Ameriprise 2010 Annual Report Download - page 78

The following table presents the results of operations of our Annuities segment:
Years Ended December 31,
2010 2009
Less: Less:
GAAP Adjustments(1) Operating GAAP Adjustments(1) Operating Operating Change
(in millions, except percentages)
Revenues
Management and financial advice
fees $ 546 $ — $ 546 $ 438 $ — $ 438 $ 108 25%
Distribution fees 284 — 284 247 — 247 37 15
Net investment income 1,318 9 1,309 1,323 44 1,279 30 2
Premiums 150 — 150 104 — 104 46 44
Other revenues 202 — 202 153 — 153 49 32
Total revenues 2,500 9 2,491 2,265 44 2,221 270 12
Banking and deposit interest
expense — — — — — — — —
Total net revenues 2,500 9 2,491 2,265 44 2,221 270 12
Expenses
Distribution expenses 268 — 268 211 — 211 57 27
Interest credited to fixed accounts 762 — 762 759 — 759 3 —
Benefits, claims, losses and
settlement expenses 691 — 691 418 — 418 273 65
Amortization of deferred acquisition
costs (76) — (76) 37 — 37 (113) NM
Interest and debt expense 2 — 2 — — — 2 NM
General and administrative expense 205 — 205 192 — 192 13 7
Total expenses 1,852 — 1,852 1,617 — 1,617 235 15
Pretax income $ 648 $ 9 $ 639 $ 648 $ 44 $ 604 $ 35 6%
NM Not Meaningful.
(1) Adjustments include net realized gains or losses.
Our Annuities segment pretax income was $648 million for both 2010 and 2009. Our Annuities segment pretax operating
income, which excludes net realized gains or losses, increased $35 million, or 6%, to $639 million for the year ended
December 31, 2010 compared to $604 million in the prior year.
Net Revenues
Net revenues increased $235 million, or 10%, to $2.5 billion for the year ended December 31, 2010 compared to
$2.3 billion for the prior year. Operating net revenues, which exclude net realized gains or losses, increased $270 million,
or 12%, to $2.5 billion for the year ended December 31, 2010 compared to $2.2 billion for the prior year reflecting
increased management fees from higher separate account balances, increased premiums from immediate annuities with
life contingencies and higher fees from variable annuity guarantees.
Management and financial advice fees increased $108 million, or 25%, to $546 million for the year ended December 31,
2010 compared to $438 million for the prior year due to higher fees on variable annuities driven by higher separate
account balances. Average variable annuities contract accumulation values increased $10.3 billion, or 25%, from the prior
year due to higher equity market levels and net inflows. Variable annuity net inflows during 2010 were $1.2 billion driven
by our introduction in the third quarter of a new variable annuity in the Ameriprise channel, RAVA 5, and an updated
guaranteed minimum withdrawal benefit rider in the Ameriprise and third-party channels.
Distribution fees increased $37 million, or 15%, to $284 million for the year ended December 31, 2010 compared to
$247 million for the prior year primarily due to higher fees on variable annuities driven by higher separate account
balances.
Net investment income decreased $5 million to $1.3 billion for the year ended December 31, 2010. Operating net
investment income, which excludes net realized gains or losses, increased $30 million, or 2%, to $1.3 billion for the year
ended December 31, 2010, primarily driven by higher fixed annuity account balances and higher investment yields,
partially offset by the negative impact of the implementation of changes to the PN program. With these changes, assets of
clients participating in the PN program were reallocated, pursuant to their consent. This reallocation in part resulted in a
shift of assets from interest bearing investments in the general account into separate accounts.
Premiums increased $46 million, or 44%, to $150 million for the year ended December 31, 2010 compared to
$104 million for the prior year due to higher sales of immediate annuities with life contingencies.
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