,771      |       | — |   | — |   | 4,472 |   | 4,581 |   | 34,220 |   | 36,471 |   |
| 2006                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | 3,994 |   | 3,987 |   | 2,307 |   | 2,288 |   | 6,301 |   | 6,275 |   |
| 2007                  |       | —        |       | —     |       | —        |       | —     |       | 2,874                        |       | 2,909      |       | — |   | — |   | — |   | — |   | 2,874 |   | 2,909 |   |
| Re-Remic(1)           |       | —        |       | —     |       | —        |       | —     |       | 3,901                        |       | 3,902      |       | 6,549 |   | 6,677 |   | — |   | — |   | 10,450 |   | 10,579 |   |
| Total Subprime        |       | $             | 19,727     |       | $          | 19,704        |       | $          | 20,602     |                         | $          | 22,647     |       | $ | 16,465 |   | $ | 16,280 |   | $ | 10,543 |   | $ | 10,664 |   | $ | 14,764 |   | $ | 14,258 |   | $ | 82,101 |   | $ | 83,553 |   |
| ** **            | ** ** | ** **    | ** ** | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Alt-A**             | ** ** | ** **    | ** ** | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 2003 & prior |       | $             | 1,551      |       | $          | 1,558         |       | $          | 1,422      |                         | $          | 1,419      |       | $ | — |   | $ | — |   | $ | 1,106 |   | $ | 1,081 |   | $ | — |   | $ | — |   | $ | 4,079 |   | $ | 4,058 |   |
| 2004                  |       | —        |       | —     |       | 4,951         |       | 4,548      |       | 173                          |       | 142        |       | 17,240 |   | 12,636 |   | 10,417 |   | 7,611 |   | 32,781 |   | 24,937 |   |
| 2005                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | 87,176 |   | 63,212 |   | 87,176 |   | 63,212 |   |
| 2006                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | 29,758 |   | 24,639 |   | 29,758 |   | 24,639 |   |
| 2007                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | 43,591 |   | 27,151 |   | 43,591 |   | 27,151 |   |
| 2008                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | — |   | — |   | — |   | — |   |
| 2009                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | — |   | — |   | — |   | — |   |
| 2010                  |       | 55,016        |       | 55,104     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | — |   | — |   | 55,016 |   | 55,104 |   |
| Re-Remic(1)           |       | 73,273        |       | 73,894     |       | —        |       | —     |       | 4,308                        |       | 4,415      |       | — |   | — |   | — |   | — |   | 77,581 |   | 78,309 |   |
| Total Alt-A           |       | $             | 129,840    |       | $          | 130,556       |       | $          | 6,373      |                         | $          | 5,967      |       | $ | 4,481 |   | $ | 4,557 |   | $ | 18,346 |   | $ | 13,717 |   | $ | 170,942 |   | $ | 122,613 |   | $ | 329,982 |   | $ | 277,410 |   |
| ** **            | ** ** | ** **    | ** ** | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Prime**             | ** ** | ** **    | ** ** | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 2003 & prior |       | $             | 106,004    |       | $          | 106,369       |       | $          | —     |                         | $          | —     |       | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 106,004 |   | $ | 106,369 |   |
| 2004                  |       | 43,531        |       | 43,353     |       | 24,691        |       | 24,108     |       | 5,762                        |       | 5,242      |       | 18,922 |   | 14,735 |   | 21,871 |   | 8,311 |   | 114,777 |   | 95,749 |   |
| 2005                  |       | 3,187         |       | 3,157      |       | 11,756        |       | 10,994     |       | —                       |       | —     |       | 15,709 |   | 15,520 |   | 73,516 |   | 63,978 |   | 104,168 |   | 93,649 |   |
| 2006                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | 3,327 |   | 2,953 |   | 3,327 |   | 2,953 |   |
| 2007                  |       | 22,023        |       | 22,241     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | — |   | — |   | 22,023 |   | 22,241 |   |
| 2008                  |       | —        |       | —     |       | —        |       | —     |       | —                       |       | —     |       | — |   | — |   | — |   | — |   | — |   | — |   |
| Re-Remic(1)           |       | 254,181       |       | 262,937    |       | 8,859         |       | 9,950      |       | 4,919                        |       | 4,919      |       | — |   | — |   | — |   | — |   | 267,959 |   | 277,806 |   |
| Total Prime           |       | $             | 428,926    |       | $          | 438,057       |       | $          | 45,306     |                         | $          | 45,052     |       | $ | 10,681 |   | $ | 10,161 |   | $ | 34,631 |   | $ | 30,255 |   | $ | 98,714 |   | $ | 75,242 |   | $ | 618,258 |   | $ | 598,767 |   |
|                  |       |          |       |       |       |          |       |       |       |                         |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Grand Total**       |       | $             | 578,493    |       | $          | 588,317       |       | $          | 72,281     |                         | $          | 73,666     |       | $ | 31,627 |   | $ | 30,998 |   | $ | 63,520 |   | $ | 54,636 |   | $ | 284,420 |   | $ | 212,113 |   | $ | 1,030,341 |   | $ | 959,730 |   |

