Ameriprise 2014 Annual Report Download - page 92

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) 2013 2012
(in millions)
Other revenues $ (18) $ (41)
Benefits, claims, losses and settlement expenses (5) (28)
Amortization of DAC (79) 23
Interest credited to fixed accounts —2
Total expenses (84) (3)
Total(1) $ 66 $ (38)
(1) Includes a $17 million net benefit and a $14 million net expense related to the market impact on variable annuity guaranteed
benefits for the years ended December 31, 2013 and 2012, respectively.
The impact of unlocking for the year ended December 31, 2012 included a $41 million benefit, net of DAC and DSIC
amortization, from an adjustment to the model which values the reserves related to living benefit guarantees primarily
attributable to prior periods.
Net Revenues
Net revenues increased $982 million, or 10%, to $11.2 billion for the year ended December 31, 2013 compared to
$10.2 billion for the prior year primarily due to higher management and financial advice fees, distribution fees and other
revenues.
Management and financial advice fees increased $561 million, or 12%, to $5.3 billion for the year ended December 31,
2013 compared to $4.7 billion for the prior year primarily due to higher asset-based fees driven by an increase in average
AUM, as well as a shift to higher fee retail assets at Threadneedle and revenue enhancements related to various pricing
adjustments. Average AUM increased $41.0 billion, or 7%, compared to the prior year primarily due to market appreciation
and wrap account net inflows, partially offset by asset management net outflows. See our discussion on the changes in
AUM in our segment results of operations section below.
Distribution fees increased $155 million, or 10%, to $1.8 billion for the year ended December 31, 2013 compared to
$1.6 billion for the prior year due to higher client assets and increased client activity.
Net investment income decreased $44 million, or 2%, to $1.9 billion for the year ended December 31, 2013 compared to
$1.9 billion for the prior year reflecting a $193 million decrease in investment income on fixed maturity securities, partially
offset by a $30 million gain on the sale of Threadneedle’s investment in Cofunds in the second quarter of 2013 and a
$110 million increase in net investment income of CIEs. The decrease in investment income on fixed maturity securities
was primarily due to low interest rates and approximately $126 million of lower investment income due to the sale of
Ameriprise Bank’s investment portfolio as a result of the transition of banking operations.
Other revenues increased $240 million, or 30%, to $1.0 billion for the year ended December 31, 2013 compared to
$795 million for the prior year due to the impact of unlocking, higher fees from variable annuity guarantees, and a
$189 million increase in other revenues of CIEs. Other revenues for the year ended December 31, 2013 included an
$18 million negative impact from unlocking compared to a $41 million negative impact in the prior year. The primary driver
of the unlocking impact to other revenues in both years was lower projected gains on reinsurance contracts resulting from
favorable mortality experience. Other revenues for the prior year included $17 million of revenue from former banking
operations.
Expenses
Total expenses increased $250 million, or 3%, to $9.2 billion for the year ended December 31, 2013 compared to
$9.0 billion for the prior year primarily due to increases in distribution expenses and benefits, claims, losses and
settlement expenses, partially offset by decreases in amortization of DAC and general and administrative expense.
Distribution expenses increased $334 million, or 13%, to $2.9 billion for the year ended December 31, 2013 compared
to $2.6 billion for the prior year driven by 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 $25 million, or 3%, to $806 million for the year ended December 31, 2013
compared to $831 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.
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