Ameriprise 2011 Annual Report Download - page 74

The following table presents the changes in wrap account assets for the years ended December 31:
2011 2010
(in billions)
Beginning balance $ 97.5 $ 81.3
Net flows 7.3 7.6
Market appreciation (depreciation) and other (1.4) 8.6
Ending balance $ 103.4 $ 97.5
Wrap account assets increased $5.9 billion, or 6%, to $103.4 billion compared to the prior year due to net inflows.
Management believes that operating measures, which exclude net realized gains or losses and integration and restructuring
charges for our Advice & Wealth Management segment, best reflect the underlying performance of our core operations and
facilitate a more meaningful trend analysis. See our discussion on the use of these non-GAAP measures in the Overview
section above.
The following table presents the results of operations of our Advice & Wealth Management segment:
Years Ended December 31,
2011 2010
Less: Less:
GAAP Adjustments(1) Operating GAAP Adjustments(1) Operating Operating Change
(in millions)
Revenues
Management and financial
advice fees $ 1,590 $ — $ 1,590 $ 1,370 $ — $ 1,370 $ 220 16%
Distribution fees 1,849 — 1,849 1,696 — 1,696 153 9
Net investment income 256 (5) 261 273 1 272 (11) (4)
Other revenues 61 — 61 71 — 71 (10) (14)
Total revenues 3,756 (5) 3,761 3,410 1 3,409 352 10
Banking and deposit interest
expense 48 — 48 67 — 67 (19) (28)
Total net revenues 3,708 (5) 3,713 3,343 1 3,342 371 11
Expenses
Distribution expenses 2,203 — 2,203 1,954 — 1,954 249 13
General and administrative
expense 1,104 — 1,104 1,073 7 1,066 38 4
Total expenses 3,307 — 3,307 3,027 7 3,020 287 10
Pretax income $ 401 $ (5) $ 406 $ 316 $ (6) $ 322 $ 84 26%
(1) Adjustments include net realized gains or losses and integration and restructuring charges.
Our Advice & Wealth Management segment pretax income increased $85 million, or 27%, to $401 million for the year
ended December 31, 2011 compared to $316 million for the prior year. Our Advice & Wealth Management segment
pretax operating income, which excludes net realized gains or losses and integration and restructuring charges, increased
$84 million, or 26%, to $406 million for the year ended December 31, 2011 compared to $322 million for the prior year
due to improved advisor productivity and new client flows. Pretax margin was 10.8% for the year ended December 31,
2011 compared to 9.5% for the prior year. Pretax operating margin was 10.9% for the year ended December 31, 2011
compared to 9.6% for the prior year.
Net Revenues
Net revenues increased $365 million, or 11%, to $3.7 billion for the year ended December 31, 2011 compared to
$3.3 billion for the prior year. Operating net revenues exclude net realized gains or losses. Operating net revenues
increased $371 million, or 11%, to $3.7 billion for the year ended December 31, 2011 compared to $3.3 billion for the
prior year driven by higher management and distribution fees from growth in assets under management and increased
client activity.
Management and financial advice fees increased $220 million, or 16%, to $1.6 billion for the year ended December 31,
2011 compared to $1.4 billion for the prior year driven by growth in assets under management. Wrap account assets
increased $5.9 billion, or 6%, to $103.4 billion compared to the prior year due to net inflows.
Distribution fees increased $153 million, or 9%, to $1.8 billion for the year ended December 31, 2011 compared to
$1.7 billion for the prior year primarily driven by growth in assets under management and increased client activity.
59