Ameriprise 2008 Annual Report Download - page 154

Accumulated earnings of certain foreign subsidiaries, which totaled $200 million at December 31, 2008, are intended to be
permanently reinvested outside the United States. Accordingly, U.S. federal taxes, which would have aggregated $37 million,
have not been provided on those earnings.
Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for
GAAP reporting versus income tax return purposes. The significant components of the Company’s deferred income tax assets
and liabilities were as follows:
December 31,
2008 2007
(in millions)
Deferred income tax assets:
Liabilities for future policy benefits and claims $ 1,744 $ 1,212
Investment impairments and write-downs 329 77
Deferred compensation 210 185
Unearned revenues 27 29
Net unrealized losses on Available-for-Sale securities 545 83
Accrued liabilities 64 64
Investment related — 119
Net operating loss and tax credit carryforwards 222 182
Other 132 70
Gross deferred income tax assets 3,273 2,021
Deferred income tax liabilities:
Deferred acquisition costs 1,226 1,313
Deferred sales inducement costs 181 179
Investment related 616 —
Depreciation expense 155 171
Intangible assets 13 104
Other 78 134
Gross deferred income tax liabilities 2,269 1,901
Net deferred income tax assets $ 1,004 $ 120
The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management
believes will not be realized. Included in deferred tax assets is a significant deferred tax asset relating to capital losses that
have been recognized for financial statement purposes but not yet 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, a) future taxable income exclusive of reversing temporary differences and
carryforwards, b) future reversals of existing taxable temporary differences, c) taxable income in prior carryback years, and
d) tax planning strategies. Based on analysis of the Company’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 December 31, 2008 and 2007.
Included in the Company’s deferred income tax assets are net operating loss carryforwards of $57 million which will expire
December 31, 2025 and 2026 as well as tax credit carryforwards of $165 million which will expire December 31, 2025,
2026, 2027 and 2028.
Effective January 1, 2007, the Company adopted the provisions of FIN 48. As a result of the implementation of FIN 48 the
Company recognized a $4 million increase in the liability for unrecognized tax benefits, which was accounted for as a
reduction to the January 1, 2007 balance of retained earnings.
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