Investments

12 Months Ended

Dec. 31, 2011

Investments.

Investments

5. Investments

The following is a summary of Ameriprise Financial investments:

	December 31,
	2011		2010
	(in millions)
Available-for-Sale securities, at fair value	$	34,505	$	32,619
Commercial mortgage loans, net		2,589		2,577
Policy loans		742		733
Other investments		939		826
Total	$	38,775	$	36,755

The following is a summary of net investment income:

	Year Ended December 31,
	2011			2010			2009
	(in millions)
Investment income on fixed maturities	$	1,881		$	1,920		$	1,878
Net realized gains		6			33			53
Affordable housing partnerships		(32	)		(20	)		(25	)
Other		100			101			90
Consolidated investment entities		91			275			2
Total net investment income	$	2,046		$	2,309		$	1,998

Available-for-Sale securities distributed by type were as follows:

	December 31, 2011
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI(1)
	(in millions)
Corporate debt securities	$	16,380	$	1,741	$	(81	)	$	18,040	$	—
Residential mortgage backed securities		7,440		287		(331	)		7,396		(139	)
Commercial mortgage backed securities		4,430		291		(2	)		4,719		—
Asset backed securities		1,968		61		(44	)		1,985		(15	)
State and municipal obligations		2,026		162		(58	)		2,130		—
U.S. government and agencies obligations		61		10		—			71		—
Foreign government bonds and obligations		126		19		(1	)		144		—
Common stocks		5		4		—			9		—
Other debt obligations		11		—		—			11		—
Total	$	32,447	$	2,575	$	(517	)	$	34,505	$	(154	)

	December 31, 2010
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI(1)
	(in millions)
Corporate debt securities	$	15,433	$	1,231	$	(58	)	$	16,606	$	—
Residential mortgage backed securities		7,213		368		(323	)		7,258		(117	)
Commercial mortgage backed securities		4,583		293		(8	)		4,868		—
Asset backed securities		1,982		78		(40	)		2,020		(16	)
State and municipal obligations		1,666		21		(105	)		1,582		—
U.S. government and agencies obligations		135		8		—			143		—
Foreign government bonds and obligations		91		17		—			108		—
Common stocks		6		4		—			10		—
Other debt obligations		24		—		—			24		—
Total	$	31,133	$	2,020	$	(534	)	$	32,619	$	(133	)

(1)

Represents the amount of other-than-temporary impairment losses in accumulated other comprehensive income. Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.

At both December 31, 2011 and 2010, fixed maturity securities comprised approximately 89% of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations ("NRSROs"), including Moody's Investors Service ("Moody's"), Standard & Poor's Ratings Services ("S&P") and Fitch Ratings Ltd. ("Fitch"). The Company uses the median of available ratings from Moody's, S&P and Fitch, or, if fewer than three ratings are available, the lower rating is used. When ratings from Moody's, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. At both December 31, 2011 and 2010, the Company's internal analysts rated $1.2 billion of securities, using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows:

	December 31, 2011							December 31, 2010
Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value			Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	11,510	$	12,105		35	%	$	12,142	$	12,809		39	%
AA		1,942		2,087		6			1,843		1,899		6
A		5,012		5,442		16			4,449		4,670		14
BBB		11,818		13,050		38			10,536		11,408		35
Below investment grade		2,160		1,812		5			2,157		1,823		6
Total fixed maturities	$	32,442	$	34,496		100	%	$	31,127	$	32,609		100	%

At December 31, 2011 and 2010, approximately 36% and 29%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any other issuer were greater than 10% of total equity.

The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position:

	December 31, 2011
	Less than 12 months							12 months or more							Total
Description of Securities	Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities		124	$	1,647	$	(40	)		10	$	259	$	(41	)		134	$	1,906	$	(81	)
Residential mortgage backed securities		105		1,269		(33	)		141		717		(298	)		246		1,986		(331	)
Commercial mortgage backed securities		14		182		(2	)		5		29		—			19		211		(2	)
Asset backed securities		49		543		(11	)		33		155		(33	)		82		698		(44	)
State and municipal obligations		—		—		—			53		229		(58	)		53		229		(58	)
Foreign government bonds and obligations		6		28		(1	)		—		—		—			6		28		(1	)
Total		298	$	3,669	$	(87	)		242	$	1,389	$	(430	)		540	$	5,058	$	(517	)

