Ameriprise 2012 Annual Report Download - page 86

Loss from discontinued operations, net of tax, of $60 million for the year ended December 31, 2011 included a
$77 million after-tax charge related to previously disclosed legal expenses and a $14 million after-tax gain on the sale of
Securities America.
Net Revenues
Net revenues increased $680 million, or 7%, to $10.2 billion for the year ended December 31, 2011 compared to
$9.5 billion for the prior year primarily due to growth in asset-based fees driven by higher assets under management,
partially offset by a decrease in revenues of CIEs.
Management and financial advice fees increased $753 million, or 20%, compared to the prior year primarily due to an
increase in asset-based fees driven by higher average assets under management. Average assets under management
increased 23% compared to the prior year driven by the Columbia Management Acquisition, wrap account net inflows and
market appreciation. The average S&P 500 Index increased 11% in 2011 compared to the prior year. In addition,
management fees related to our variable annuities increased $76 million, or 14%, compared to the prior year driven by a
12% increase in average variable annuities contract accumulation values due to higher average equity markets, as well as
net inflows.
Distribution fees increased $126 million, or 9%, to $1.6 billion for the year ended December 31, 2011 compared to
$1.4 billion for the prior year primarily due to higher asset-based fees driven by the Columbia Management Acquisition, net
inflows in wrap account assets and market appreciation, as well as increased client activity.
Net investment income decreased $263 million, or 11%, to $2.0 billion for the year ended December 31, 2011 compared
to $2.3 billion for the prior year primarily due to lower net investment income of CIEs, a $29 million decrease in
investment income on fixed maturity securities and a $27 million decrease in net realized gains. The decrease in
investment income on fixed maturity securities was driven by lower invested assets and lower interest rates, partially offset
by $43 million of additional bond discount accretion investment income related to prior periods resulting from revisions to
the accounting classification of certain structured securities in the third quarter of 2011. Net investment income of CIEs
decreased $184 million compared to the prior year driven by changes in the fair value of assets and liabilities of CIEs,
primarily debt and underlying syndicated loans. The decrease in invested assets compared to the prior year resulted from
net outflows in certificates driven by the low interest rate environment and lower investments in annuity general account
assets due to the implementation of changes to the Portfolio Navigator program in the second quarter of 2010 and lower
interest sensitive fixed annuity account balances. With these changes to the Portfolio Navigator program, assets of clients
participating in the 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 $41 million, or 3%, to $1.2 billion for the year ended December 31, 2011 compared to the prior
year primarily due to growth in auto and home premiums driven by higher volumes, as well as higher sales of immediate
annuities with life contingencies. Auto and home policy counts increased 7% period-over-period.
Other revenues remained flat at $863 million for the year ended December 31, 2011 compared to the prior year as a
decrease in other revenues of CIEs was offset by higher fees from variable annuity guarantees driven by higher in-force
amounts. During the second quarter of 2011, we reclassified from accumulated other comprehensive income into earnings
a $27 million gain on an interest rate hedge put in place in anticipation of issuing debt between December 2010 and
June 2011. Other revenues for the year ended December 31, 2010 included a $25 million benefit from payments related
to the Reserve Funds matter in the first quarter of 2010.
Banking and deposit interest expense decreased $23 million, or 33%, to $47 million for the year ended December 31,
2011 compared to $70 million for the prior year primarily due to lower certificate balances, as well as a decrease in
crediting rates on certificate products.
Expenses
Total expenses increased $702 million, or 9%, to $8.7 billion for the year ended December 31, 2011 compared to
$8.0 billion for the prior year primarily due to increases in distribution expenses and general and administrative expense.
Distribution expenses increased $424 million, or 20%, to $2.6 billion for the year ended December 31, 2011 compared
to $2.1 billion for the prior year as a result of the Columbia Management Acquisition, as well as higher advisor
compensation from business growth.
Interest credited to fixed accounts decreased $53 million, or 6%, to $856 million for the year ended December 31, 2011
compared to $909 million for the prior year driven by lower average variable annuities fixed sub-account balances and a
lower average crediting rate on interest sensitive fixed annuities, as well as lower average fixed annuity account balances.
Average variable annuities fixed sub-account balances decreased $580 million, or 11%, to $4.8 billion for the year ended
December 31, 2011 compared to the prior year primarily due to the implementation of changes to the Portfolio Navigator
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