Ameriprise 2014 Annual Report Download - page 100

Annuities
The following table presents the results of operations of our Annuities segment on an operating basis:
Years Ended
December 31,
2013 2012 Change
(in millions)
Revenues
Management and financial advice fees $ 709 $ 648 $ 61 9%
Distribution fees 339 317 22 7
Net investment income 1,036 1,127 (91) (8)
Premiums 110 118 (8) (7)
Other revenues 367 309 58 19
Total revenues 2,561 2,519 42 2
Banking and deposit interest expense — — — —
Total net revenues 2,561 2,519 42 2
Expenses
Distribution expenses 420 381 39 10
Interest credited to fixed accounts 653 688 (35) (5)
Benefits, claims, losses and settlement expenses 498 419 79 19
Amortization of deferred acquisition costs 111 229 (118) (52)
Interest and debt expense 37 34 3 9
General and administrative expense 213 238 (25) (11)
Total expenses 1,932 1,989 (57) (3)
Operating earnings $ 629 $ 530 $ 99 19%
Our Annuities segment pretax operating income, which excludes net realized gains or losses and the market impact on
variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization), increased $99 million, or
19%, to $629 million for the year ended December 31, 2013 compared to $530 million for the prior year primarily due to
the impact of unlocking, which was an increase to pretax operating income of $60 million for the year ended
December 31, 2013 compared to a decrease of $11 million for the prior year.
During the fourth quarter of 2013, we added Portfolio Stabilizer fund options for our in force variable annuities with living
benefit guarantees. These additional investment options resulted in sizable asset movement into the Portfolio Stabilizer
funds. The resulting earnings benefit in the fourth quarter of 2013 was $26 million.
RiverSource variable annuity account balances increased 11% to $75.5 billion at December 31, 2013 compared to the
prior year due to market appreciation, partially offset by net outflows. Variable annuity net outflows of $757 million for the
year ended December 31, 2013 reflected the closed book of annuities previously sold through third parties, partially offset
by $245 million of net inflows in the Ameriprise channel.
RiverSource fixed annuity account balances declined 4% to $13.3 billion at December 31, 2013 compared to the prior
year due to ongoing net outflows resulting from low client demand given the interest rate environment.
Net Revenues
Net revenues, which exclude net realized gains or losses, increased $42 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 $91 million, or 8%, to $1.0 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 $60 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.
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