Ameriprise 2013 Annual Report Download - page 100

Corporate & Other
The following table presents the results of operations of our Corporate & Other segment on an operating basis:
Years Ended
December 31,
2012 2011 Change
(in millions)
Revenues
Management and financial advice fees $ (1) $ (1) $ — —%
Distribution fees 1—1NM
Net investment income (loss) 9 (27) 36 NM
Other revenues 10 30 (20) (67)
Total revenues 19 2 17 NM
Banking and deposit interest expense (1) (1) — —
Total net revenues 20 3 17 NM
Expenses
Distribution expenses — 1 (1) NM
Interest and debt expense 94 95 (1) (1)
General and administrative expense 196 148 48 32
Total expenses 290 244 46 19
Operating loss $ (270) $ (241) $ (29) (12)%
NM Not Meaningful.
Our Corporate & Other segment pretax operating loss excludes net realized gains or losses, the impact of consolidating
CIEs and restructuring charges. Our Corporate & Other segment pretax operating loss was $270 million for the year ended
December 31, 2012 compared to $241 million for the prior year.
Net revenues, which exclude revenues or losses of CIEs, net realized gains or losses and restructuring charges, increased
$17 million to $20 million for the year ended December 31, 2012 compared to $3 million for the prior year. Net
investment income, which excludes net investment income or loss of the CIEs, net realized gains or losses and
restructuring charges, was $9 million for the year ended December 31, 2012 compared to a loss of $27 million for the
prior year primarily reflecting a volume-driven increase in interest income and $7 million of lower losses on our affordable
housing partnerships. Other revenues decreased $20 million, or 67%, to $10 million for the year ended December 31,
2012 compared to $30 million for the prior year due to a $27 million gain on an interest rate hedge put in place in
anticipation of issuing debt that was reclassified from accumulated other comprehensive income into earnings in 2011.
Total expenses, which exclude expenses of CIEs and restructuring charges, increased $46 million, or 19%, to $290 million
for the year ended December 31, 2012 compared to $244 million for the prior year due to an increase in general and
administrative expense driven by higher severance expense, compensation related accruals and investment spending,
partially offset by a $15 million benefit from a settlement with a third-party service provider.
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 and is not 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. As a part of our risk
management process, an internal rating system is used in conjunction with market data as the basis of analysis to assess
the likelihood that we will not receive all contractual principal and interest payments for these investments. For the
investments that are more at risk for impairment, we perform our own assessment of projected cash flows incorporating
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