Ameriprise 2008 Annual Report Download - page 111

Notes to Consolidated Financial Statements
1. Basis of Presentation
The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc. (‘‘Ameriprise
Financial’’), companies in which it directly or indirectly has a controlling financial interest, variable interest entities (‘‘VIEs’’) in
which it is the primary beneficiary and certain limited partnerships for which it is the general partner (collectively, the
‘‘Company’’).
Ameriprise Financial is a holding company, which primarily conducts business through its subsidiaries to provide financial
planning and products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset
accumulation, income, protection and estate and wealth transfer needs. The Company’s foreign operations in the United
Kingdom are conducted through its subsidiary, Threadneedle Asset Management Holdings S` arl (‘‘Threadneedle’’).
Reclassifications
The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting
principles (‘‘GAAP’’). Certain reclassifications of prior year amounts have been made to conform to the current presentation.
In the second quarter of 2008, the Company reclassified the changes in fair value of certain derivatives from net investment
income to various expense lines where the changes in fair value of the related embedded derivatives reside. The changes in
fair value of derivatives hedging variable annuity living benefits, equity indexed annuities and stock market certificates were
reclassified to benefits, claims, losses and settlement expenses, interest credited to fixed accounts and banking and deposit
interest expense, respectively.
The following table shows the impact of the reclassification made to the Company’s previously reported Consolidated
Statements of Operations:
Year Ended Year Ended
December 31, 2007 December 31, 2006
Previously Previously
Reported Reclassified Reported Reclassified
(in millions) (in millions)
Revenues
Management and financial advice fees $ 3,238 $ 3,238 $ 2,700 $ 2,700
Distribution fees 1,762 1,762 1,569 1,569
Net investment income 2,122 2,018 2,247 2,225
Premiums 1,063 1,063 1,070 1,070
Other revenues 724 724 707 707
Total revenues 8,909 8,805 8,293 8,271
Banking and deposit interest expense 255 249 273 245
Total net revenues 8,654 8,556 8,020 8,026
Expenses
Distribution expenses 2,057 2,057 1,728 1,728
Interest credited to fixed accounts 850 847 968 955
Benefits, claims, losses and settlement
expenses 1,274 1,179 1,113 1,132
Amortization of deferred acquisition costs 551 551 472 472
Interest and debt expense 112 112 101 101
Separation costs 236 236 361 361
General and administrative expense 2,558 2,558 2,480 2,480
Total expenses 7,638 7,540 7,223 7,229
Pretax income 1,016 1,016 797 797
Income tax provision 202 202 166 166
Net income $ 814 $ 814 $ 631 $ 631
The Company has reclassified certain prior year balances in the Consolidated Statements of Cash Flows related to consumer
banking loans and credit card receivables. The Company previously classified the change in these balances as an operating
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