Ameriprise 2010 Annual Report Download - page 150

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 Ameriprise Financial measured at fair value on a recurring basis.
December 31,
2010 2009
Carrying Value Fair Value Carrying Value Fair Value
(in millions) (in millions)
Financial Assets
Commercial mortgage loans, net $ 2,577 $ 2,671 $ 2,663 $ 2,652
Policy loans 733 808 720 795
Receivables 1,870 1,584 1,387 1,055
Restricted and segregated cash 1,516 1,516 1,452 1,452
Other investments and assets 331 338 439 442
Financial Liabilities
Future policy benefits and claims $ 15,328 $ 15,768 $ 15,540 $ 15,657
Investment certificate reserves 3,127 3,129 4,050 4,053
Banking and brokerage customer deposits 5,638 5,642 4,478 4,478
Separate account liabilities 4,930 4,930 4,268 4,268
Debt and other liabilities 2,710 2,907 1,985 2,027
Investments
The fair value of commercial mortgage loans, except those with significant credit deterioration, is 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 the Company’s estimate of the amount recoverable on
the loan.
The fair value of policy loans is determined using discounted cash flows.
Receivables
The fair value of consumer bank loans is determined by discounting estimated cash flows and incorporating adjustments
for prepayment, administration expenses, severity and credit loss estimates, with discount rates based on the Company’s
estimate of current market conditions.
Loans held for sale are measured at the lower of cost or market and fair value is based on what secondary markets are
currently offering for loans with similar characteristics.
Brokerage margin loans are measured at outstanding balances, which are a reasonable estimate of fair value because of
the sufficiency of the collateral and short term nature of these loans.
Restricted and Segregated Cash
Restricted and segregated cash is generally set aside for specific business transactions and restrictions are specific to the
Company and do not transfer to third party market participants; therefore, the carrying amount is a reasonable estimate of
fair value.
Amounts segregated under federal and other regulations may also reflect resale agreements and are measured at the cost
at which the securities will be sold. This measurement is a reasonable estimate of fair value because of the short time
between entering into the transaction and its expected realization and the reduced risk of credit loss due to pledging U.S.
government-backed securities as collateral.
Other Investments and Assets
Other investments and assets primarily consist of syndicated loans. The fair value of syndicated loans is obtained from a
nationally-recognized pricing service.
Future Policy Benefits and Claims
The fair value of fixed annuities, in deferral status, is determined by discounting cash flows using a risk neutral discount
rate with adjustments for profit margin, expense margin, early policy surrender behavior, a provision for adverse deviation
from estimated early policy surrender behavior, and the Company’s nonperformance risk specific to these liabilities. The fair
value of other liabilities including non-life contingent fixed annuities in payout status, equity indexed annuity host contracts
and the fixed portion of a small number of variable annuity contracts classified as investment contracts is determined in a
similar manner.
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