## YEAR ENDED DECEMBER 31, 2012 

## Revenues 

Revenues from management fees were $1,278 million for the year ended December 31, 2012, a decrease of 2% from $1,303 million for the year ended December 31, 2011. While average assets under management were up 1% year over year, the change in asset mix toward fixed-income products and institutional mandates reduced the average management fee rate in 2012 to 1.760% from 1.805% in 2011. 

For the year ended December 31, 2012, other revenue was $39.0 million versus $45.5 million for the year ended December 31, 2011. The largest component of other revenue is redemption fees. Redemption fees were $27.4 million for 2012 compared with $28.6 million for 2011. The prior year also included $4.9 million in proceeds from an insurance settlement. 

## Expenses 

SG&A expenses for the Asset Management segment were $233.3 million for the year ended December 31, 2012, a decrease from $235.9 million for the year ended December 31, 2011. As a percentage of average assets under management, SG&A expenses were 0.321% in 2012 and 0.327% in 2011, as spending declined 1.1% and average assets were up 0.6%. Although spending was increased on certain product initiatives and on in-house portfolio management teams, offsetting cost savings were found in other areas of the business. 

Trailer fees were $389.1 million for 2012 compared with $394.1 million for 2011. Net of inter-segment amounts, this expense was $374.0 million for the year ended December 31, 2012 versus $379.5 million for the year ended December 31, 2011. The decline in trailer fee expense is a result of the change in asset mix, as lower trailer fees are paid on fi xed-income products compared to equity products, and institutional funds where trailers are typically not paid. 

Amortization of deferred sales commissions and fund contracts was $168.1 million for 2012, down from $169.7 million for the prior year. This change is consistent with the change in deferred sales commissions paid in recent years and the amount of accelerated amortization related to redemptions of deferred load funds. 

Other expenses were $2.0 million for the year ended December 31, 2012 compared to $4.1 million in the year ended December 31, 2011. The decline in these expenses is primarily due to the legislated elimination of capital taxes on CI in 2011. 

Income before income taxes and interest expense for CI’s principal segment was $524.2 million for 2012, compared with $544.5 million in 2011. The decrease from the prior year is primarily due to the change in asset mix which reduced management fee revenue. 

