Ameriprise 2014 Annual Report Download - page 170

Derivatives Not Designated as Hedges
The following table presents a summary of the impact of derivatives not designated as hedging instruments on the
Consolidated Statements of Operations:
Amount of Gain (Loss) on Derivatives
Recognized in Income
Years Ended December 31,
Derivatives not designated as Location of Gain (Loss) on
hedging instruments Derivatives Recognized in Income 2014 2013 2012
(in millions)
GMWB and GMAB
Interest rate contracts Benefits, claims, losses and settlement expenses $ 1,122 $ (742) $ 17
Equity contracts Benefits, claims, losses and settlement expenses (304) (1,084) (1,218)
Credit contracts Benefits, claims, losses and settlement expenses (33) 6 (2)
Foreign exchange contracts Benefits, claims, losses and settlement expenses (9) 26 (1)
Embedded derivatives(1) Benefits, claims, losses and settlement expenses (1,054) 1,408 752
Total GMWB and GMAB (278) (386) (452)
Other derivatives:
Interest rate
Bank assets Net investment income — — (7)
Tax hedge Net investment income 3 — 1
Seed money Net investment income (2) 2 —
Equity
IUL Interest credited to fixed accounts 20 11 1
IUL embedded derivatives Interest credited to fixed accounts (27) (16) 4
EIA Interest credited to fixed accounts 1 3 1
EIA embedded derivatives Interest credited to fixed accounts (2) (3) 1
Stock market certificates Banking and deposit interest expense 3 7 6
Stock market certificates
embedded derivatives Banking and deposit interest expense (3) (6) (5)
Seed money Net investment income (4) (17) (6)
Ameriprise Financial Franchise
Advisor Deferred Compensation
Plan Distribution expenses — — 5
Deferred compensation Distribution expenses 13 9 —
Deferred compensation General and administrative expense 4 5 —
Foreign exchange
Foreign currency Net investment income 2 (2) —
Deferred compensation Distribution expenses (5) — —
Deferred compensation General and administrative expense (1) — —
Commodity
Seed money Net investment income — 1 —
Other
Macro hedge program Benefits, claims, losses and settlement expenses (12) (42) —
Total other derivatives (10) (48) 1
Total derivatives $ (288) $ (434) $ (451)
(1) The fair values of GMWB and GMAB embedded derivatives fluctuate based on changes in equity, interest rate and credit markets.
The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment.
These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange
rate risk related to various products and transactions of the Company.
Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals
each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation
value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The
Company economically hedges the exposure related to non-life contingent GMWB and GMAB provisions primarily using
various futures, options, interest rate swaptions, interest rate swaps, total return swaps and variance swaps. At
December 31, 2014 and 2013, the gross notional amount of derivative contracts for the Company’s GMWB and GMAB
provisions was $132.0 billion and $139.7 billion, respectively.
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