Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information

Segment Information

16.  Segment Information

The Company’s segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other. The prior period results for the Protection and Annuities segments have been recasted due to the Company’s adoption of the new accounting standard for DAC as discussed in Note 1 and Note 2.

Prior to 2012, the Chief Operating Decision Makers received segment results prepared on a GAAP basis and on an operating basis and the Company has presented segment results in the Segment footnote on a GAAP basis. Operating results have become more relevant in how management measures segment performance and determines compensation. Accordingly, beginning in 2012, operating earnings have become the measure of segment profit or loss management uses to evaluate segment performance. The segment results for the three months and six months ended June 30, 2012 are presented on an operating basis and the prior periods have been recast.

Management uses segment operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, operating earnings is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for GAAP income from continuing operations before income tax provision. The Company believes the presentation of segment operating earnings as the Company measures it for management purposes enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis.

The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis.

Operating earnings is defined as operating net revenues less operating expenses. Operating net revenues and operating expenses exclude the results of discontinued operations and the impact of consolidating CIEs. Operating net revenues also exclude net realized gains or losses. Operating expenses exclude the market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC and DAC amortization) and integration and restructuring charges. The market impact on variable annuity guaranteed living benefits includes changes in the GMWB and GMAB embedded derivative liability values caused by changes in financial market conditions, net of changes in associated economic hedge values. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the impact on GMWB and GMAB embedded derivative liability values of discounting projected benefits to reflect a current estimate of the Company’s life insurance subsidiary’s nonperformance spread. Integration and restructuring charges primarily relate to the Company’s acquisition of the long-term asset management business of Columbia Management Group on April 30, 2010. The costs include system integration costs, proxy and other regulatory filing costs, employee reduction and retention costs and investment banking, legal and other acquisition costs. Beginning in the second quarter of 2012, integration and restructuring charges also include expenses related to the Company’s intention to transition its federal savings bank subsidiary, Ameriprise Bank, FSB, to a non-depository national trust bank by year-end 2012.

The following tables summarize selected financial information by segment and reconcile segment totals to those reported on the consolidated financial statements:

	June 30, 2012		December 31, 2011
	(in millions)
Advice & Wealth Management	$	12,715	$	12,293
Asset Management	6,181		6,863
Annuities	89,293		86,598
Protection	18,311		18,304
Corporate & Other	8,770		8,249
Total assets	$	135,270	$	132,307

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
Operating net revenues:
Advice & Wealth Management	$	953		$	957		$	1,907		$	1,870
Asset Management	707			753			1,418			1,490
Annuities	628			665			1,256			1,308
Protection	528			522			1,050			1,038
Corporate & Other	7			22			15			16
Eliminations (1) (2)	(305		)	(327		)	(617		)	(636		)
Total segment operating revenues	2,518			2,592			5,029			5,086
Net realized gains (losses)	(5		)	6			(7		)	7
Revenues of CIEs	1			25			53			62
Total net revenues per consolidated statements of operations	$	2,514		$	2,623		$	5,075		$	5,155

(1) Represents the elimination of intersegment revenues recognized for the three months ended June 30, 2012 and 2011 in each segment as follows: Advice & Wealth Management ($218 and $242, respectively); Asset Management ($12 and $11, respectively); Annuities ($66 and $64, respectively); Protection ($9 and $9, respectively); and Corporate & Other (nil and $1, respectively).

(2) Represents the elimination of intersegment revenues recognized for the six months ended June 30, 2012 and 2011 in each segment as follows: Advice & Wealth Management ($447 and $474, respectively); Asset Management ($22 and $21, respectively); Annuities ($129 and $122, respectively); Protection ($18 and $18, respectively); and Corporate & Other ($1 and $1, respectively).

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
Operating earnings:
Advice & Wealth Management	$	111		$	108		$	205		$	207
Asset Management	130			146			261			282
Annuities	116			154			305			326
Protection	109			92			216			203
Corporate & Other	(67		)	(41		)	(132		)	(106		)
Total segment operating earnings	399			459			855			912
Net realized gains (losses)	(5		)	6			(7		)	7
Net loss attributable to noncontrolling interests	(53		)	(28		)	(49		)	(46		)
Market impact on variable annuity living benefits, net of hedges, DSIC and DAC amortization	(16		)	(7		)	(129		)	(28		)
Integration and restructuring charges	(26		)	(21		)	(49		)	(50		)
Income from continuing operations before income tax provision per consolidated statements of operations	$	299		$	409		$	621		$	795