Ameriprise 2008 Annual Report Download - page 83
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Corporate & Other
The following table presents the results of operations of our Corporate & Other segment for the years ended December 31, 2008
and 2007:
Years Ended December 31,
2008 2007 Change
(in millions, except percentages)
Revenues
Management and financial advice fees $ — $ 1 $ (1) NM
Net investment income (25) 22 (47) NM
Other revenues 26 7 19 NM
Total revenues 1 30 (29) (97) %
Banking and deposit interest expense 2 6 (4) (67)
Total net revenues (1) 24 (25) NM
Expenses
Distribution expenses 1 1 — —
Interest and debt expense 109 112 (3) (3)
Separation costs — 236 (236) NM
General and administrative expense 253 159 94 59
Total expenses 363 508 (145) (29)
Pretax loss $ (364) $ (484) $ 120 25 %
NM Not Meaningful.
Our Corporate & Other segment pretax loss in 2008 was $364 million, an improvement of $120 million compared to a pretax loss
of $484 million in 2007. The improvement was primarily due to a decrease in separation costs of $236 million, as the separation
from American Express was completed in 2007. Other revenues increased $19 million primarily due to recognizing a gain from
extinguishing $43 million of our junior notes in the fourth quarter of 2008. These positive impacts were offset by a $47 million
decrease in net investment income and a $94 million increase in general and administrative expense. The decrease in net
investment income was primarily due to lower investment income on fixed maturities and lower income on seed money investments
and other investments. The increase in general and administrative expense was driven by a $77 million expense related to changes
in fair value of Lehman Brothers securities that we purchased from various 2a-7 money market mutual funds managed by
RiverSource Investments, expense of $36 million for the cost of guaranteeing specific client holdings in an unaffiliated money
market mutual fund and $60 million in restructuring charges. Partially offsetting these increases in general and administrative
expense were decreases related to our expense reduction initiatives and lower incentive compensation accruals.
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