Ameriprise 2012 Annual Report Download - page 69

Premiums paid by fixed and variable universal life policyholders and annuity contractholders are considered deposits and
are not included in revenue. Other revenues also include revenues related to certain consolidated limited partnerships.
Banking and Deposit Interest Expense
Banking and deposit interest expense primarily includes interest expense related to banking deposits and investment
certificates. The changes in fair value of stock market certificate embedded derivatives and the derivatives hedging stock
market certificates are included within banking and deposit interest expense.
Distribution Expenses
Distribution expenses primarily include compensation paid to our financial advisors, registered representatives, third-party
distributors and wholesalers, net of amounts capitalized and amortized as part of DAC. The amounts capitalized and
amortized are based on actual distribution costs. The majority of these costs, such as advisor and wholesaler
compensation, vary directly with the level of sales. Distribution expenses also include marketing support and other
distribution and administration related payments made to affiliated and unaffiliated distributors of products provided by our
affiliates. The majority of these expenses vary with the level of sales, or assets held, by these distributors, and the
remainder is fixed. Distribution expenses also include wholesaling costs.
Interest Credited to Fixed Accounts
Interest credited to fixed accounts represents amounts earned by contractholders and policyholders on fixed account values
associated with fixed and variable universal life and annuity contracts. The changes in fair value of equity indexed annuity
and IUL embedded derivatives and the derivatives hedging these products are included within interest credited to fixed
accounts.
Benefits, Claims, Losses and Settlement Expenses
Benefits, claims, losses and settlement expenses consist of amounts paid and changes in liabilities held for anticipated
future benefit payments under insurance policies and annuity contracts, along with costs to process and pay such
amounts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts.
Benefits under variable annuity guarantees include the changes in fair value of GMWB and GMAB embedded derivatives
and the derivatives hedging these benefits, as well as the changes in fair value of derivatives hedging GMDB provisions.
Benefits, claims, losses and settlement expenses also include amortization of DSIC.
Amortization of DAC
Direct sales commissions and other costs capitalized as DAC are amortized over time. For annuity and UL contracts, DAC
are amortized based on projections of estimated gross profits over amortization periods equal to the approximate life of the
business. For other insurance products, DAC are generally amortized as a percentage of premiums over amortization
periods equal to the premium-paying period. For certain mutual fund products, DAC are generally amortized over fixed
periods on a straight-line basis adjusted for redemptions. See ‘‘Deferred Acquisition Costs and Deferred Sales Inducement
Costs’’ under ‘‘Critical Accounting Policies’’ for further information on DAC.
Interest and Debt Expense
Interest and debt expense primarily includes interest on corporate debt and debt of CIEs, the impact of interest rate
hedging activities and amortization of debt issuance costs.
General and Administrative Expense
General and administrative expense includes compensation, share-based awards and other benefits for employees (other
than employees directly related to distribution, including financial advisors), integration costs, professional and consultant
fees, information technology, facilities and equipment, advertising and promotion, legal and regulatory and corporate
related expenses.
Assets Under Management and Administration
Assets under management (‘‘AUM’’) include external client assets for which we provide investment management services,
such as the assets of the Columbia funds and Threadneedle funds, assets of institutional clients and assets of clients in
our advisor platform held in wrap accounts as well as assets managed by sub-advisers selected by us. AUM also includes
certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize
management fees in our Asset Management segment, such as the assets of the general account and the variable product
funds held in the separate accounts of our life insurance subsidiaries and client assets of CIEs. These assets do not
include assets under advisement, for which we provide model portfolios but do not have full discretionary investment
authority.
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