Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information

Segment Information

25. Segment Information

The Company's segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other. Each segment records revenues and expenses as if they were each a stand-alone business using the Company's transfer pricing methodology. Transfer pricing uses rates that approximate market-based arm's length prices for specific services provided. The Company reviews the transfer pricing rates periodically and makes appropriate adjustments to ensure the transfer pricing rates that approximate arm's length market prices remain at current market levels. Costs related to shared services are allocated to segments based on their usage of the services provided.

The largest source of intersegment revenues and expenses is retail distribution services, where segments are charged transfer pricing rates that approximate arm's length market prices for distribution through the Advice & Wealth Management segment. The Advice & Wealth Management segment provides distribution services for affiliated and non-affiliated products and services. The Asset Management segment provides investment management services for the Company's owned assets and client assets, and accordingly charges investment and advisory management fees to the other segments.

All costs related to shared services are allocated to the segments based on a rate times volume or fixed basis.

The Advice & Wealth Management segment provides financial planning and advice, as well as full service brokerage and banking services, primarily to retail clients through the Company's affiliated advisors. The Company's affiliated advisors have access to a diversified selection of both affiliated and non-affiliated products to help clients meet their financial needs. A significant portion of revenues in this segment is fee-based, driven by the level of client assets, which is impacted by both market movements and net asset flows. The Company also earns net investment income on invested assets primarily from certificate and banking products. This segment earns revenues (distribution fees) for distributing non-affiliated products and earns intersegment revenues (distribution fees) for distributing the Company's affiliated products and services provided to its retail clients. Intersegment expenses for this segment include expenses for investment management services provided by the Asset Management segment.

The Asset Management segment provides investment advice and investment products to retail and institutional clients. Columbia Management Investment Advisers, LLC ("Columbia" or "Columbia Management") predominantly provides U.S. domestic products and services and Threadneedle predominantly provides international investment products and services. Columbia retail products are provided through unaffiliated third party financial institutions and through the Advice & Wealth Management segment. Institutional products and services are primarily sold through the Company's institutional sales force. Threadneedle retail products are primarily provided through third parties. Retail products include mutual funds and variable product funds underlying insurance and annuity separate accounts. Institutional asset management services are designed to meet specific client objectives and may involve a range of products including those that focus on traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds and property funds. Revenues in this segment are primarily earned as fees based on managed asset balances, which are impacted by both market movements and net asset flows. In addition to the products and services provided to third party clients, management teams serving our Asset Management segment provide all intercompany asset management services. The fees for all such services are reflected within the Asset Management segment results through intersegment transfer pricing. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management, Annuities and Protection segments.

The Annuities segment provides variable and fixed annuity products of RiverSource Life companies to retail clients. Prior to the fourth quarter of 2010, the Company's variable annuity products were provided through both affiliated and unaffiliated advisors through third-party distribution. During the fourth quarter of 2010, the Company discontinued new sales of its variable annuities in non-Ameriprise channels to further strengthen the risk and return characteristics of the business. The Company's fixed annuity products are provided through affiliated advisors as well as unaffiliated advisors through third-party distribution. Revenues for the Company's variable annuity products are primarily earned as fees based on underlying account balances, which are impacted by both market movements and net asset flows. Revenues for the Company's fixed annuity products are primarily earned as net investment income on invested assets supporting fixed account balances, with profitability significantly impacted by the spread between net investment income earned and interest credited on the fixed account balances. The Company also earns net investment income on invested assets supporting reserves for immediate annuities and for certain guaranteed benefits offered with variable annuities and on capital supporting the business. Intersegment revenues for this segment reflect fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource Variable Series Trust, Columbia Funds Variable Insurance Trust, Columbia Funds Variable Insurance Trust I and Wanger Advisors Trust funds under the variable annuity contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment.

The Protection segment offers a variety of protection products to address the protection and risk management needs of the Company's retail clients including life, DI and property-casualty insurance. Life and DI products are primarily provided through the Company's affiliated advisors. The Company's property-casualty products are provided direct, primarily through affinity relationships. The Company issues insurance policies through its life insurance subsidiaries and the property casualty companies. The primary sources of revenues for this segment are premiums, fees, and charges that the Company receives to assume insurance-related risk. The Company earns net investment income on invested assets supporting insurance reserves and capital supporting the business. The Company also receives fees based on the level of assets supporting VUL separate account balances. This segment earns intersegment revenues from fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource Variable Series Trust, Columbia Funds Variable Insurance Trust, Columbia Funds Variable Insurance Trust I and Wanger Advisors Trust funds under the VUL contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment.

