Ameriprise 2014 Annual Report Download - page 76

Overall
Income from continuing operations before income tax provision increased $577 million, or 29%, to $2.5 billion for the year
ended December 31, 2014 compared to $2.0 billion for the prior year primarily reflecting the impact of market
appreciation, wrap account net inflows, an increase in net income from CIEs and the market impact on variable annuity
guaranteed benefits (net of hedges and the related DSIC and DAC amortization), partially offset by a $109 million
decrease from unlocking, asset management retail fund distributions and higher auto and home claim and claim
adjustment expense. The market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and
DAC amortization) was an expense of $94 million for the year ended December 31, 2014 compared to an expense of
$170 million for the prior year, which included a $17 million benefit associated with unlocking.
The following table presents the total pretax impacts on our revenues and expenses attributable to unlocking for the years
ended December 31:
Pretax Increase (Decrease) 2014 2013
(in millions)
Other revenues $ (29) $ (18)
Benefits, claims, losses and settlement expenses 6 (5)
Amortization of DAC 8 (79)
Total expenses 14 (84)
Total(1) $ (43) $ 66
(1) Includes a $17 million net benefit related to the market impact on variable annuity guaranteed benefits for the year ended
December 31, 2013.
Net Revenues
Net revenues increased $1.1 billion, or 10%, to $12.3 billion for the year ended December 31, 2014 compared to
$11.2 billion for the prior year primarily due to higher management and financial advice fees and other revenues.
Management and financial advice fees increased $557 million, or 11%, to $5.8 billion for the year ended December 31,
2014 compared to $5.3 billion for the prior year primarily due to higher asset-based fees driven by an increase in average
AUM. Average AUM increased $58.0 billion, or 10%, compared to the prior year primarily due to market appreciation and
wrap account net inflows. See our discussion on the changes in AUM in our segment results of operations section below.
Distribution fees increased $123 million, or 7%, to $1.9 billion for the year ended December 31, 2014 compared to
$1.8 billion for the prior year due to higher client assets, as well as increased client activity.
Net investment income decreased $148 million, or 8%, to $1.7 billion for the year ended December 31, 2014 compared
to $1.9 billion for the prior year primarily due to a $96 million decrease in investment income on fixed maturities driven by
low interest rates and a $63 million decrease in net investment income of CIEs, partially offset by a $30 million increase
in net realized gains primarily related to calls on fixed income securities.
Premiums increased $103 million, or 8%, to $1.4 billion for the year ended December 31, 2014 compared to $1.3 billion
for the prior year primarily due to growth in auto and home premiums driven by continued new policy sales growth,
primarily from our affinity relationships with Costco and Progressive. Auto and home policies in force increased 11%
compared to the prior year.
Other revenues increased $431 million, or 42%, to $1.5 billion for the year ended December 31, 2014 compared to
$1.0 billion for the prior year due to a $376 million increase in other revenues of CIEs and higher fees from variable
annuity guarantee sales in the prior year where the fees start on the first anniversary date, and higher average fee rates,
partially offset by the impact of unlocking. Other revenues for the year ended December 31, 2014 included a $29 million
negative impact from unlocking compared to an $18 million negative impact in the prior year. The primary driver of the
unlocking impact to other revenues in both periods was lower projected gains on reinsurance contracts resulting from
favorable mortality experience.
Expenses
Total expenses increased $492 million, or 5%, to $9.7 billion for the year ended December 31, 2014 compared to
$9.2 billion for the prior year primarily due to increases in distribution expenses and amortization of DAC.
Distribution expenses increased $311 million, or 11%, to $3.2 billion for the year ended December 31, 2014 compared
to $2.9 billion for the prior year driven by higher advisor compensation due to growth in assets under management. See
our discussion on the changes in AUM in our segment results of operations section below.
Interest credited to fixed accounts decreased $93 million, or 12%, to $713 million for the year ended December 31,
2014 compared to $806 million for the prior year driven by lower average fixed annuity account balances and a lower
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