Ameriprise 2005 Annual Report Download - page 34

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The following table reconciles the GAAP consolidated statements of income to the non-GAAP supplemental information, which
excludes AMEX Assurance, and the non-GAAP presentation of separation costs. Management believes that the presentation of these
non-GAAP financial measures, which excludes discontinued operations, cumulative effect of accounting change, AMEX Assurance
and non-recurring separation costs best reflects the underlying performance of our ongoing operations and facilitates a more mean-
ingful trend analysis. The AMEX Assurance travel insurance and card related business was ceded to American Express effective
July 1, 2005 and was deconsolidated on a U.S. GAAP basis effective September 30, 2005.
GAAP Non-GAAP Supplemental Information
Consolidated Non-GAAP
Statements of AMEX Supplemental
Income Assurance Information
Years Ended Years Ended Separation Years Ended
December 31, % December 31, Costs December 31, %
2005 2004 Change(a) 2005(b) 2004 2005 2005 2004 Change(a)
(in millions, except percentages) (in millions, except percentages, unaudited)
Revenues
Management, financial advice and
service fees $2,578 $2,248 15 % $3$4 $ $2,575 $2,244 15 %
Distribution fees 1,150 1,101 4 – – 1,150 1,101 4
Net investment income 2,241 2,137 5 912 2,232 2,125 5
Premiums 979 1,023 (4) 127 245 852 778 10
Other revenues 536 518 4 (1) (1) 537 519 4
Total revenues 7,484 7,027 7 138 260 7,346 6,767 9
Expenses
Compensation and benefits:
Field 1,515 1,332 14 37 21,478 1,330 11
Non-field 1,135 956 19 – – 1,135 956 19
Total compensation and benefits 2,650 2,288 16 37 22,613 2,286 14
Interest credited to account values 1,310 1,268 3 ––1,310 1,268 3
Benefits, claims, losses and
settlement expenses 880 828 6 (12) 42 892 786 13
Amortization of deferred acquisition
costs 431 437 (1) 17 33 414 404 2
Interest and debt expense 73 52 40 – – 73 52 40
Separation costs 293 – – – – 293 – – –
Other expenses 1,102 1,042 6 14 30 1,088 1,012 8
Total expenses 6,739 5,915 14 56 107 293 6,390 5,808 10
Income before income tax provision,
discontinued operations and
accounting change 745 1,112 (33) 82 153 (293) 956 959 –
Income tax provision 187 287 (35) 26 51 (102) 263 236 12
Income before discontinued
operations and accounting change 558 825 (32) $56 $102 $(191) $ 693 $ 723 (4)
Discontinued operations, net of tax 16 40 (60)
Cumulative effect of accounting
change, net of tax – (71) #
Net income $ 574 $ 794 (28)
(a) Percentage change calculated using thousands.
(b) For the year ended December 31, 2005, AMEX Assurance premiums include $10 million in intercompany revenues related to errors and omissions coverage.
# Variance of 100% or greater.
32 |Ameriprise Financial, Inc.