The Corporate & Other segment consists of net investment income or loss on corporate level assets, including excess capital held in the Company's subsidiaries and other unallocated equity and other revenues as well as unallocated corporate expenses. The Corporate & Other segment also includes revenues and expenses of consolidated investment entities.

The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany revenues and expenses, which are eliminated in consolidation.

The following is a summary of assets by segment:

	December 31,
	2011		2010
	(in millions)
Advice & Wealth Management	$	12,293	$	11,241
Asset Management		6,863		7,854
Annuities		87,266		84,836
Protection		18,915		18,571
Corporate & Other		8,649		8,539
Assets held for sale		—		173
Total assets	$	133,986	$	131,214

The following is a summary of segment results:

	Year Ended December 31, 2011
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Eliminations			Consolidated
	(in millions)
Revenue from external customers	$	2,825	$	2,811	$	2,379	$	2,035	$	189		$	—		$	10,239
Intersegment revenue		931		92		252		38		2			(1,315	)		—
Total revenues		3,756		2,903		2,631		2,073		191			(1,315	)		10,239
Banking and deposit interest expense		48		3		—		1		(1	)		(4	)		47
Net revenues		3,708		2,900		2,631		2,072		192			(1,311	)		10,192
Depreciation and amortization expense		86		83		481		208		29			—			887
All other expenses		3,221		2,381		1,629		1,494		506			(1,311	)		7,920
Total expenses		3,307		2,464		2,110		1,702		535			(1,311	)		8,807
Income (loss) from continuing operations before income tax provision	$	401	$	436	$	521	$	370	$	(343	)	$	—		$	1,385
Income tax provision																355
Income from continuing operations																1,030
Loss from discontinued operations, net of tax																(60	)
Net income																970
Less: Net loss attributable to noncontrolling interests																(106	)
Net income attributable to Ameriprise Financial															$	1,076

	Year Ended December 31, 2010
	Advice & Wealth Management		Asset Management		Annuities			Protection		Corporate & Other			Eliminations			Consolidated
	(in millions)
Revenue from external customers	$	2,526	$	2,294	$	2,324		$	2,013	$	425		$	—		$	9,582
Intersegment revenue		884		75		176			35		1			(1,171	)		—
Total revenues		3,410		2,369		2,500			2,048		426			(1,171	)		9,582
Banking and deposit interest expense		67		1		—			1		3			(2	)		70
Net revenues		3,343		2,368		2,500			2,047		423			(1,169	)		9,512
Depreciation and amortization expense		88		105		(75	)		189		23			—			330
All other expenses		2,939		1,945		1,927			1,455		451			(1,169	)		7,548
Total expenses		3,027		2,050		1,852			1,644		474			(1,169	)		7,878
Income (loss) from continuing operations before income tax provision	$	316	$	318	$	648		$	403	$	(51	)	$	—		$	1,634
Income tax provision																	350
Income from continuing operations																	1,284
Loss from discontinued operations, net of tax																	(24	)
Net income																	1,260
Less: Net income attributable to noncontrolling interests																	163
Net income attributable to Ameriprise Financial																$	1,097

	Year Ended December 31, 2009
	Advice & Wealth Management			Asset Management		Annuities		Protection		Corporate & Other			Eliminations			Consolidated
	(in millions)
Revenue from external customers	$	2,103		$	1,304	$	2,165	$	1,935	$	31		$	—		$	7,538
Intersegment revenue		834			44		100		30		2			(1,010	)		—
Total revenues		2,937			1,348		2,265		1,965		33			(1,010	)		7,538
Banking and deposit interest expense		133			2		—		1		7			(2	)		141
Net revenues		2,804			1,346		2,265		1,964		26			(1,008	)		7,397
Depreciation and amortization expense		100			83		54		167		31			—			435
All other expenses		2,737			1,203		1,563		1,300		247			(1,008	)		6,042
Total expenses		2,837			1,286		1,617		1,467		278			(1,008	)		6,477
Income (loss) from continuing operations before income tax provision	$	(33	)	$	60	$	648	$	497	$	(252	)	$	—		$	920
Income tax provision																	184
Income from continuing operations																	736
Income from discontinued operations, net of tax																	1
Net income																	737
Less: Net income attributable to noncontrolling interests																	15
Net income attributable to Ameriprise Financial																$	722