 

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(1) Re-Remics of mortgage backed securities are prior vintages with cash flows structured into senior and subordinated bonds. Credit enhancement has been increased through the Re-Remic process on the securities ACC owns.

 

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**Forward-Looking Statements**

 

This report contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on pace,” “project” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. 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.

 

**ITEM 4.  CONTROLS AND PROCEDURES**

 

**Disclosure 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 in and pursuant to SEC regulations, 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. 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, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of ACC’s 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 March 31, 2011.

 

**Changes in Internal Control over Financial Reporting**

 

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

 

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**PART II.  OTHER INFORMATION**

 

**ITEM 1.  LEGAL PROCEEDINGS**

 

The information set forth in Note 7 to the Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference.

 

**ITEM 1A.  RISK FACTORS**

 

There have been no material changes in the risk factors provided in Part I, Item 1A of ACC’s 2010 10-K.

 

**ITEM 6.  EXHIBITS**

 

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

 

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**SIGNATURES**

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|                                |   | AMERIPRISE   CERTIFICATE COMPANY |
|-------------------------------------|--------|----------------------------------|
|                                |   | (Registrant)                     |
|                                |   |                             |
|                                |   |                             |
| Date:  May 2,   2011 |   | /s/   William F. Truscott        |
|                                |   | William   F. Truscott            |
|                                |   | Chief   Executive Officer        |
|                                |   |                             |
|                                |   |                             |
| Date:  May 2,   2011 |   | /s/   Ross P. Palacios           |
|                                |   | Ross   P. Palacios               |
|                                |   | Chief   Financial Officer        |

 

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**EXHIBIT INDEX**

 

The following exhibits are filed as part of this Quarterly Report:

 
| **Exhibit** | ** ** | **Description**                                                                                                                                                                                                                                                                             |
|-------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                                                                                                                                                        |
| 3(a)        |       | Amended   and Restated Certificate of Incorporation of American Express Certificate   Company, dated Aug. 1, 2005, filed electronically on or about   March 10, 2006 as Exhibit 3(a) to Registrant’s   Form 10-K is incorporated by reference. |
|        |       |                                                                                                                                                                                                                                                                                        |
| 3(b)        |       | By-Laws   of Ameriprise Certificate Company, filed electronically on or about   November 5, 2010 as Exhibit 3(b) to Registrant’s   Form 10-Q, are incorporated herein by reference.                                                                                |
|        |       |                                                                                                                                                                                                                                                                                        |
| *   31.1    |       | Certification   of William F. Truscott pursuant to Rule 13a-14(a) promulgated under   the Securities Exchange Act of 1934, as amended.                                                                                                                                            |
|        |       |                                                                                                                                                                                                                                                                                        |
| *   31.2    |       | Certification   of Ross P. Palacios pursuant to Rule 13a-14(a) promulgated under   the Securities Exchange Act of 1934, as amended.                                                                                                                                               |
|        |       |                                                                                                                                                                                                                                                                                        |
| *   32.1    |       | Certification   of William F. Truscott and Ross P. Palacios pursuant to 18 U.S.C.   Section 1350, as adopted pursuant to Section 906 of the   Sarbanes-Oxley Act of 2002.                                                                                                         |

 

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** Filed electronically herewithin.*

 

E-1

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