Ameriprise 2012 Annual Report Download - page 80

We continue to manage for profitable flows and will make changes that may impact flows to improve the overall
economics. These may include changing the share classes we offer in various distribution channels or altering fee
structures. This may result in outflows in 2013 as these changes go into effect, however it would have a nominal impact
on margins as we move to more attractive arrangements.
Threadneedle managed assets increased $14.2 billion, or 13%, during the year ended December 31, 2012 due to market
appreciation, as well as a positive impact from foreign currency translation. Threadneedle retail funds increased
$7.3 billion, or 23%, in 2012 due to market appreciation of $3.2 billion, net inflows of $2.3 billion, and a $1.6 billion
positive impact from foreign currency translation. Threadneedle institutional AUM increased $7.0 billion, or 9%, in 2012
due to market appreciation of $4.9 billion and a $3.7 billion positive impact from foreign currency translation, partially
offset by net outflows of $4.1 billion. Threadneedle institutional net outflows included $3.8 billion of outflows from a
closed book of insurance assets and $0.9 billion from the retender of low margin pension assets, partially offset by inflows
from institutional mandates from clients in the Middle East and Africa.
Investment performance in equity and fixed income portfolios across Columbia and Threadneedle continues to be strong.
Like others in the industry, we continued to see inflows in fixed income and outflows in equity.
Average segment AUM increased $3.7 billion, or 1%, from the prior year due to market appreciation, partially offset by net
outflows.
The following table presents the results of operations of our Asset Management segment on an operating basis:
Years Ended
December 31,
2012 2011 Change
(in millions)
Revenues
Management and financial advice fees $ 2,420 $ 2,434 $ (14) (1)%
Distribution fees 442 450 (8) (2)
Net investment income 19 11 8 73
Other revenues 12 5 7 NM
Total revenues 2,893 2,900 (7) —
Banking and deposit interest expense 2 3 (1) (33)
Total net revenues 2,891 2,897 (6) —
Expenses
Distribution expenses 1,105 1,095 10 1
Amortization of deferred acquisition costs 16 19 (3) (16)
General and administrative expense 1,213 1,255 (42) (3)
Total expenses 2,334 2,369 (35) (1)
Operating earnings $ 557 $ 528 $ 29 5%
NM Not Meaningful.
Our Asset Management segment pretax operating earnings, which exclude net realized gains or losses and integration
charges, increased $29 million, or 5%, to $557 million for the year ended December 31, 2012 compared to $528 million
for the prior year reflecting equity market appreciation, higher performance fees and continued expense management,
partially offset by the impact of net outflows and the industry shift in flows from equity to fixed income, which has a lower
fee structure, and a favorable $11 million net impact from the liquidation of a CDO in the prior year.
Net Revenues
Net revenues were essentially flat at $2.9 billion for the year ended December 31, 2012 compared to the prior year.
Management and financial advice fees decreased $14 million, or 1%, to $2.4 billion for the year ended December 31,
2012 compared to the prior year primarily due to net outflows and the impact of the industry shift in flows from equity to
fixed income, which has a lower fee structure, and a $9 million gain on the liquidation of a CDO in the prior year, partially
offset by equity market appreciation and a $36 million increase in performance fees. Average assets under management
increased 1% compared to the prior year driven by equity market appreciation, partially offset by net outflows. See our
discussion above on the changes in assets under management.
Expenses
Total expenses, which exclude integration charges, decreased $35 million, or 1%, to $2.3 billion for the year ended
December 31, 2012 compared to $2.4 billion for the prior year primarily due to a decrease in general and administrative
expense.
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