Ameriprise 2011 Annual Report Download - page 149

At December 31, 2011, future maturities of Ameriprise Financial long-term debt were as follows:
(in millions)
2012 $—
2013 —
2014 —
2015 700
2016 —
Thereafter 1,544
Total future maturities $ 2,244
Short-term borrowings
The Company enters into repurchase agreements in exchange for cash, which it accounts for as secured borrowings. The
Company has pledged Available-for-Sale securities consisting of agency residential mortgage backed securities and
commercial mortgage backed securities to collateralize its obligation under the repurchase agreements. The fair value of
the securities pledged is recorded in investments and was $521 million and $412 million at December 31, 2011 and
2010, respectively. The stated interest rate of the short-term borrowings is a weighted average annualized interest rate on
repurchase agreements held as of the balance sheet date.
On November 22, 2011, the Company entered into a credit agreement for $500 million expiring on November 22, 2015.
Under the terms of the agreement, the Company may increase the amount of this facility to $750 million upon satisfaction
of certain approval requirements. Available borrowings under the agreement are reduced by any outstanding letters of
credit. The Company had no borrowings outstanding under this facility and outstanding letters of credit issued against this
facility were $2 million as of December 31, 2011.
14. 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
The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the
inputs used by the Company’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
The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of
its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation
techniques to convert future projected cash flows to a single discounted present value amount. When applying either
approach, the Company 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.
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