Ameriprise 2014 Annual Report Download - page 181

Accumulated earnings of certain foreign subsidiaries, which totaled $180 million at December 31, 2014, are intended to
be permanently reinvested outside the United States. Accordingly, U.S. federal taxes, which would have aggregated
$40 million, have not been provided on those earnings.
In December 2014, the Company received IRS approval for a change in accounting method related to variable annuity
hedging. Accordingly, the Company began using the approved method of accounting in the fourth quarter of 2014. The
change to the approved method increased deferred tax expense and current tax receivables with a corresponding decrease
to current tax expense and deferred tax assets of approximately $300 million.
Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for
GAAP reporting versus income tax return purposes. The significant components of the Company’s deferred income tax
assets and liabilities, which are included net within other assets or other liabilities on the Consolidated Balance Sheets,
were as follows:
December 31,
2014 2013
(in millions)
Deferred income tax assets
Liabilities for policyholder account balances, future policy benefits and claims $ 1,292 $ 918
Deferred compensation 350 335
Investment related 83 724
Loss carryovers and tax credit carryforwards 25 39
Other 102 61
Gross deferred income tax assets 1,852 2,077
Less: valuation allowance 20 19
Total deferred income tax assets 1,832 2,058
Deferred income tax liabilities
Deferred acquisition costs 738 749
Net unrealized gains on Available-for-Sale securities 424 352
Depreciation expense 131 138
Deferred sales inducement costs 128 145
Intangible assets 96 84
Other 101 113
Gross deferred income tax liabilities 1,618 1,581
Net deferred income tax assets $ 214 $ 477
Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $25 million,
net of federal benefit, which will expire beginning December 31, 2015. Based on analysis of the Company’s tax position,
management believes it is more likely than not that the Company will not realize certain state deferred tax assets and
state net operating losses and therefore a valuation allowance has been established.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows:
2014 2013 2012
(in millions)
Balance at January 1 $ 209 $ 116 $ 184
Additions based on tax positions related to the current year 17 22 2
Additions for tax positions of prior years 35 74 25
Reductions for tax positions of prior years (19) (3) (83)
Settlements — — (12)
Balance at December 31 $ 242 $ 209 $ 116
If recognized, approximately $57 million, $62 million and $38 million, net of federal tax benefits, of unrecognized tax
benefits as of December 31, 2014, 2013, and 2012, 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 $170 million to
$180 million in the next 12 months due to resolution of 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 increase of $6 million, and a net reduction of
$1 million in interest and penalties for the years ended December 31, 2014, 2013, and 2012, respectively. At
December 31, 2014 and 2013, the Company had a payable of $48 million and $42 million, respectively, related to
accrued interest and penalties.
162