Ameriprise 2011 Annual Report Download - page 82

the prior year due to an unfavorable change in reserves primarily driven by higher premiums. The market impact to DSIC
was an expense of $2 million in 2011 compared to a benefit of $3 million in the prior year. Benefits, claims, losses and
settlement expenses for the prior year included a $21 million expense, net of DSIC, as a result of the implementation of
changes to the Portfolio Navigator program.
Amortization of DAC increased $474 million to $398 million for the year ended December 31, 2011 compared to a
benefit of $76 million for the prior year. Operating amortization of DAC, which excludes the DAC offset to the market
impact on variable annuity guaranteed living benefits, increased $498 million to $406 million for the year ended
December 31, 2011 compared to a benefit of $92 million for the prior year primarily due to the impact of updating
valuation assumptions and models, as well as the market impact on amortization of DAC. Operating amortization of DAC in
2011 included an expense of $65 million from updating valuation assumptions and models compared to a benefit of
$353 million in the prior year. The market impact on amortization of DAC was an expense of $13 million in 2011
compared to a benefit of $21 million in the prior year. Amortization of DAC in 2010 included a benefit of $13 million as a
result of the implementation of changes to the Portfolio Navigator program.
Protection
Our Protection segment offers a variety of protection products to address the protection and risk management needs of our
retail clients including life, disability income and property-casualty insurance. Life and disability income products are
primarily provided through affiliated advisors. Our property-casualty products are provided direct, primarily through affinity
relationships. We issue insurance policies through our life insurance subsidiaries and the property casualty companies. The
primary sources of revenues for this segment are premiums, fees, and charges we receive to assume insurance-related
risk. We earn net investment income on invested assets supporting insurance reserves and capital supporting the business.
We also receive fees based on the level of assets supporting VUL separate account balances. This segment earns
intersegment revenues from fees paid by the Asset Management segment for marketing support and other services
provided in connection with the availability of RiverSource Variable Series Trust, Columbia Funds Variable Insurance Trust,
Columbia Funds Variable Insurance Trust I and Wanger Advisors Trust funds under the VUL contracts. Intersegment
expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management
segment, as well as expenses for investment management services provided by the Asset Management segment.
Management believes that operating measures, which exclude net realized gains or losses for our Protection segment, best
reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis. See our
discussion on the use of these non-GAAP measures in the Overview section above.
The following table presents the results of operations of our Protection segment:
Years Ended December 31,
2011 2010
Less: Less:
GAAP Adjustments(1) Operating GAAP Adjustments(1) Operating Operating Change
(in millions)
Revenues
Management and financial advice
fees $ 56 $ — $ 56 $ 54 $ — $ 54 $ 2 4%
Distribution fees 95 — 95 96 — 96 (1) (1)
Net investment income 429 3 426 429 1 428 (2) —
Premiums 1,076 — 1,076 1,047 — 1,047 29 3
Other revenues 417 — 417 422 — 422 (5) (1)
Total revenues 2,073 3 2,070 2,048 1 2,047 23 1
Banking and deposit interest
expense 1 — 1 1 — 1 — —
Total net revenues 2,072 3 2,069 2,047 1 2,046 23 1
Expenses
Distribution expenses 32 — 32 32 — 32 — —
Interest credited to fixed accounts 142 — 142 147 — 147 (5) (3)
Benefits, claims, losses and
settlement expenses 1,085 — 1,085 1,059 — 1,059 26 2
Amortization of deferred acquisition
costs 201 — 201 183 — 183 18 10
General and administrative expense 242 — 242 223 — 223 19 9
Total expenses 1,702 — 1,702 1,644 — 1,644 58 4
Pretax income $ 370 $ 3 $ 367 $ 403 $ 1 $ 402 $ (35) (9)%
(1) Adjustments include net realized gains or losses.
67