The deferred premium associated with certain of the above options is paid or received semi-annually over the life of the option contract or at maturity.
The following is a summary of the payments the Company is scheduled to make and receive for these options:
## Table 0 ##
Actual timing and payment amounts may differ due to future contract settlements, modifications or exercises of options prior to the full premium being paid or received.
Beginning in the fourth quarter of 2013, the Company established a macro hedge program which uses a combination of options and/or swaps to provide protection against the statutory tail scenario risk arising from variable annuity reserves on our statutory surplus.
The program also covers some of the residual risks not covered by other hedging activities.
The gross notional amount of these derivative contracts was $710 million at December 31, 2013.
EIA, IUL and stock market certificate products have returns tied to the performance of equity markets.
As a result of fluctuations in equity markets, the obligation incurred by the Company related to EIA, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products.
As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts.
The gross notional amount of these derivative contracts was $1.5 billion and $1.3 billion at December 31, 2013 and 2012, respectively.
The Company enters into futures and commodity swaps to manage its exposure to price risk arising from seed money investments in proprietary investment products.
The gross notional amount of these contracts was $111 million and $146 million at December 31, 2013 and 2012, respectively.
The Company enters into foreign currency forward contracts to economically hedge its exposure to certain receivables and obligations denominated in non-functional currencies.
The gross notional amount of these contracts was $30 million and $14 million at December 31, 2013 and 2012, respectively.
The Company enters into futures contracts to economically hedge its exposure related to compensation plans.
The gross notional amount of these contracts was $224 million and $5 million at December 31, 2013 and 2012, respectively.
Embedded Derivatives Certain annuities contain GMAB and non-life contingent GMWB provisions, which are considered embedded derivatives.
In addition, the equity component of the EIA, IUL and stock market certificate product obligations are also considered embedded derivatives.
These embedded derivatives are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings.
As discussed above, the Company uses derivatives to mitigate the financial statement impact of these embedded derivatives.
Cash Flow Hedges The Company has designated and accounts for the following as cash flow hedges: (i) interest rate swaps to hedge interest rate exposure on debt, (ii) interest rate lock agreements to hedge interest rate exposure on debt issuances and (iii) swaptions used to hedge the risk of increasing interest rates on forecasted fixed premium product sales.
During the year ended December 31, 2012, the Company reclassified from accumulated other comprehensive income into earnings a $3 million gain on an interest rate hedge put in place in anticipation of issuing debt.
The gain was reclassified due to the forecasted transaction not occurring according to the original hedge strategy.
For the years ended December 31, 2013, 2012 and 2011, amounts recognized in earnings related to cash flow hedges due to ineffectiveness were $1 million, $1 million, and nil, respectively.
The estimated net amount of existing pretax losses as of December 31, 2013 that the Company expects to reclassify to earnings within the next twelve months is $1 million, which consists of $5 million of pretax gains to be recorded as a reduction to interest and debt expense and $6 million of pretax losses to be
Western (now known as Retail Properties of America, Inc.  (‘‘RPAI’’)) REIT.
The action also names as defendants RPAI, several of RPAI’s executives, and several members of RPAI’s board.
The action alleges that the Company failed to perform required due diligence and misrepresented various aspects of the REIT including fees charged to clients, risks associated with the product, and valuation of the shares on client account statements.
Plaintiffs seek unspecified damages.
The Company was served in December 2012, and, on April 19, 2013, moved to dismiss the complaint.
The motion has been fully briefed and submitted to the Court for review and decision.
The Company cannot reasonably estimate the range of loss, if any, that may result from this matter due to the early procedural status of the case, the absence of class certification, the lack of a formal demand on the Company by the plaintiffs and plaintiffs’ failure to allege any specific, evidence-based damages.
In November 2012, a lawsuit entitled Versata Software, Inc. , f/k/a Trilogy Software, Inc. , et al.
(‘‘Versata’’) v.  Ameriprise Financial, Inc. , Ameriprise Financial Services, Inc.  & American Enterprise Investment Services, Inc.  was filed in the District Court of Travis County, Texas relating to the Company’s licensing and use of software owned by Versata that the Company uses to manage registration, licensing and compensation, among other things.
The lawsuit alleges the Company violated the terms of the license agreement by allowing an impermissible third-party contractor to decompile Versata’s software code, and failing to have the third-party contractor execute individual non-disclosure agreements.
The Company has alleged counterclaims for wrongful termination and breaches of warranties, among other causes of action.
Both sides have asserted defenses to the claims and counterclaims.
The relief requested by Versata is for the Company to return the software and for other, unspecified, legal and equitable relief.
The relief requested by the Company against Versata is delivery and free use by the Company of the Versata source code.
Ameriprise removed the dispute to federal court.
