Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of assets and liabilities measured at fair value on a recurring basis

The following tables present the balances of assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis:



	December 31, 2013
	Level 1		Level 2		Level 3			Total
	(in millions)
Assets
Cash equivalents	$	12	$	1,841	$	—		$	1,853
Available-for-Sale securities:
Corporate debt securities	—		15,826		1,640			17,466
Residential mortgage backed securities	—		5,937		187			6,124
Commercial mortgage backed securities	—		2,711		30			2,741
Asset backed securities	—		1,244		260			1,504
State and municipal obligations	—		2,160		—			2,160
U.S. government and agencies obligations	17		35		—			52
Foreign government bonds and obligations	—		245		—			245
Common stocks	5		7		6			18
Total Available-for-Sale securities	22		28,165		2,123			30,310
Trading securities	3		32		2			37
Separate account assets	—		81,223		—			81,223
Other assets:
Interest rate derivative contracts	—		1,570		—			1,570
Equity derivative contracts	265		1,576		—			1,841
Credit derivative contracts	—		3		—			3
Foreign currency derivative contracts	2		2		—			4
Total other assets	267		3,151		—			3,418
Total assets at fair value	$	304	$	114,412	$	2,125		$	116,841

Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives	$	—	$	5	$	—		$	5
IUL embedded derivatives	—		—		125			125
GMWB and GMAB embedded derivatives	—		—		(575		)	(575		)	⁽²⁾
Total policyholder account balances, future policy benefits and claims	—		5		(450		)	(445		)	⁽¹⁾
Customer deposits	—		7		—			7
Other liabilities:
Interest rate derivative contracts	—		1,693		—			1,693
Equity derivative contracts	550		2,565		—			3,115
Other	—		12		—			12
Total other liabilities	550		4,270		—			4,820
Total liabilities at fair value	$	550	$	4,282	$	(450	)	$	4,382

⁽¹⁾ The Company’s adjustment for nonperformance risk resulted in a $150 million cumulative decrease to the embedded derivatives.

⁽²⁾The fair value of the GMWB and GMAB embedded derivatives was a net asset at December 31, 2013 and the amount is reported as a contra liability.



	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	18	$	1,539	$	—	$	1,557
Available-for-Sale securities:
Corporate debt securities	—		17,051		1,764		18,815
Residential mortgage backed securities	—		5,145		284		5,429
Commercial mortgage backed securities	—		3,213		206		3,419
Asset backed securities	—		1,097		178		1,275
State and municipal obligations	—		2,239		—		2,239
U.S. government and agencies obligations	19		39		—		58
Foreign government bonds and obligations	—		224		—		224
Common stocks	3		4		6		13
Other debt obligations	—		—		—		—
Total Available-for-Sale securities	22		29,012		2,438		31,472
Trading securities	1		24		—		25
Separate account assets	—		72,397		—		72,397
Other assets:
Interest rate derivative contracts	—		2,358		—		2,358
Equity derivative contracts	285		973		—		1,258
Credit derivative contracts	—		—		—		—
Foreign currency derivative contracts	—		6		—		6
Commodity derivative contracts	—		1		—		1
Total other assets	285		3,338		—		3,623
Total assets at fair value	$	326	$	106,310	$	2,438	$	109,074

Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives	$	—	$	2	$	—	$	2
IUL embedded derivatives	—		—		45		45
GMWB and GMAB embedded derivatives	—		—		833		833
Total policyholder account balances, future policy benefits and claims	—		2		878		880		⁽¹⁾
Customer deposits	—		8		—		8
Other liabilities:
Interest rate derivative contracts	—		1,486		—		1,486
Equity derivative contracts	258		1,565		—		1,823
Foreign currency derivative contracts	1		—		—		1
Other	1		3		—		4
Total other liabilities	260		3,054		—		3,314
Total liabilities at fair value	$	260	$	3,064	$	878	$	4,202

⁽¹⁾The Company’s adjustment for nonperformance risk resulted in a $398 million cumulative decrease to the embedded derivatives.

