Ameriprise 2011 Annual Report Download - page 69

The following table presents a reconciliation of operating return on equity excluding CIEs and accumulated other
comprehensive income:
Twelve Months Ended
December 31,
2011 2010
(in millions)
Net income from continuing operations attributable to Ameriprise Financial $ 1,136 $ 1,121
Less: Adjustments(1) (96) (67)
Operating earnings $ 1,232 $ 1,188
Total Ameriprise Financial, Inc. shareholders’ equity $ 10,470 $ 10,309
Less: Assets and liabilities held for sale 29 102
Less: Accumulated other comprehensive income, net of tax 603 540
Total Ameriprise Financial, Inc. shareholders’ equity from continuing operations excluding AOCI 9,838 9,667
Less: Equity impacts attributable to CIEs 478 455
Operating equity $ 9,360 $ 9,212
Return on equity from continuing operations, excluding AOCI 11.5% 11.6%
Operating return on equity excluding CIEs and AOCI(2) 13.2% 12.9%
(1) Adjustments reflect the trailing twelve months’ sum of after-tax net realized gains or losses; the market impact on variable annuity
guaranteed living benefits, net of hedges, DAC and DSIC amortization; and integration and restructuring charges.
(2) Operating return on equity excluding accumulated other comprehensive income is calculated using the trailing twelve months of
earnings excluding the after-tax net realized gains or losses; the market impact on variable annuity guaranteed living benefits, net of
hedges, DAC and DSIC amortization; integration and restructuring charges; and discontinued operations in the numerator, and
Ameriprise Financial, Inc. shareholders’ equity excluding accumulated other comprehensive income; the impact of CIEs; and the
assets and liabilities held for sale using a five point average of quarter-end equity in the denominator.
Overall
Net income attributable to Ameriprise Financial decreased $21 million, or 2%, to $1.1 billion for the year ended
December 31, 2011 compared to $1.1 billion for the prior year. Net income from continuing operations attributable to
Ameriprise Financial increased $15 million, or 1%, to $1.1 billion for the year ended December 31, 2011 compared to
$1.1 billion for the prior year. Loss from discontinued operations, net of tax, of $60 million for the year ended
December 31, 2011 included a $77 million after-tax charge related to previously disclosed legal expenses and a
$14 million after-tax gain on the sale of Securities America. Operating earnings exclude net realized gains or losses; the
market impact on variable annuity guaranteed living benefits, net of hedges, DSIC and DAC amortization; integration and
restructuring charges; income (loss) of discontinued operations; and the impact of consolidating CIEs. Operating earnings
increased $44 million, or 4%, to $1.2 billion for the year ended December 31, 2011 compared to $1.2 billion for the
prior year reflecting higher revenues from business growth and an additional four months of Columbia Management results,
partially offset by the impact of updating valuation assumptions and models, the market impacts on DAC and DSIC
amortization and the negative impact of the low interest rate environment. The market impact on DAC and DSIC
amortization was a $17 million pretax charge for the year ended December 31, 2011 compared to a $34 million pretax
benefit for the prior year.
Operating earnings will continue to be negatively impacted by the ongoing low interest rate environment in 2012. In
addition to continuing spread compression in our interest sensitive product lines throughout the year, there is also the
potential for interest rate related impacts to DAC and DSIC amortization and the level of reserves as a result of our
ongoing review of various actuarial related assumptions, which could be material.
The total pretax impacts on our revenues and expenses for 2011 attributable to the review of valuation assumptions and
models on an operating basis were as follows:
Benefits, Claims,
Losses and Amortization
Segment Pretax Benefit (Charge) Other Revenues Settlement Expenses of DAC Total
(in millions)
Valuation assumptions and model changes:
Annuities $ — $ 40 $ (65) $ (25)
Protection (20) 4 2 (14)
Total $ (20) $ 44 $ (63) $ (39)
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