Ameriprise 2015 Annual Report Download - page 203

Schedule I — Condensed Financial Information of Registrant
Notes to Condensed Financial Information of Registrant
(Parent Company Only)
1. Basis of Presentation
The accompanying Condensed Financial Statements include the accounts of Ameriprise Financial, Inc. (the ‘‘Registrant,’’
‘‘Ameriprise Financial’’ or ‘‘Parent Company’’) and, on an equity basis, its subsidiaries and affiliates. The appropriated
retained earnings of consolidated investment entities are not included on the Parent Company Only Condensed Financial
Statements. The financial statements have been prepared in accordance with U.S. generally accepted accounting
principles. The financial information of the Parent Company should be read in conjunction with the Consolidated Financial
Statements and Notes of Ameriprise Financial. Parent Company revenues and expenses, other than compensation and
benefits and debt and interest expense, are primarily related to intercompany transactions with subsidiaries and affiliates.
The change in the fair value of derivative instruments used as hedges is reflected in the Parent Company Only Condensed
Statements of Operations. For certain of these derivatives, the change in the hedged item is reflected in the subsidiaries’
Statements of Operations. The change in fair value of derivatives used to hedge asset-based distribution fees is included in
distribution fees, while the underlying distribution fee revenue is reflected in equity in earnings of subsidiaries. The change
in fair value of derivatives used to economically hedge exposure to equity price risk of Ameriprise Financial, Inc. common
stock granted as part of the Ameriprise Financial Franchise Advisor Deferred Compensation Plan is included in distribution
expenses, while the underlying distribution expenses are reflected in equity in earnings of subsidiaries. The change in fair
value of certain derivatives used to economically hedge risk related to GMWB provisions is included in benefits, claims,
losses and settlement expenses, while the underlying benefits, claims, losses and settlement expenses are reflected in
equity in earnings of subsidiaries.
In the fourth quarter of 2015, the Parent Company recorded a capital lease that had previously been incorrectly recorded
as an operating lease for Ameriprise Financial Center. The cumulative adjustment included a capital lease asset of
$70 million, net of accumulated depreciation, and a related capital lease obligation of $60 million and a $10 million
increase in pretax income. The impact to the prior period financial statements was not material. The lease term for
Ameriprise Financial Center began in November 2000 and extends for 20 years, with several options to extend the term.
2. Discontinued Operations
The results of Securities America Financial Corporation and its subsidiaries (collectively, ‘‘Securities America’’) have been
presented as discontinued operations for all prior periods presented. The Company completed the sale of Securities
America in the fourth quarter of 2011.
3. Debt
All of the debt of Ameriprise Financial is borrowings of the Parent Company, except as indicated below.
• At both December 31, 2015 and 2014, the debt of Ameriprise Financial included $50 million of repurchase
agreements, which are accounted for as secured borrowings.
• At both December 31, 2015 and 2014, Ameriprise Financial had $150 million of borrowings from the Federal Home
Loan Bank of Des Moines, which is collateralized with commercial mortgage backed securities.
4. Borrowings from Subsidiaries
The Parent Company has intercompany lending arrangements with its subsidiaries. At the end of each business day, taking
into consideration all legal and regulatory requirements associated with its subsidiaries, Ameriprise Financial is entitled to
draw on all funds in specified bank accounts. Repayment of all or a portion of the funds is due on demand. The Parent
Company also has revolving credit agreements with its subsidiaries as the borrower aggregating $1.0 billion as of
December 31, 2015, of which nil was outstanding.
5. Guarantees, Commitments and Contingencies
The Parent Company is the guarantor for operating leases of IDS Property Casualty Insurance Company and certain other
subsidiaries.
All consolidated legal, regulatory and arbitration proceedings, including class actions of Ameriprise Financial, Inc. and its
consolidated subsidiaries are potential or current obligations of the Parent Company.
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