Schedule of changes in level 3 assets and liabilities measured at fair value on a recurring basis

The following tables provide a summary of changes in Level 3 assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis:



	Available-for-Sale Securities																					Policyholder Account Balances, Future Policy Benefits and Claims
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks			Total				Trading Securities		IUL Embedded Derivatives				GMWB and GMAB Embedded Derivatives				Total
	(in millions)
Balance, January 1, 2013	$	1,764		$	284		$	206		$	178		$	6		$	2,438			$	—	$	(45	)		$	(833	)		$	(878	)
Total gains (losses) included in:
Net income	(3		)	—			—			2			—			(1		)	⁽¹⁾	—		(19		)	⁽²⁾	1,617			⁽³⁾	1,598
Other comprehensive income	(41		)	—			(6		)	9			1			(37		)		—		—				—				—
Purchases	135			335			25			259			—			754				2		—				—				—
Sales	—			—			—			—			—			—				—		—				—				—
Issues	—			—			—			—			—			—				—		(62		)		(228		)		(290		)
Settlements	(215		)	(18		)	(36		)	(5		)	—			(274		)		—		1				19				20
Transfers into Level 3	—			—			—			8			—			8				—		—				—				—
Transfers out of Level 3	—			(414		)	(159		)	(191		)	(1		)	(765		)		—		—				—				—
Balance, December 31, 2013	$	1,640		$	187		$	30		$	260		$	6		$	2,123			$	2	$	(125	)		$	575			$	450

Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2013 included in:
Net investment income	$	(3	)	$	—		$	—		$	2		$	—		$	(1	)		$	—	$	—			$	—			$	—
Interest credited to fixed accounts	—			—			—			—			—			—				—		(19		)		—				(19		)
Benefits, claims, losses and settlement expenses	—			—			—			—			—			—				—		—				1,598				1,598

⁽¹⁾ Included in net investment income in the Consolidated Statements of Operations.

⁽²⁾ Included in interest credited to fixed accounts in the Consolidated Statements of Operations.

⁽³⁾ Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.



	Available-for-Sale Securities																			Policyholder Account Balances, Future Policy Benefits and Claims
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks			Total				IUL Embedded Derivatives				GMWB and GMAB Embedded Derivatives				Total
	(in millions)
Balance, January 1, 2012	$	1,355		$	215		$	50		$	189		$	5		$	1,814			$	—			$	(1,585	)		$	(1,585	)
Total gains (losses) included in:
Net income	(1		)	(45		)	1			3			—			(42		)	⁽¹⁾	8			⁽²⁾	948			⁽³⁾	956
Other comprehensive income	12			68			8			1			—			89				—				—				—
Purchases	543			309			20			—			2			874				—				—				—
Sales	—			(75		)	(19		)	(18		)	—			(112		)		—				—				—
Issues	—			—			—			—			—			—				(31		)		(188		)		(219		)
Settlements	(155		)	(56		)	(3		)	(19		)	—			(233		)		—				(8		)		(8		)
Transfers into Level 3	10			42			183			22			—			257				(22		)		—				(22		)
Transfers out of Level 3	—			(174		)	(34		)	—			(1		)	(209		)		—				—				—
Balance, December 31, 2012	$	1,764		$	284		$	206		$	178		$	6		$	2,438			$	(45	)		$	(833	)		$	(878	)

Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2012 included in:
Net investment income	$	(1	)	$	—		$	1		$	2		$	—		$	2			$	—			$	—			$	—
Interest credited to fixed accounts	—			—			—			—			—			—				8				—				8
Benefits, claims, losses and settlement expenses	—			—			—			—			—			—				—				908				908

⁽¹⁾ Included in net investment income in the Consolidated Statements of Operations.

⁽²⁾ Included in interest credited to fixed accounts in the Consolidated Statements of Operations.

⁽³⁾ Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.



