Ameriprise 2012 Annual Report Download - page 174

December 31,
2012 2011
(in millions)
Deferred income tax assets
Liabilities for future policy benefits and claims $ 1,320 $ 1,615
Investment impairments and write-downs 105 118
Investment related 104 —
Deferred compensation 310 274
Loss carryovers and tax credit carryforwards 43 134
Other 50 92
Gross deferred income tax assets 1,932 2,233
Less: valuation allowance (16) (5)
Total deferred income tax assets 1,916 2,228
Deferred income tax liabilities
Deferred acquisition costs 701 674
Investment related — 260
Deferred sales inducement costs 142 180
Net unrealized gains on Available-for-Sale securities 708 457
Depreciation expense 164 182
Intangible assets 74 60
Other 82 71
Gross deferred income tax liabilities 1,871 1,884
Net deferred income tax assets $ 45 $ 344
Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $39 million
which will expire beginning December 31, 2014.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (expense) were as follows:
2012 2011 2010
(in millions)
Balance at January 1 $ 184 $ 75 $ (33)
Additions based on tax positions related to the current year 2 1 2
Additions for tax positions of prior years 25 95 57
Reductions for tax positions of prior years (83) (8) (42)
Settlements (12) 21 91
Balance at December 31 $ 116 $ 184 $ 75
If recognized, approximately $38 million, $38 million and $54 million, net of federal tax benefits, of unrecognized tax
benefits as of December 31, 2012, 2011, and 2010, respectively, would affect the effective tax rate.
It is reasonably possible that the total amounts of unrecognized tax benefits will change in the next 12 months. Based on
the current audit position of the Company, it is estimated that the total amount of gross unrecognized tax benefits may
decrease by $76 million in the next 12 months.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax
provision. The Company recognized a net reduction of $1 million in interest and penalties for the year ended
December 31, 2012. The Company recognized $66 million of interest and penalties for the year ended December 31,
2011 and a net reduction of $17 million in interest and penalties for the year ended December 31, 2010. At
December 31, 2012 and 2011, the Company had a payable of $36 million and $37 million, respectively, related to
accrued interest and penalties.
The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states
and foreign jurisdictions. The IRS has completed its field examination of the 1997 through 2007 tax returns. However, for
federal income tax purposes, these years, except for 2007, continue to remain open as a consequence of certain
unagreed-upon issues. The IRS is in the process of completing the audit of the Company’s U.S. income tax returns for
2008 and 2009 and began auditing the Company’s U.S. income tax returns for 2010 and 2011 in the fourth quarter of
2012. The Company’s or certain of its subsidiaries’ state income tax returns are currently under examination by various
jurisdictions for years ranging from 1997 through 2008 and remain open for all years after 2008.
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