4. Investments

The following is a summary of Ameriprise Financial investments:

	March 31, 2013		December 31, 2012
	(in millions)
Available-for-Sale securities, at fair value	$	31,049	$	31,472
Mortgage loans, net	3,573		3,609
Policy and certificate loans	754		754
Other investments	1,070		1,042
Total	$	36,446	$	36,877

The following is a summary of net investment income:

	Three Months Ended March 31,
	2013			2012
	(in millions)
Investment income on fixed maturities	$	401		$	457
Net realized gains (losses)	1			(2		)
Affordable housing partnerships	(7		)	(8		)
Other	17			23
Consolidated investment entities	77			61
Total net investment income	$	489		$	531

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

	March 31, 2013
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI (1)
	(in millions)
Corporate debt securities	$	16,506	$	2,037	$	(10	)	$	18,533	$	2
Residential mortgage backed securities	5,231		233		(100		)	5,364		(47		)
Commercial mortgage backed securities	2,965		258		(1		)	3,222		—
Asset backed securities	1,312		80		(2		)	1,390		—
State and municipal obligations	2,050		237		(31		)	2,256		—
U.S. government and agencies obligations	48		8		—			56		—
Foreign government bonds and obligations	185		30		—			215		—
Common stocks	7		6		—			13		2
Total	$	28,304	$	2,889	$	(144	)	$	31,049	$	(43	)

	December 31, 2012
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI (1)
	(in millions)
Corporate debt securities	$	16,628	$	2,196	$	(9	)	$	18,815	$	—
Residential mortgage backed securities	5,280		261		(112		)	5,429		(58		)
Commercial mortgage backed securities	3,120		299		—			3,419		—
Asset backed securities	1,204		75		(4		)	1,275		—
State and municipal obligations	2,034		241		(36		)	2,239		—
U.S. government and agencies obligations	49		9		—			58		—
Foreign government bonds and obligations	188		36		—			224		—
Common stocks	7		6		—			13		2
Total	$	28,510	$	3,123	$	(161	)	$	31,472	$	(56	)

(1) Represents the amount of other-than-temporary impairment (“OTTI”) 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 March 31, 2013 and December 31, 2012, fixed maturity securities comprised approximately 85% 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 March 31, 2013 and December 31, 2012, the Company’s internal analysts rated $1.6 billion and $1.7 billion, respectively, of securities, using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows:

	March 31, 2013						December 31, 2012
Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	7,239	$	7,712	25	%	$	7,462	$	8,021	26	%
AA	1,752		1,993		6		1,620		1,827		6
A	5,571		6,201		20		5,456		6,069		19
BBB	11,803		13,231		43		11,939		13,575		43
Below investment grade	1,932		1,899		6		2,026		1,967		6
Total fixed maturities	$	28,297	$	31,036	100	%	$	28,503	$	31,459	100	%

At March 31, 2013 and December 31, 2012, approximately 36% and 35%, 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:

	March 31, 2013
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	61	$	707	$	(7	)	5	$	60	$	(3	)	66	$	767	$	(10	)
Residential mortgage backed securities	56	850		(13		)	122	576		(87		)	178	1,426		(100		)
Commercial mortgage backed securities	12	123		(1		)	1	6		—			13	129		(1		)
Asset backed securities	10	115		—			4	59		(2		)	14	174		(2		)
State and municipal obligations	30	69		(2		)	8	119		(29		)	38	188		(31		)
Total	169	$	1,864	$	(23	)	140	$	820	$	(121	)	309	$	2,684	$	(144	)

	December 31, 2012
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	76	$	801	$	(6	)	6	$	70	$	(3	)	82	$	871	$	(9	)
Residential mortgage backed securities	22	408		(5		)	134	658		(107		)	156	1,066		(112		)
Asset backed securities	9	108		(1		)	5	86		(3		)	14	194		(4		)
State and municipal obligations	13	34		(1		)	8	113		(35		)	21	147		(36		)
Total	120	$	1,351	$	(13	)	153	$	927	$	(148	)	273	$	2,278	$	(161	)

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 primarily related to non-agency residential mortgage backed securities purchased prior to 2008.

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:

	Three Months Ended March 31,
	2013			2012
	(in millions)
Beginning balance	$	176		$	303
Credit losses for which an other-than-temporary impairment was previously recognized	2			5
Reductions for securities sold during the period (realized)	(13		)	(2		)
Ending balance	$	165		$	306

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, deferred sales inducement costs (“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 on Available-for-Sale securities included in accumulated other comprehensive income:

							Accumulated Other
							Comprehensive
	Net Unrealized						Income Related
	Securities			Deferred			to Net Unrealized
	Gains			Income Tax			Securities Gains
	(in millions)
Balance at January 1, 2012	$	1,350		$	(467	)	$	883
Net unrealized securities gains arising during the period (1)	127			(46		)	81
Reclassification of net securities losses included in net income	2			(1		)	1
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables	(5		)	2			(3		)
Balance at March 31, 2012	$	1,474		$	(512	)	$	962	(2)

Balance at January 1, 2013	$	2,017		$	(705	)	$	1,312
Net unrealized securities losses arising during the period (1)	(216		)	75			(141		)
Reclassification of net securities gains included in net income	(1		)	—			(1		)
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables	98			(34		)	64
Balance at March 31, 2013	$	1,898		$	(664	)	$	1,234	(2)

(1) 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.

(2) Includes $(11) million and $(67) million of noncredit related impairments on securities and net unrealized securities losses on previously impaired securities at March 31, 2013 and 2012, respectively.

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

	Three Months Ended March 31,
	2013			2012
	(in millions)
Gross realized gains	$	4		$	5
Gross realized losses	—			(1		)
Other-than-temporary impairments	(3		)	(6		)
Total	$	1		$	(2	)

Other-than-temporary impairments for the three months ended March 31, 2013 and 2012 primarily related to credit losses on non-agency residential mortgage backed securities.

Available-for-Sale securities by contractual maturity at March 31, 2013 were as follows:

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	1,777	$	1,814
Due after one year through five years	5,640		6,007
Due after five years through 10 years	6,781		7,693
Due after 10 years	4,591		5,546
	18,789		21,060
Residential mortgage backed securities	5,231		5,364
Commercial mortgage backed securities	2,965		3,222
Asset backed securities	1,312		1,390
Common stocks	7		13
Total	$	28,304	$	31,049

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 stocks, were not included in the maturities distribution.