Ameriprise 2006 Annual Report Download - page 103

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The AA&I segment offers products and services, both the
Company’s and other companies’, to help the Company’s retail
clients address identified financial objectives related to asset
accumulation and income management. Products and services
in this segment are related to asset management, brokerage
and banking, and include mutual funds, wrap accounts,
variable and fixed annuities, brokerage accounts and investment
certificates. This operating segment also serves institutional
clients by providing investment management services in
separately managed accounts, sub-advisory and alternative
investments. The Company earns revenues in this segment
primarily through fees it receives based on managed assets
and annuity separate account assets. These fees are
impacted by both market movements and net asset flows.
The Company also earns net investment income on owned
assets, principally supporting the fixed annuity and certificate
businesses and capital supporting the business, and distribu-
tion fees on sales of mutual funds and other products. This
segment includes the results of SAFC, which through its
operating subsidiary, SAI, operates its own separately
branded distribution network.
The Protection segment offers a variety of protection products,
both the Company’s and other companies’, including life, dis-
ability income, long term care and auto and home insurance to
address the identified protection and risk management needs
of the Company’s retail clients. The Company earns revenues
in this operating segment primarily through premiums, fees
and charges that the Company receives to assume insurance-
related risk, fees the Company receives on assets supporting
variable universal life separate account balances and net
investment income on owned assets supporting insurance
reserves and capital supporting the business.
The Corporate segment consists of income derived from financial
planning fees, investment income on corporate level assets
including unallocated equity and unallocated corporate expenses.
This segment also includes non-recurring separation costs.
The accounting policies of the segments are the same as
those of the Company, except for the method of capital
allocation and the accounting for gains (losses) from
intercompany revenues and expenses, which are eliminated in
consolidation. The Company allocates capital to each segment
based upon an internal capital allocation method that allows
the Company to more efficiently manage its capital. The Company
evaluates the performance of each segment based on income
before income tax provision, discontinued operations and
accounting change. The Company allocates certain non-recurring
items, such as separation costs, to the Corporate segment.
The following is a summary of assets by segment:
December 31,
2006 2005
(in millions)
Asset Accumulation and Income $ 83,308 $ 75,382
Protection 17,360 14,492
Corporate and Other 3,504 3,247
Total assets $ 104,172 $ 93,121
101
Ameriprise Financial, Inc. 2006 Annual Report
The following is a summary of segment operating results:
Asset
Accumulation Corporate and
and Income Protection Other Eliminations Consolidated
Year Ended December 31, 2006
(in millions)
Revenue from external customers $ 5,909 $ 1,947 $ 284 $ — $ 8,140
Intersegment revenue 19 22 — (41) —
Total revenues 5,928 1,969 284 (41) 8,140
Amortization expense(1) 407 133 — — 540
All other expenses 4,630 1,413 801 (41) 6,803
Total expenses 5,037 1,546 801 (41) 7,343
Income (loss) before income tax provision $ 891 $ 423 $ (517) $ — 797
Income tax provision 166
Net income $ 631