Ameriprise 2011 Annual Report Download - page 160

Company’s cash flow hedges on the Consolidated Statements of Operations and the Consolidated Statements of Equity for
the years ended December 31:
Amount of Gain (Loss) Recognized in Other
Comprehensive Income on Derivatives
Derivatives designated as hedging instruments 2011 2010 2009
(in millions)
Interest on debt $ (11) $ 16 $ 19
Asset-based distribution fees 1 20 —
Total $ (10) $ 36 $ 19
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive
Income into Income
Location of Gain (Loss) Reclassified from Accumulated
Other Comprehensive Income into Income 2011 2010 2009
(in millions)
Other revenues $ 27 $ — $ —
Interest and debt expense 4 8 8
Distribution fees 9 11 —
Net investment income (6) (6) (6)
Total $ 34 $ 13 $ 2
The following is a summary of unrealized derivatives gains (losses) included in accumulated other comprehensive income
(loss) related to cash flow hedges:
2011 2010 2009
(in millions)
Net unrealized derivatives gains (losses) at January 1 $ 18 $ 3 $ (8)
Holding gains (losses) (10) 36 19
Reclassification of realized gains (34) (13) (2)
Income tax benefit (provision) 15 (8) (6)
Net unrealized derivatives gains (losses) at December 31 $ (11) $ 18 $ 3
Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is
24 years and relates to forecasted debt interest payments.
Fair Value Hedges
During the first quarter of 2010, the Company entered into and designated as fair value hedges three interest rate swaps
to convert senior notes due 2015, 2019 and 2020 from fixed rate debt to floating rate debt. The swaps have identical
terms as the underlying debt being hedged so no ineffectiveness is expected to be realized. The Company recognizes gains
and losses on the derivatives and the related hedged items within interest and debt expense. The following table presents
the amounts recognized in income related to fair value hedges for the years ended December 31:
Amount of Gain Recognized
in Income on Derivatives
Derivatives designated as hedging instruments Location of Gain Recorded into Income 2011 2010
(in millions)
Fixed rate debt Interest and debt expense $ 41 $ 36
Credit Risk
Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in
accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established
guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes
members of senior management. Key components of this program are to require preapproval of counterparties and the use
of master netting arrangements and collateral arrangements whenever practical. As of December 31, 2011 and 2010, the
Company held $802 million and $98 million, respectively, in cash and cash equivalents and recorded a corresponding
liability in other liabilities for collateral the Company is obligated to return to counterparties. As of December 31, 2011 and
2010, the Company had accepted additional collateral consisting of various securities with a fair value of $186 million and
$23 million, respectively, which are not reflected on the Consolidated Balance Sheets. As of December 31, 2011 and
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