Summary
This 8-K filing from American Express Company (AXP) on June 6, 2005, announces a significant corporate action: the company has filed a Form 10 registration statement for the spin-off of its American Express Financial Advisors (AEFA) unit. The newly named entity, Ameriprise Financial, Inc., will become an independent, publicly traded company. This transaction is intended to be tax-free for American Express and its shareholders. The filing also provides crucial financial details regarding the separation costs. American Express anticipates total non-recurring separation costs of approximately $945 million (pretax) through 2008. A substantial portion, $875 million, will be borne by Ameriprise, supported by a $1 billion capital contribution from American Express. The remaining $70 million in separation costs will be incurred by American Express, with $50 million expected in 2005. These costs will be disclosed in subsequent SEC filings, with costs incurred by American Express post-spin-off to be reported under 'discontinued operations.'
Key Highlights
- 1American Express (AXP) filed a Form 10 registration statement for the spin-off of its American Express Financial Advisors (AEFA) unit.
- 2The AEFA unit will be renamed Ameriprise Financial, Inc. and become an independent public company.
- 3The spin-off is intended to be tax-free for American Express and its shareholders.
- 4Total estimated non-recurring separation costs are approximately $945 million (pretax) through 2008.
- 5Ameriprise Financial will bear the majority of separation costs ($875 million), supported by a $1 billion capital contribution from American Express.
- 6American Express expects to incur $70 million in separation costs, with $50 million expected in 2005.
- 7Costs incurred by American Express post-spin-off will be reported under 'discontinued operations.'