Ameriprise 2014 Annual Report Download - page 157

Short-term Borrowings
The Company enters into repurchase agreements in exchange for cash, which it accounts for as secured borrowings. The
Company has pledged Available-for-Sale securities consisting of agency residential mortgage backed securities and
commercial mortgage backed securities to collateralize its obligation under the repurchase agreements. The fair value of
the securities pledged is recorded in investments and was $52 million at both December 31, 2014 and 2013. The stated
interest rate of the repurchase agreements is a weighted average annualized interest rate on repurchase agreements held
as of the balance sheet date.
The Company’s insurance subsidiary is a member of the FHLB of Des Moines which provides access to collateralized
borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities to
collateralize its obligation under these borrowings. The fair value of the securities pledged is recorded in investments and
was $298 million and $574 million at December 31, 2014 and December 31, 2013, respectively. The stated interest rate
of the FHLB advances is a weighted average annualized interest rate on the outstanding borrowings as of the balance
sheet date.
On September 30, 2013, the Company entered into a restated credit agreement for $500 million expiring on
September 28, 2018. Under the terms of the agreement, the Company may increase the amount of this facility to
$750 million upon satisfaction of certain approval requirements. The Company had no borrowings outstanding under this
facility at both December 31, 2014 and 2013. Available borrowings under the agreement are reduced by any outstanding
letters of credit and outstanding letters of credit issued against this facility was $1 million as of December 31, 2014.
14. Fair Values of Assets and Liabilities
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset
or liability is not exchanged subject to a forced liquidation or distressed sale.
Valuation Hierarchy
The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the
inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the
lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy
are defined as follows:
Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the
measurement date.
Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets
and liabilities.
Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
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