Ameriprise 2013 Annual Report Download - page 85

Net Revenues
Net revenues, which exclude net realized gains or losses, increased $59 million, or 2%, to $2.6 billion for the year ended
December 31, 2013 compared to $2.5 billion for the prior year primarily due to higher management and financial advice
fees and other revenues, partially offset by a decrease in net investment income.
Management and financial advice fees increased $61 million, or 9%, to $709 million for the year ended December 31,
2013 compared to $648 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 $5.7 billion, or 9%, from the prior
year due to market appreciation, partially offset by net outflows.
Distribution fees increased $22 million, or 7%, to $339 million for the year ended December 31, 2013 compared to
$317 million for the prior year primarily due to higher fees on variable annuities driven by higher separate account
balances.
Net investment income, which excludes net realized gains or losses, decreased $74 million, or 7%, to $1.1 billion for the
year ended December 31, 2013 compared to $1.1 billion for the prior year reflecting a decrease of approximately
$26 million from lower invested assets due to net outflows and approximately $43 million from lower interest rates.
Premiums decreased $8 million, or 7%, to $110 million for the year ended December 31, 2013 compared to
$118 million for the prior year due to lower sales of immediate annuities with life contingencies.
Other revenues increased $58 million, or 19%, to $367 million for the year ended December 31, 2013 compared to
$309 million for the prior year due to higher fees from variable annuity guarantees driven by higher volumes due to prior
year sales with a first fee collected on the anniversary date, as well as higher fee rates.
Expenses
Total expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related
DSIC and DAC amortization) decreased $60 million, or 3%, to $1.9 billion for the year ended December 31, 2013
compared to $2.0 billion for the prior year primarily due to the impact of unlocking and model changes.
Distribution expenses increased $39 million, or 10%, to $434 million for the year ended December 31, 2013 compared
to $395 million for the prior year primarily due to higher variable annuity compensation driven by higher variable annuity
contract values due to market appreciation.
Interest credited to fixed accounts decreased $35 million, or 5%, to $653 million for the year ended December 31, 2013
compared to $688 million for the prior year driven by lower average fixed annuity account balances. Average fixed
annuities contract accumulation values decreased $508 million, or 4%, to $13.5 billion for the year ended December 31,
2013 compared to the prior year due to net outflows. Fixed annuities remain in net outflows due to low client demand
given the interest rate environment.
Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed
benefits (net of hedges and the related DSIC amortization), increased $79 million, or 19%, to $498 million for the year
ended December 31, 2013 compared to $419 million for the prior year primarily due to the impact of unlocking and
model changes and an increase in expenses of approximately $40 million related to higher reserve funding driven by the
impact of higher fees from prior year sales with variable annuity guarantees, partially offset by a $31 million benefit from
policyholder movement of investments in Portfolio Navigator funds under certain in-force variable annuities with living
benefit guarantees to the managed volatility funds. Benefits, claims, losses and settlement expenses for the year ended
December 31, 2013 included a $21 million expense from unlocking primarily reflecting the impact of variable annuity
model changes. Benefits, claims, losses and settlement expenses for the prior year included a $32 million benefit from
unlocking and model changes primarily reflecting a $53 million benefit from an adjustment to the model which values the
reserves related to living benefit guarantees primarily attributable to prior periods, partially offset by lower bond fund returns
related to the life contingent benefits associated with GMWB.
Amortization of DAC, which excludes the DAC offset to the market impact on variable annuity guaranteed benefits (net of
hedges and the related DSIC amortization), decreased $118 million, or 52%, to $111 million for the year ended
December 31, 2013 compared to $229 million for the prior year primarily due to the impact of unlocking and model
changes. Amortization of DAC for the year ended December 31, 2013 included an $81 million benefit from unlocking and
model changes primarily driven by the impact of expected higher interest rates and changes in assumed policyholder
behavior. Amortization of DAC for the prior year included a $41 million expense from unlocking and model changes
primarily reflecting spread compression and lower bond fund growth rates, partially offset by a benefit from improved
persistency and lowered mortality assumption. The impact of unlocking and model changes for 2012 included a
$10 million expense for the DAC offset to the adjustment to the model which values the reserves related to living benefit
guarantees primarily attributable to prior periods.
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