	Available-for-Sale Securities																		Policyholder Account Balances, Future Policy Benefits and Claims
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks		Total				GMWB and GMAB Embedded Derivatives
	(in millions)
Balance, January 1, 2011	$	1,325		$	4,532		$	51		$	191		$	5	$	6,104			$	(421	)
Total gains (losses) included in:
Net income	7			53			—			3			—		63			⁽¹⁾	(1,007		)	⁽²⁾
Other comprehensive income	11			(118		)	—			(10		)	—		(117		)		—
Purchases	189			556			104			118			—		967				—
Sales	(51		)	(2		)	—			—			—		(53		)		—
Issues	—			—			—			—			—		—				(149		)
Settlements	(122		)	(943		)	(4		)	(29		)	—		(1,098		)		(8		)
Transfers into Level 3	7			—			1			14			—		22				—
Transfers out of Level 3	(11		)	(3,863		)	(102		)	(98		)	—		(4,074		)		—
Balance, December 31, 2011	$	1,355		$	215		$	50		$	189		$	5	$	1,814			$	(1,585	)

Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2011 included in:
Net investment income	$	—		$	(33	)	$	—		$	2		$	—	$	(31	)		$	—
Benefits, claims, losses and settlement expenses	—			—			—			—			—		—				(1,035		)

⁽¹⁾ Included in net investment income in the Consolidated Statements of Operations.

⁽²⁾ Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.

Significant unobservable inputs used in the fair value measurements

The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities:



	December 31, 2013
	Fair Value			Valuation Technique	Unobservable Input	Range				Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	1,589		Discounted cash flow	Yield/spread to U.S. Treasuries	0.9	%	–	5.3%	1.5%
IUL embedded derivatives	$	125		Discounted cash flow	Nonperformance risk⁽³⁾	74			bps
GMWB and GMAB embedded derivatives	$	(575	)	Discounted cash flow	Utilization of guaranteed withdrawals⁽¹⁾	0.0	%	–	51.1%
					Surrender rate	0.1	%	–	57.9%
					Market volatility⁽²⁾	4.9	%	–	18.8%
					Nonperformance risk⁽³⁾	74			bps
					Elective contractholder strategy allocations ⁽⁴⁾	0.0	%	–	50.0%



	December 31, 2012
	Fair Value		Valuation Technique	Unobservable Input	Range				Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	1,712	Discounted cash flow	Yield/spread to U.S. Treasuries	1.1	%	–	8.5%	2.1%
IUL embedded derivatives	$	45	Discounted cash flow	Nonperformance risk ⁽³⁾	97			bps
GMWB and GMAB embedded derivatives	$	833	Discounted cash flow	Utilization of guaranteed withdrawals ⁽¹⁾	0.0	%	–	56.4%
				Surrender rate	0.0	%	–	56.3%
				Market volatility ⁽²⁾	5.6	%	–	21.2%
				Nonperformance risk ⁽³⁾	97			bps

⁽¹⁾ The utilization of guaranteed withdrawals represents the percentage of policyholders that will begin withdrawing in any given year.

⁽²⁾ Market volatility is implied volatility of fund of funds and managed volatility funds.

⁽³⁾ The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.

⁽⁴⁾ The elective allocation represents the percentage of contractholders that are assumed to electively switch their investment allocation to a different allocation model.

Schedule of carrying value and estimated fair value of financial instruments

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value. All other financial instruments that are reported at fair value have been included above in the table with balances of assets and liabilities Ameriprise Financial measured at fair value on a recurring basis.



	December 31, 2013
	Carrying Value		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	3,510	$	—	$	—	$	3,490	$	3,490
Policy and certificate loans	774		—		1		765		766
Receivables	1,141		107		1,026		8		1,141
Restricted and segregated cash	2,360		2,360		—		—		2,360
Other investments and assets	440		—		368		73		441

Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	14,106	$	—	$	—	$	14,724	$	14,724
Investment certificate reserves	3,977		—		—		3,982		3,982
Brokerage customer deposits	3,088		3,088		—		—		3,088
Separate account liabilities	4,007		—		4,007		—		4,007
Debt and other liabilities	3,416		137		3,372		134		3,643



	December 31, 2012
	Carrying Value		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	3,609	$	—	$	—	$	3,694	$	3,694
Policy and certificate loans	754		—		2		725		727
Receivables	1,067		135		926		12		1,073
Restricted and segregated cash	2,538		2,538		—		—		2,538
Other investments and assets	390		—		333		60		393

Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	14,701	$	—	$	—	$	15,982	$	15,982
Investment certificate reserves	3,504		—		—		3,494		3,494
Brokerage customer deposits	3,024		3,024		—		—		3,024
Separate account liabilities	3,362		—		3,362		—		3,362
Debt and other liabilities	3,033		145		3,109		142		3,396

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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