That removal is currently subject to a motion to return the case to state court.
The matter is still in the discovery stage, and no trial date has been set.
The Company cannot reasonably estimate the range of loss, if any, that may result from this matter due to the procedural status of the case.24.
Related Party Transactions The Company may engage in transactions in the ordinary course of business with significant shareholders or their subsidiaries, between the Company and its directors and officers or with other companies whose directors or officers may also serve as directors or officers for the Company or its subsidiaries.
The Company carries out these transactions on customary terms.
The transactions have not had a material impact on the Company’s consolidated results of operations or financial condition.
The Company’s executive officers and directors may have transactions with the Company or its subsidiaries involving financial products and insurance services.
All obligations arising from these transactions are in the ordinary course of the Company’s business and are on the same terms in effect for comparable transactions with the general public.
Such obligations involve normal risks of collection and do not have features or terms that are unfavorable to the Company’s subsidiaries.25.
Discontinued Operations During the fourth quarter of 2011, the Company sold Securities America to Ladenburg Thalmann Financial Services, Inc.
The components of loss from discontinued operations, net of tax, were as follows:
## Table 1 ##
Threadneedle managed assets increased $14.2 billion, or 13%, during the year ended December 31, 2012 due to market appreciation, as well as a positive impact from foreign currency translation.
Threadneedle retail funds increased $7.3 billion, or 23%, in 2012 due to market appreciation of $3.2 billion, net inflows of $2.3 billion, and a $1.6 billion positive impact from foreign currency translation.
Threadneedle institutional AUM increased $7.0 billion, or 9%, in 2012 due to market appreciation of $4.9 billion and a $3.7 billion positive impact from foreign currency translation, partially offset by net outflows of $4.1 billion.
Threadneedle institutional net outflows included $3.8 billion of outflows from a closed book of insurance assets and $0.9 billion from the retender of low margin pension assets, partially offset by inflows from institutional mandates from clients in the Middle East and Africa.
Average segment AUM was essentially flat compared to the prior year as market appreciation was offset by net outflows.
The following table presents the results of operations of our Asset Management segment on an operating basis:
## Table 2 ##
Our Asset Management segment pretax operating earnings, which exclude net realized gains or losses and integration charges, increased $29 million, or 5%, to $557 million for the year ended December 31, 2012 compared to $528 million for the prior year reflecting equity market appreciation, higher performance fees and continued expense management, partially offset by the impact of net outflows and the industry shift in flows from equity to fixed income, which has a lower fee structure, and a favorable $11 million net impact from the liquidation of a CDO in the prior year.
Net Revenues Net revenues were essentially flat at $2.9 billion for the year ended December 31, 2012 compared to the prior year.
Management and financial advice fees decreased $14 million, or 1%, to $2.4 billion for the year ended December 31, 2012 compared to the prior year primarily due to net outflows and the impact of the industry shift in flows from equity to fixed income, which has a lower fee structure, and a $9 million gain on the liquidation of a CDO in the prior year, partially offset by equity market appreciation and a $36 million increase in performance fees.
Average assets under management was essentially flat compared to the prior year as market appreciation was offset by net outflows.
See our discussion above on the changes in assets under management.
Expenses Total expenses, which exclude integration charges, decreased $35 million, or 1%, to $2.3 billion for the year ended December 31, 2012 compared to $2.4 billion for the prior year primarily due to a decrease in general and administrative expense.
General and administrative expense, which excludes integration charges, decreased $42 million, or 3%, to $1.2 billion for the year ended December 31, 2012 compared to $1.3 billion for the prior year primarily due to continued expense controls, partially offset by an increase of approximately $19 million related to higher performance fee-related compensation.
PART II ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The following table presents reported quarterly high and low per share sale prices of our Class A common stock on the New York Stock Exchange (NYSE) for the years 2006 and 2005.
## Table 3 ##
On February 22, 2007, the closing price of our Class A common stock was $40.38 per share as reported on the NYSE.
As of February 22, 2007, we had 419,988,395 outstanding shares of Class A common stock and 623 registered holders.
In February 2004, all outstanding shares of our Class B common stock were converted into shares of our Class A common stock on a one-for-one basis pursuant to the occurrence of the “Dodge Conversion Event” as defined in our charter.
Also in February 2004, all outstanding shares of Class C common stock were converted into shares of Class A common stock on a one-for-one basis.
In August 2005, we amended and restated our charter to, among other things, eliminate our Class B common stock and Class C common stock.
Dividends We have never paid a dividend on any class of our common stock.
We anticipate that we may retain future earnings, if any, to fund the development and growth of our business.
