Ameriprise 2005 Annual Report Download - page 45

The following table reconciles the Protection segment to non-GAAP supplemental information excluding AMEX Assurance.
Management believes that the presentation of financial measures excluding AMEX Assurance best reflects the underlying perform-
ance of our ongoing operations and facilitates a more meaningful 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.
Non-GAAP Supplemental Information
Protection
AMEX excluding AMEX
Protection Assurance Assurance
Years Ended Years Ended Years Ended
December 31, % December 31, December 31, %
2004 2003 Change(a) 2004 2003 2004 2003 Change(a)
(in millions, except
percentages, unaudited) (in millions, except percentages, unaudited)
Revenues
Management, financial advice and service fees $ 58 $ 44 30 % $ 4 $ 2 $ 54 $ 42 30 %
Distribution fees 105 102 3 – – 105 102 3
Net investment income 316 288 10 12 13 304 275 10
Premiums 1,023 895 14 245 219 778 676 15
Other revenues 421 404 4 (1) 1 422 403 4
Total revenues 1,923 1,733 11 260 235 1,663 1,498 11
Expenses
Compensation and benefits—field 90 79 14 2 2 88 77 14
Interest credited to account values 143 152 (6) – – 143 152 (6)
Benefits, claims, losses and settlement expenses 777 717 8 42 37 735 680 8
Amortization of deferred acquisition costs 132 268 (51) 33 29 99 239 (59)
Interest and debt expense 19 15 28 – – 19 15 28
Other expenses 274 231 19 30 32 244 199 23
Total expenses 1,435 1,462 (2) 107 100 1,328 1,362 (3)
Income before income tax provision, discontinued
operations and accounting change $ 488 $ 271 80 $153 $135 $ 335 $ 136 #
(a) Percentage change calculated using thousands.
# Variance of 100% or greater.
Ameriprise Financial, Inc. | 43
Year Ended December 31, 2004 Compared to Year Ended
December 31, 2003
Income before income tax provision, discontinued operations
and accounting change was $488 million for the year ended
December 31, 2004, compared to $271 million for the year
ended December 31, 2003. Excluding AMEX Assurance, income
before income tax provision, discontinued operations and
accounting change was $335 million in 2004 compared to
$136 million in 2003.
Revenues
Total revenues were $1.9 billion for the year ended
December 31, 2004, a $190 million increase compared to $1.7
billion for the year ended December 31, 2003. Revenues exclud-
ing AMEX Assurance increased 11% to $1.7 billion from $1.5
billion in 2003. The increase of $165 million, or 11% is primarily
due to an additional $102 million of premiums, a $29 million
increase in net investment income and a $19 million rise in
other revenues.
Net investment income increased $28 million from $288 million
for the ended December 31, 2003. Net investment income with-
out AMEX Assurance was $304 million for the year ended
December 31, 2004, an increase of $29 million, or 10% from
$275 million for the year ended December 31, 2003. The
increase was primarily driven by reduced losses on Available-for-
Sale securities and significant improvement in other net gains
and losses.
Premiums for the year ended December 31, 2004 were $1,023
million, an increase of $128 million from the year ended
December 31, 2003. Premiums excluding AMEX Assurance
were $778 million for the year ended December 31, 2004, a
$102 million, or 15% increase over the year ago period, reflect-
ing increased sales of our auto and home protection products,
primarily auto insurance sold through our Costco alliance.
Expenses
Total expenses were $1.4 billion for the year ended
December 31, 2004, a decrease of $27 million from $1.5 bil-
lion for the year ended December 31, 2003. Excluding AMEX
Assurance, total expenses were $1.3 billion in 2004, a
decrease of 3% from total expenses of $1.4 billion in 2003. The
3% decrease was primarily due to a $140 million decline in
amortization of DAC, partially offset by a $55 million increase in
benefits, claims, losses and settlement expenses and an
additional $45 million of other expenses.