Ameriprise 2009 Annual Report Download - page 80

The total pretax impacts on our revenues and expenses for the year ended December 31, 2007 attributable to the review of valuation
assumptions for products of RiverSource Life companies and the impact of markets on DAC and DSIC amortization and variable annuity
living benefit riders, net of hedges were as follows:
Benefits,
Claims, Losses
Other Distribution and Settlement Amortization
Segment Pretax Benefit (Charge) Premiums Revenues Expenses Expenses of DAC Total
(in millions)
Annuities $ — $ — $ — $ (38) $ 27 $ (11)
Protection — (2) — (9) (20) (31)
Total $ — $ (2) $ — $ (47) $ 7 $ (42)
Net revenues
Our decrease in net revenues is primarily attributable to the decline in equity markets and related credit market events.
Management and financial advice fees decreased $339 million, or 10%, to $2.9 billion in 2008 compared to $3.2 billion in 2007. Total
client assets as of December 31, 2008 were $241.4 billion compared to $293.9 billion as of December 31, 2007, a decrease of $52.5 billion,
or 18%. Wrap account assets decreased $21.1 billion, or 22%, due to weak equity markets in 2008, partially offset by inflows and an
increase in assets of $2.0 billion related to our acquisition of H&R Block Financial Advisors, Inc. in the fourth quarter of 2008. Market
depreciation on wrap account assets was $26.8 billion during 2008 compared to market appreciation of $5.8 billion during 2007. Net
inflows in wrap accounts decreased to $3.7 billion in 2008 from $11.7 billion in 2007. Total managed assets decreased $104.3 billion, or
28%, primarily due to market depreciation and net outflows in Domestic and International funds and a $28.6 billion decrease in
International managed assets in 2008 due to the impact of changes in foreign currency exchange rates, partially offset by an increase in
assets of $12.8 billion related to our acquisition of Seligman.
Distribution fees decreased $197 million, or 11%, to $1.6 billion in 2008 compared to $1.8 billion in 2007 primarily due to the impact of
market depreciation on asset based fees and decreased sales volume due to a shift in client behavior away from traditional investment
activity.
Net investment income decreased $1.2 billion, or 59%, to $817 million in 2008 compared to $2.0 billion in 2007. Included in net
investment income for 2008 were $757 million of net realized investment losses on Available-for-Sale securities, primarily consisting of
other-than-temporary impairments, compared to net realized investment gains on Available-for-Sale securities of $44 million in 2007.
Also contributing to the decrease in net investment income was a loss of $88 million on trading securities in 2008 compared to a gain of
$3 million in 2007 and a $224 million decrease in investment income earned on fixed maturity securities primarily from declining
average balances in fixed annuities and increased holdings of cash and cash equivalents. Investment income on fixed maturities was
$1.6 billion in 2008 compared to $1.8 billion in 2007.
Premiums increased $31 million, or 3%, to $1.0 billion in 2008 primarily due to a 6% year-over-year increase in auto and home policy
counts and a 9% increase in traditional life insurance in force. Traditional life insurance in force increased $6.6 billion to $77.4 billion in
2008 compared to $70.8 billion in 2007.
Other revenues increased $42 million, or 6%, to $766 million in 2008 compared to $724 million in 2007 primarily due to a $95 million
benefit from updating valuation assumptions and converting to a new valuation system for products of RiverSource Life companies in the
third quarter of 2008. Also, in the fourth quarter of 2008, we extinguished $43 million of our junior notes and recognized a gain of
$19 million. Other revenues in 2008 included $36 million from the sale of certain operating assets. Other revenues in 2007 included
$25 million of additional proceeds related to the sale of our defined contribution recordkeeping business in 2006 and $68 million from
unwinding a variable interest entity.
Banking and deposit interest expense decreased $70 million to $179 million in 2008 compared to $249 million in 2007 due to lower
crediting rates accrued on certificates.
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