Ameriprise 2012 Annual Report Download - page 183

24. Discontinued Operations
During the fourth quarter of 2011, the Company sold Securities America to Ladenburg Thalmann Financial Services, Inc.
The components of loss from discontinued operations, net of tax, were as follows for the years ended December 31:
2012 2011 2010
(in millions)
Total net revenues $ — $ 382 $ 467
Income (loss) from discontinued operations $ 2 $ (124) $ (40)
Gain on sale (7) 26 —
Income tax benefit (3) (38) (16)
Loss from discontinued operations, net of tax $ (2) $ (60) $ (24)
25. Segment Information
The Company’s segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate &
Other. The prior period results for the Protection and Annuities segments have been recast due to the Company’s adoption
of the new accounting standard for DAC as discussed in Note 1 and Note 3.
The largest source of intersegment revenues and expenses is retail distribution services, where segments are charged
transfer pricing rates that approximate arm’s length market prices for distribution through the Advice & Wealth
Management segment. The Advice & Wealth Management segment provides distribution services for affiliated and
non-affiliated products and services. The Asset Management segment provides investment management services for the
Company’s owned assets and client assets, and accordingly charges investment and advisory management fees to the
other segments.
All costs related to shared services are allocated to the segments based on a rate times volume or fixed basis.
The Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage
services, primarily to retail clients through the Company’s advisors. The Company’s advisors have access to a diversified
selection of both affiliated and non-affiliated products to help clients meet their financial needs. A significant portion of
revenues in this segment is fee-based, driven by the level of client assets, which is impacted by both market movements
and net asset flows. The Company also earns net investment income on invested assets primarily from certificate products.
This segment earns revenues (distribution fees) for distributing non-affiliated products and earns intersegment revenues
(distribution fees) for distributing the Company’s affiliated products and services provided to its retail clients. Intersegment
expenses for this segment include expenses for investment management services provided by the Asset Management
segment. In January 2013, the Company completed the conversion of Ameriprise Bank to Ameriprise National Trust Bank.
As a result of the conversion, Ameriprise National Trust Bank is no longer engaged in deposit-taking and credit-originating
activities. In 2012, all banking deposits were liquidated and returned to clients, Ameriprise Bank’s consumer loan portfolio
was sold to affiliates of Ameriprise Bank and Ameriprise Bank’s credit card account portfolio was sold to Barclays.
The Asset Management segment provides investment advice and investment products to retail, high net worth and
institutional clients. Such products and services are provided on a global scale through two complementary asset
management businesses: Columbia Management Investment Advisers, LLC (‘‘Columbia’’ or ‘‘Columbia Management’’) and
Threadneedle. Columbia Management primarily provides U.S. domestic products and services and Threadneedle primarily
provides international investment products and services. Columbia provides clients with U.S. domestic individual products
through unaffiliated third party financial institutions and through the Advice & Wealth Management segment. Threadneedle
provides institutional products and services through the Company’s institutional sales force. International retail products are
primarily distributed through third-party institutions. Individual products include mutual funds, exchange-traded funds and
variable product funds underlying insurance and annuity separate accounts. Institutional asset management services are
designed to meet specific client objectives and may involve a range of products, including those that focus on traditional
asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds,
collective funds and property funds. Collateralized loan obligations and hedge funds are classified as alternative assets.
Revenues in this segment are primarily earned as fees based on managed asset balances, which are impacted by market
movements, net asset flows, asset allocation and product mix. The Company may also earn performance fees from certain
accounts where investment performance meets or exceeds certain pre-identified targets. In addition to the products and
services provided to third-party clients, management teams serving the Asset Management segment provide all
intercompany asset management services for Ameriprise Financial subsidiaries. The fees for all such services are reflected
within the Asset Management segment results through intersegment transfer pricing. Intersegment expenses for this
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