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Concentrations of credit risk of commercial mortgage loans by property type were as follows:
December 31,
2007 2006
On-Balance Funding On-Balance Funding
Sheet Commitments Sheet Commitments
(in millions)
Commercial mortgage loans by U.S. property type:
Office buildings $ 932 $ 12 $1,064 $ 4
Shopping centers and retail 897 66 763 71
Apartments 461 8 519 2
Industrial buildings 549 9 495 12
Hotels and motels 81 — 95 4
Medical buildings 54 — 58 —
Other 141 6 102 1
3,115 101 3,096 94
Less: allowance for loan losses (18) — (40) —
Total $3,097 $101 $3,056 $94
Commitments to fund commercial mortgages were made in the ordinary course of business. The funding commitments at December 31, 2007
and 2006 approximate fair value.
Trading Securities and Equity Method Investments in Hedge Funds
Net recognized gains related to trading securities and equity method investments in hedge funds for the years ended December 31, 2007, 2006
and 2005 were $3 million, $41 million and $27 million, respectively.
10. Deferred Acquisition Costs and Deferred Sales Inducement Costs
The balances of and changes in DAC were as follows:
Years Ended December 31,
2007 2006 2005
(in millions)
Balance at January 1 $4,499 $4,182 $3,956
Impact of SOP 05-1 at adoption (204) ——
Capitalization of acquisition costs 771 744 693
DAC transfer related to AMEX Assurance ceding arrangement —— (117)
Amortization, excluding impact of annual third quarter changes in DAC-related assumptions (535) (510) (498)
Amortization, impact of annual third quarter changes in DAC-related assumptions (16) 38 67
Impact of change in net unrealized securities losses (gains) (12) 45 81
Balance at December 31 $4,503 $4,499 $4,182
The balances of and changes in DSIC were as follows:
Years Ended December 31,
2007 2006 2005
(in millions)
Balance at January 1 $452 $370 $303
Impact of SOP 05-1 at adoption (11) ——
Capitalization of sales inducements 124 126 94
Amortization (53) (48) (40)
Impact of change in net unrealized securities losses (gains) (1) 413
Balance at December 31 $511 $452 $370
80 Ameriprise Financial 2007 Annual Report