The indentures governing our 7.50% senior notes due 2012 (7.50% Notes) and our 7.125% senior notes due 2012 (7.125% Notes) may prohibit us from paying dividends to our stockholders unless we satisfy certain financial covenants.
Our credit facilities and the indentures governing the terms of our debt securities contain covenants that may restrict the ability of our subsidiaries from making to us any direct or indirect distribution, dividend or other payment on account of their limited liability company interests, partnership interests, capital stock or other equity interests.
Under our credit facilities, the borrower subsidiaries may pay cash dividends or make other distributions to us in accordance with the applicable credit facility only if no default exists or would be created thereby.
The indenture governing the terms of the ATI 7.25% Notes prohibit ATI and certain of our other subsidiaries that have guaranteed those notes (sister guarantors) from paying dividends and making other payments or distributions to us unless certain financial covenants are satisfied.
The indentures governing the terms of our 7.50% Notes and 7.125% Notes also contain certain restrictive covenants, which prohibit the restricted subsidiaries under these indentures from paying dividends and making other payments or distributions to us unless certain financial covenants are satisfied.
For more information about the restrictions under our credit facilities and our notes indentures, see Item 7 of this annual report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Factors Affecting Sources of Liquidity” and note 7 to our consolidated financial statements included in this annual report.

<table><tr><td></td><td>Premiums Payable</td><td>Premiums Receivable</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>2014</td><td>$378</td><td>$86</td></tr><tr><td>2015</td><td>349</td><td>67</td></tr><tr><td>2016</td><td>305</td><td>51</td></tr><tr><td>2017</td><td>240</td><td>45</td></tr><tr><td>2018</td><td>196</td><td>56</td></tr><tr><td>2019-2027</td><td>601</td><td>79</td></tr><tr><td>Total</td><td>$2,069</td><td>$384</td></tr></table>
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>Total net revenues</td><td>$—</td><td>$—</td><td>$382</td></tr><tr><td>Income (loss) from discontinued operations</td><td>$-4</td><td>$2</td><td>$-124</td></tr><tr><td>Gain on sale</td><td>-1</td><td>-7</td><td>26</td></tr><tr><td>Income tax benefit</td><td>-2</td><td>-3</td><td>-38</td></tr><tr><td>Loss from discontinued operations, net of tax</td><td>$-3</td><td>$-2</td><td>$-60</td></tr></table>
<table><tr><td></td><td colspan="2">Years Ended December 31,</td><td></td><td></td></tr><tr><td></td><td>2012</td><td>2011</td><td colspan="2">Change</td></tr><tr><td></td><td colspan="3">(in millions)</td><td></td></tr><tr><td>Revenues</td><td></td><td></td><td></td><td></td></tr><tr><td>Management and financial advice fees</td><td>$2,420</td><td>$2,434</td><td>$-14</td><td>-1%</td></tr><tr><td>Distribution fees</td><td>442</td><td>450</td><td>-8</td><td>-2</td></tr><tr><td>Net investment income</td><td>19</td><td>11</td><td>8</td><td>73</td></tr><tr><td>Other revenues</td><td>12</td><td>5</td><td>7</td><td>NM</td></tr><tr><td>Total revenues</td><td>2,893</td><td>2,900</td><td>-7</td><td>—</td></tr><tr><td>Banking and deposit interest expense</td><td>2</td><td>3</td><td>-1</td><td>-33</td></tr><tr><td>Total net revenues</td><td>2,891</td><td>2,897</td><td>-6</td><td>—</td></tr><tr><td>Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>1,105</td><td>1,095</td><td>10</td><td>1</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>16</td><td>19</td><td>-3</td><td>-16</td></tr><tr><td>General and administrative expense</td><td>1,213</td><td>1,255</td><td>-42</td><td>-3</td></tr><tr><td>Total expenses</td><td>2,334</td><td>2,369</td><td>-35</td><td>-1</td></tr><tr><td>Operating earnings</td><td>$557</td><td>$528</td><td>$29</td><td>5%</td></tr></table>
<table><tr><td>2006</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$32.68</td><td>$26.66</td></tr><tr><td>Quarter ended June 30</td><td>35.75</td><td>27.35</td></tr><tr><td>Quarter ended September 30</td><td>36.92</td><td>29.98</td></tr><tr><td>Quarter ended December 31</td><td>38.74</td><td>35.21</td></tr><tr><td>2005</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$19.28</td><td>$17.30</td></tr><tr><td>Quarter ended June 30</td><td>21.16</td><td>16.28</td></tr><tr><td>Quarter ended September 30</td><td>25.20</td><td>20.70</td></tr><tr><td>Quarter ended December 31</td><td>28.33</td><td>22.73</td></tr></table>

Question: What will distribution fees be like in 2013 if it develops with the same increasing rate as current? (in millions)