Ameriprise 2014 Annual Report Download - page 172

The following tables present the impact of the effective portion of the Company’s cash flow hedges on the Consolidated
Statements of Operations and the Consolidated Statements of Equity:
Amount of Gain Recognized in
Other Comprehensive Income
(Loss) on Derivatives
Years Ended December 31,
Derivatives designated as hedging
instruments 2014 2013 2012
(in millions)
Interest on debt $—$—$14
Amount of Gain (Loss)
Reclassified from Accumulated
Other Comprehensive
Income into Income
Location of Gain (Loss) Reclassified Years Ended December 31,
from Accumulated Other
Comprehensive Income into Income 2014 2013 2012
(in millions)
Other revenues $— $— $ 3
Interest and debt expense 444
Net investment income (5) (5) (6)
Total $(1) $(1) $ 1
The following is a summary of net unrealized derivatives losses included in AOCI related to cash flow hedges:
2014 2013 2012
(in millions)
Net unrealized derivatives losses at January 1 $ (1) $ (2) $ (11)
Holding gains ——14
Reclassification of realized (gains) losses 1 1 (1)
Income tax provision — — (4)
Net unrealized derivatives losses at December 31 $ — $ (1) $ (2)
Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is
21 years and relates to forecasted debt interest payments.
Fair Value Hedges
In 2010, the Company entered into and designated as fair value hedges three interest rate swaps to convert senior notes
due 2015, 2019 and 2020 from fixed rate debt to floating rate debt. The swaps have identical terms as the underlying
debt being hedged so no ineffectiveness is expected to be realized. The Company recognizes gains and losses on the
derivatives and the related hedged items within interest and debt expense. The following table presents the amounts
recognized in income related to fair value hedges:
Amount of Gain Recognized in
Income on Derivatives
Years Ended December 31,
Derivatives designated as hedging
instruments Location of Gain Recorded into Income 2014 2013 2012
(in millions)
Fixed rate debt Interest and debt expense $ 33 $ 57 $ 37
Included in the table above is an $18 million gain from the partial settlement of the fair value hedge on the Company’s
senior notes due November 2015, as a result of redeeming $350 million of the notes in the fourth quarter of 2013.
Credit Risk
Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in
accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established
guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes
members of senior management. Key components of this program are to require preapproval of counterparties and the use
of master netting arrangements and collateral arrangements whenever practical. See Note 15 for additional information on
the Company’s credit exposure related to derivative assets.
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