Ameriprise 2013 Annual Report Download - page 189

The Protection segment offers a variety of products to address the protection and risk management needs of the
Company’s retail clients including life, DI and property-casualty insurance. Life and DI products are primarily provided
through the Company’s advisors. The Company’s property-casualty products are sold through affinity relationships. The
Company issues insurance policies through its life insurance subsidiaries and the Property Casualty companies. The primary
sources of revenues for this segment are premiums, fees, and charges that the Company receives to assume insurance-
related risk. The Company earns net investment income on owned assets supporting insurance reserves and capital
supporting the business. The Company also receives fees based on the level of assets supporting VUL separate account
balances. This segment earns intersegment revenues from fees paid by the Asset Management segment for marketing
support and other services provided in connection with the availability of VIT Funds under the VUL contracts. Intersegment
expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management
segment, as well as expenses for investment management services provided by the Asset Management segment.
The Corporate & Other segment consists of net investment income or loss on corporate level assets, including excess
capital held in the Company’s subsidiaries and other unallocated equity and other revenues as well as unallocated
corporate expenses. The Corporate & Other segment also includes revenues and expenses of consolidated investment
entities, which are excluded on an operating basis.
Management uses segment operating measures in goal setting, as a basis for determining employee compensation and in
evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with
GAAP accounting guidance for segment reporting, operating earnings is the Company’s measure of segment performance.
Operating earnings should not be viewed as a substitute for GAAP income from continuing operations before income tax
provision. The Company believes the presentation of segment operating earnings, as the Company measures it for
management purposes, enhances the understanding of its business by reflecting the underlying performance of its core
operations and facilitating a more meaningful trend analysis.
The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined
below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and
not providing for income taxes on a segment basis.
Operating earnings is defined as operating net revenues less operating expenses. Operating net revenues and operating
expenses exclude the results of discontinued operations, the market impact on IUL benefits (net of hedges and the related
DAC amortization, unearned revenue amortization, and the reinsurance accrual), integration and restructuring charges and
the impact of consolidating investment entities. Operating net revenues also exclude net realized gains or losses. Operating
expenses also exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and
DAC amortization). The market impact on variable annuity guaranteed benefits and IUL benefits includes changes in
embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values
and unhedged items including the difference between assumed and actual underlying separate account investment
performance, fixed income credit exposures, transaction costs and certain policyholder contract elections, net of related
impacts on DAC and DSIC amortization. The market impact also includes certain valuation adjustments made in
accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the
impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the Company’s life
insurance subsidiary’s nonperformance spread. Integration and restructuring charges primarily relate to the Company’s
acquisition of the long-term asset management business of Columbia Management Group on April 30, 2010. The costs
include system integration costs, proxy and other regulatory filing costs, employee reduction and retention costs and
investment banking, legal and other acquisition costs. Beginning in the second quarter of 2012, integration and
restructuring charges also include expenses related to the Company’s transition of its federal savings bank subsidiary,
Ameriprise Bank, FSB, to a limited powers national trust bank.
The following tables summarize selected financial information by segment and reconcile segment totals to those reported
on the consolidated financial statements:
December 31,
2013 2012
(in millions)
Advice & Wealth Management $ 9,571 $ 8,962
Asset Management 7,223 6,267
Annuities 98,354 91,587
Protection 19,605 19,065
Corporate & Other 9,823 8,848
Total assets $ 144,576 $ 134,729
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