Ameriprise 2013 Annual Report Download - page 179

Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $39 million,
net of federal benefit, which will expire beginning December 31, 2014.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits were as follows:
2013 2012 2011
(in millions)
Balance at January 1 $ 116 $ 184 $ 75
Additions based on tax positions related to the current year 22 2 1
Additions for tax positions of prior years 74 25 95
Reductions for tax positions of prior years (3) (83) (8)
Settlements — (12) 21
Balance at December 31 $ 209 $ 116 $ 184
If recognized, approximately $62 million, $38 million and $38 million, net of federal tax benefits, of unrecognized tax
benefits as of December 31, 2013, 2012, and 2011, 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. The
Company estimates that the total amount of gross unrecognized tax benefits may decrease by $150 million to
$160 million in the next 12 months due to resolution of Internal Revenue Service (‘‘IRS’’) examinations.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax
provision. The Company recognized a net increase of $6 million, a net reduction of $1 million, and a net increase of
$66 million in interest and penalties for the years ended December 31, 2013, 2012, and 2011, respectively. At
December 31, 2013 and 2012, the Company had a payable of $42 million and $36 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 state
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 its audits of the Company’s U.S. Income Tax Returns for
2008 through 2011. These audits are expected to be completed in 2014. 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 2011
and remain open for all years after 2011. The Company filed its 2012 tax return in the third quarter of 2013, but the IRS
has not yet begun its examination of 2012.
The items comprising other comprehensive income (loss) are presented net of the following income tax provision (benefit)
amounts:
Years Ended December 31,
2013 2012 2011
(in millions)
Net unrealized securities gains (losses) $ (344) $ 238 $ 90
Net unrealized derivatives gains (losses) — 4 (15)
Defined benefit plans 24 (9) (28)
Foreign currency translation 3 7 (1)
Net income tax provision (benefit) $ (317) $ 240 $ 46
22. Retirement Plans and Profit Sharing Arrangements
Defined Benefit Plans
Pension Plans
The Company’s U.S. non-advisor employees are generally eligible for the Ameriprise Financial Retirement Plan (the
‘‘Retirement Plan’’), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement
Income Security Act of 1974, as amended (‘‘ERISA’’). Funding of costs for the Retirement Plan complies with the
applicable minimum funding requirements specified by ERISA and is held in a trust. The Retirement Plan is a cash balance
plan by which the employees’ accrued benefits are based on notional account balances, which are maintained for each
individual. Each pay period these balances are credited with an amount equal to a percentage of eligible compensation as
defined by the Retirement Plan (which includes, but is not limited to, base pay, performance based incentive pay,
commissions, shift differential and overtime). Prior to March 1, 2010, the percentage ranged from 2.5% to 10% based on
employees’ age plus years of service. Effective March 1, 2010, the percentage ranges from 2.5% to 5% based on
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