Ameriprise 2011 Annual Report Download - page 157

15. Derivatives and Hedging Activities
Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments
is derived from an underlying variable or multiple variables, including equity, foreign exchange and interest rate indices or
prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s
products and operations.
The Company uses derivatives as economic hedges and accounting hedges. The following table presents the balance sheet
location and the gross fair value of derivative instruments, including embedded derivatives:
Asset Liability
December 31, December 31,
Derivatives designated Balance Sheet Balance Sheet
as hedging instruments Location 2011 2010 Location 2011 2010
(in millions) (in millions)
Cash flow hedges
Asset-based distribution fees Other assets $ — $ 10 Other liabilities $ — $ —
Interest on debt Other assets — — Other liabilities 11 —
Fair value hedges
Fixed rate debt Other assets 157 61 Other liabilities — —
Total qualifying hedges 157 71 11 —
Derivatives not designated
as hedging instruments
GMWB and GMAB
Interest rate contracts Other assets 1,801 366 Other liabilities 1,198 379
Equity contracts Other assets 1,314 354 Other liabilities 1,031 665
Credit contracts Other assets 1 4 Other liabilities — 1
Foreign currency contracts Other assets 7 — Other liabilities 10 —
Embedded derivatives(1) N/A — — Future policy benefits 1,585 421
and claims
Total GMWB and GMAB 3,123 724 3,824 1,466
Other derivatives:
Interest rate
Interest rate lock commitments Other assets — 1 Other liabilities — —
Equity
EIA Other assets — 1 Other liabilities — —
EIA embedded derivatives N/A — — Future policy benefits 2 3
and claims
IUL Other assets 1 — Other liabilities — —
IUL embedded derivatives N/A — — Future policy benefits 3 —
and claims
Stock market certificates Other assets 34 89 Other liabilities 29 75
Stock market certificates embedded
derivatives N/A — — Customer deposits 6 14
Ameriprise Financial
Franchise Advisor Deferred
Compensation Plan Other assets 2 8 Other liabilities — —
Seed money Other assets — — Other liabilities 1 —
Foreign exchange
Foreign currency Other assets — 1 Other liabilities 3 1
Commodity
Seed money Other assets 2 — Other liabilities — —
Total other 39 100 44 93
Total non-designated hedges 3,162 824 3,868 1,559
Total derivatives $ 3,319 $ 895 $ 3,879 $ 1,559
N/A Not applicable.
(1) The fair values of GMWB and GMAB embedded derivatives fluctuate based on changes in equity, interest rate and credit markets.
See Note 14 for additional information regarding the Company’s fair value measurement of derivative instruments.
142