Ameriprise 2012 Annual Report Download - page 97

Corporate & Other
The following table presents the results of operations of our Corporate & Other segment on an operating basis:
Years Ended
December 31,
2011 2010 Change
(in millions)
Revenues
Management and financial advice fees $ (1) $ — $ (1) NM
Net investment loss (27) (21) (6) (29)%
Other revenues 30 28 2 7
Total revenues 2 7 (5) (71)
Banking and deposit interest expense (1) 3 (4) NM
Total net revenues 3 4 (1) (25)
Expenses
Distribution expenses 11——
Interest and debt expense 95 107 (12) (11)
General and administrative expense 148 120 28 23
Total expenses 244 228 16 7
Operating loss $ (241) $ (224) $ (17) (8)%
NM Not Meaningful.
Our Corporate & Other segment pretax operating loss excludes net realized gains or losses, integration and restructuring
charges and the impact of consolidating CIEs. Our Corporate & Other segment pretax operating loss was $241 million for
the year ended December 31, 2011 compared to $224 million for the prior year.
Operating net revenues, which exclude revenues or losses of CIEs and net realized gains or losses, decreased $1 million,
or 25%, to $3 million for the year ended December 31, 2011 compared to $4 million for the prior year. Net investment
loss, which excludes net investment income or loss of the CIEs and net realized gains or losses, was $27 million for the
year ended December 31, 2011 compared to $21 million for the prior year. Other revenues, which exclude revenues or
losses of the CIEs, increased $2 million, or 7%, to $30 million for the year ended December 31, 2011 compared to
$28 million for the prior year. During the second quarter of 2011, we reclassified from accumulated other comprehensive
income into earnings a $27 million gain on an interest rate hedge put in place in anticipation of issuing debt between
December 2010 and June 2011. Other revenues for 2010 included a $25 million benefit from payments related to the
Reserve Funds matter.
Total expenses, which exclude expenses of CIEs and integration and restructuring charges, increased $16 million, or 7%, to
$244 million for the year ended December 31, 2011 compared to $228 million for the prior year. Interest and debt
expense, which excludes interest expense on CIE debt, decreased $12 million, or 11%, to $95 million for the year ended
December 31, 2011 compared to $107 million for the prior year primarily due to lower average debt balances. General
and administrative expense, which excludes expenses of the CIEs and integration and restructuring charges, increased
$28 million, or 23%, to $148 million for the year ended December 31, 2011 compared to $120 million for the prior year.
Fair Value Measurements
We report certain assets and liabilities at fair value; specifically, separate account assets, derivatives, embedded
derivatives, properties held by our consolidated property funds, and most investments and cash equivalents. Fair value
assumes the exchange of assets or liabilities occurs in orderly transactions. Companies are not permitted to use market
prices that are the result of a forced liquidation or distressed sale. We include actual market prices, or observable inputs,
in our fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are
not available. We validate prices obtained from third parties through a variety of means such as: price variance analysis,
subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors.
See Note 14 to the Consolidated Financial Statements for additional information on our fair value measurements.
Non-Agency Residential Mortgage Backed Securities Backed by Sub-prime, Alt-A or Prime Collateral
Sub-prime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles. Alt-A
mortgage lending is the origination of residential mortgage loans to customers who have credit ratings above sub-prime but
may not conform to government-sponsored standards. Prime mortgage lending is the origination of residential mortgage
loans to customers with good credit profiles. We have exposure to each of these types of loans predominantly through
mortgage backed securities. The slowdown in the U.S. housing market, combined with relaxed underwriting standards by
some originators, has led to higher delinquency and loss rates for some of these investments. Persistent market conditions
have increased the likelihood of other-than-temporary impairments for certain non-agency residential mortgage backed
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