Ameriprise 2014 Annual Report Download - page 99

key areas such as Europe. Threadneedle institutional AUM increased $8.5 billion, or 10%, during the year ended
December 31, 2013 primarily due to market appreciation of $6.7 billion and a $1.6 billion positive impact of foreign
currency translation, partially offset by net outflows. Threadneedle institutional net outflows of $2.6 billion for the year
ended December 31, 2013 primarily reflected $3.7 billion of outflows from legacy insurance assets, partially offset by
funding of new mandates and additional flows into existing funds.
The following table presents the results of operations of our Asset Management segment on an operating basis:
Years Ended
December 31,
2013 2012 Change
(in millions)
Revenues
Management and financial advice fees $ 2,643 $ 2,420 $ 223 9%
Distribution fees 469 442 27 6
Net investment income 54 19 35 NM
Other revenues 5 12 (7) (58)
Total revenues 3,171 2,893 278 10
Banking and deposit interest expense 2 2 — —
Total net revenues 3,169 2,891 278 10
Expenses
Distribution expenses 1,112 1,029 83 8
Amortization of deferred acquisition costs 17 16 1 6
Interest and debt expense 24 22 2 9
General and administrative expense 1,325 1,289 36 3
Total expenses 2,478 2,356 122 5
Operating earnings $ 691 $ 535 $ 156 29%
NM Not Meaningful.
Our Asset Management segment pretax operating earnings, which exclude net realized gains or losses and integration and
restructuring charges, increased $156 million, or 29%, to $691 million for the year ended December 31, 2013 compared
to $535 million for the prior year reflecting equity market appreciation, a $30 million gain on the sale of Threadneedle’s
strategic business investment in Cofunds, a $19 million benefit from a CLO unwind, continued revenue enhancements
related to various pricing adjustments and expense re-engineering, partially offset by the impact of net outflows and retail
fund distributions.
Net Revenues
Net revenues, which exclude net realized gains or losses, increased $278 million, or 10%, to $3.2 billion for the year
ended December 31, 2013 compared to $2.9 billion for the prior year driven by increases in management and financial
advice fees and net investment income.
Management and financial advice fees increased $223 million, or 9%, to $2.6 billion for the year ended December 31,
2013 compared to $2.4 billion for the prior year due to an increase in assets under management, as well as a shift to
higher fee retail assets at Threadneedle, revenue enhancements related to various pricing adjustments and $17 million of
performance based incentive fees on a CLO unwind. Average assets under management increased 4% compared to the
prior year driven by equity market appreciation, partially offset by net outflows and retail fund distributions. See our
discussion above on the changes in assets under management.
Net investment income, which excludes net realized gains or losses, increased $35 million to $54 million for the year
ended December 31, 2013 compared to $19 million for the prior year due to a $30 million gain on the sale of
Threadneedle’s strategic business investment in Cofunds, as well as a $10 million gain on a CLO unwind related to our
residual interest in the CLO.
Expenses
Total expenses, which exclude integration and restructuring charges, increased $122 million, or 5%, to $2.5 billion for the
year ended December 31, 2013 compared to $2.4 billion for the prior year primarily due to an $83 million increase in
distribution expenses driven by higher average retail fund assets and a $36 million increase in general and administrative
expense driven by higher performance-based compensation, including $8 million of higher compensation related to a CLO
unwind, and investments in the business, partially offset by re-engineering benefits.
80