Ameriprise 2005 Annual Report Download - page 44

42 |Ameriprise Financial, Inc.
Year Ended December 31, 2005 Compared to Year Ended
December 31, 2004
Income before income tax provision, discontinued operations
and accounting change was $420 million for the year ended
December 31, 2005, compared to $488 million a year ago.
Excluding AMEX Assurance, income before income tax provi-
sion, discontinued operations and accounting change was
$338 million in 2005 compared to $335 million in 2004.
Revenues
Total revenues of $1.9 billion increased $23 million from
$1.9 billion in the year ago period. Revenues excluding AMEX
Assurance were $1.8 billion in 2005, an increase of
$145 million, or 9% over revenues of $1.7 billion in 2004.
The 9% increase is primarily due to an additional $96 million
related to premiums, a $24 million increase in net investment
income and a $14 million rise in other revenues.
Net investment income increased $21 million from $316 million
for the year ended December 31, 2004. Net investment income
excluding AMEX Assurance rose $24 million, or 8%, primarily
due to higher average invested assets.
Premiums of $1,001 million for the year ended December 31,
2005 decreased $22 million from $1,023 million in the year ago
period. Premiums excluding AMEX Assurance were $874 million
in 2005, an increase of $96 million, or 12%, primarily due to a
$71 million rise in premiums from auto and home insurance
products.
Other revenues increased $14 million, or 4% as a result of a
$13 million increase in the cost of insurance on higher average
variable and fixed universal life policies in force.
Expenses
Total expenses of $1.5 billion increased $91 million from
$1.4 billion in the year ended December 31, 2004. Excluding
AMEX Assurance, total expenses increased 11% to $1.5 billion
in 2005 from $1.3 billion in 2004. The increase of $142 million,
or 11% is due to a $121 million rise in benefits, claims, losses
and settlement expenses and a $22 million increase in other
expenses.
Compensation and benefits—field increased by $36 million to
$126 million in 2005 compared to $90 million in 2004.
Compensation and benefits—field excluding AMEX Assurance
increased 3% to $89 million in 2005 from $88 million in 2004.
Benefits, claims, losses and settlement expenses were
$844 million in 2005, an increase of $67 million over 2004.
Excluding AMEX Assurance, these expenses rose $121 million,
or 17% to $856 million in 2005 from $735 million in 2004.
The increase primarily included a $69 million increase due to
higher average auto and home insurance policies in force, a
$17 million increase due to higher life insurance in force levels,
and a $13 million increase in the expense for future policy ben-
efits in 2005 related to the inclusion of an explicit maintenance
reserve for long-term care insurance.
Amortization of DAC was $108 million in 2005 compared to
$132 million in 2004. Amortization of DAC excluding AMEX
Assurance was $91 million in 2005 compared to $99 million
in 2004. DAC amortization in 2005 was reduced by $53 mil-
lion as a result of the annual DAC assessment performed in
the third quarter, while DAC amortization in 2004 was reduced
by $23 million in the first quarter as a result of lengthening
amortization periods on certain life insurance products in con-
junction with our adoption of SOP 03-1 and by $16 million as a
result of the annual DAC assessment in the third quarter.