Voya 2013 Annual Report Download - page 146

alternative investments in the prior period. In addition, we recognized an accumulation of $13.3 million of carried
interest in the prior period, mostly offset by $13.2 million of net investment income from the Lehman Recovery.
Fee income increased $56.1 million from $474.7 million to $530.8 million primarily due to an increase in
AUM resulting in higher management and administrative fees earned. The increase in AUM is predominantly
driven by positive net flows including sub-advisor replacements and improved equity markets.
Other revenue increased $10.7 million from $29.2 million to $39.9 million primarily due to an increase in
performance and production related revenues.
Operating benefits and expenses
Operating expenses increased $18.6 million from $411.0 million to $429.6 million primarily as a result of
higher variable expenses associated with higher AUM and higher Operating earnings.
Operating earnings before income taxes
Operating earnings before income taxes increased $43.6 million from $134.5 million to $178.1 million
primarily due to higher Fee income due to an increase in affiliate sourced AUM and Investment Management
sourced AUM and an increase in Other revenue. The increases were partially offset by lower Net investment
income and higher variable expenses associated with higher AUM and higher Operating earnings.
Investment Management—Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
Operating revenues
Net investment income and net realized gains (losses) increased $32.8 million from $8.8 million to
$41.6 million primarily due to higher alternative investment income, partnership income and improved
performance of funds, as well as recognizing an accumulation of $13.3 million of carried interest in 2012.
Fee income increased $5.4 million from $469.3 million to $474.7 million primarily due to an increase in
affiliate sourced AUM resulting in higher management and administrative fees earned.
Other revenue increased $15.4 million from $13.8 million to $29.2 million primarily due to an increase in
service fees earned as part of services provided in connection with the sale by ING Group of its ING Direct U.S.
business. Additionally, lower underwriting fees related to a launch of a new product in 2011 which did not repeat
in 2012 contributed to the increase. Partially offsetting these increases were lower levels of mortgage and private
placement production fees.
Operating benefits and expenses
Operating expenses increased $6.6 million from $404.4 million to $411.0 million primarily as a result of
higher variable compensation costs and increases in variable administrative costs related to higher AUM.
Operating earnings before income taxes
The overall increase in operating earnings of $47.0 million was primarily driven by higher alternative
investment income, partnership income and improved performance of funds, as well as recognizing an
accumulation of carried interest. In addition, service fees increased Other revenues and were partially offset by
higher variable compensation costs.
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