	December 31, 2010
	Less than 12 months							12 months or more							Total
Description of Securities	Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses			Number of Securities		Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities		115	$	1,859	$	(46	)		13	$	157	$	(12	)		128	$	2,016	$	(58	)
Residential mortgage backed securities		108		782		(12	)		133		712		(311	)		241		1,494		(323	)
Commercial mortgage backed securities		30		498		(7	)		1		23		(1	)		31		521		(8	)
Asset backed securities		29		354		(8	)		25		123		(32	)		54		477		(40	)
State and municipal obligations		206		696		(31	)		60		232		(74	)		266		928		(105	)
Total		488	$	4,189	$	(104	)		232	$	1,247	$	(430	)		720	$	5,436	$	(534	)

As part of Ameriprise Financial's ongoing monitoring process, management determined that a majority of the gross unrealized losses on its Available-for-Sale securities are attributable to movement in credit spreads.

The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Operations for other-than-temporary impairments related to credit losses on securities for which a portion of the securities' total other-than-temporary impairments was recognized in other comprehensive income:

	Years Ended December 31,
	2011			2010		2009
	(in millions)
Beginning balance	$	297		$	263	$	258
Credit losses for which an other-than-temporary impairment was not previously recognized		15			15		8
Credit losses for which an other-than-temporary impairment was previously recognized		19			19		57
Reductions for securities sold during the period (realized)		(28	)		—		(60	)
Ending balance	$	303		$	297	$	263

The change in net unrealized securities gains (losses) in other comprehensive income includes three components, net of tax: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit other-than-temporary impairment losses to credit losses and (iii) other items primarily consisting of adjustments in asset and liability balances, such as DAC, DSIC, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

The following table presents a rollforward of the net unrealized securities gains (losses) on Available-for-Sale securities included in accumulated other comprehensive income (loss):

	Net Unrealized Securities Gains (Losses)			Deferred Income Tax			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Securities Gains (Losses)
	(in millions)
Balance at January 1, 2009	$	(1,479	)	$	518		$	(961	)
Cumulative effect of accounting change		(203	)		71			(132	)(1)
Net unrealized securities gains arising during the period(3)		2,792			(977	)		1,815
Reclassification of gains included in net income		(70	)		25			(45	)
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables		(566	)		199			(367	)
Balance at December 31, 2009		474			(164	)		310	(2)
Net unrealized securities gains arising during the period(3)		828			(291	)		537
Reclassification of gains included in net income		(28	)		10			(18	)
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables		(328	)		114			(214	)
Balance at December 31, 2010		946			(331	)		615	(2)
Net unrealized securities gains arising during the period(3)		572			(196	)		376
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables		(340	)		119			(221	)
Balance at December 31, 2011	$	1,178		$	(408	)	$	770	(2)

(1)

Amount represents the cumulative effect of adopting a new accounting standard on January 1, 2009. See Note 3 for additional information on the adoption impact.

(2)

Includes $(75) million, $(66) million and $(84) million of noncredit related impairments on securities and net unrealized securities losses on previously impaired securities at December 31, 2011, 2010 and 2009, respectively.

(3)

Includes other-than-temporary impairment losses on Available-for-Sale securities related to factors other than credit that were recognized in other comprehensive income during the period.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earnings were as follows:

	Years Ended December 31,
	2011			2010			2009
	(in millions)
Gross realized gains	$	52		$	72		$	216
Gross realized losses		(18	)		(7	)		(53	)
Other-than-temporary impairments		(34	)		(37	)		(93	)

Other-than-temporary impairments for the years ended December 31, 2011 and 2010 primarily related to credit losses on non-agency residential mortgage backed securities. Other-than-temporary impairments for the year ended December 31, 2009 related to credit losses on non-agency residential mortgage backed securities, corporate debt securities primarily in the financial services and gaming industries and other structured investments.

Available-for-Sale securities by contractual maturity at December 31, 2011 were as follows:

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	975	$	992
Due after one year through five years		6,544		6,783
Due after five years through 10 years		6,408		7,125
Due after 10 years		4,677		5,496
		18,604		20,396
Residential mortgage backed securities		7,440		7,396
Commercial mortgage backed securities		4,430		4,719
Asset backed securities		1,968		1,985
Common stocks		5		9
Total	$	32,447	$	34,505

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities, as well as common and preferred stocks, were not included in the maturities distribution.