Welcome to the second quarter 2013 earnings call. My name is Larisa and I will be your operator for today's call. [Operator Instructions] Please note this conference is being recorded. Now I'd like to turn the call over to Alicia Charity. Alicia, you may begin.

Thank you, and good morning. Welcome to Ameriprise Financial's Second Quarter Earnings Call. On the call with me are Jim Cracchiolo, Chairman and CEO; and Walter Berman, Chief Financial Officer. Following their remarks, we will be happy to take your questions. During the call, you will hear reference to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today’s materials on our website. Some statements that we make on this call may be forward-looking, reflecting management’s expectations about future events and operating plans and performance. These forward-looking statements speak only as of today’s date and involve a number of risks and uncertainties. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in today’s earnings release, our 2012 annual report to shareholders, and our 2012 10-K report. We take no obligation to update publicly or revise these forward-looking statements. And with that, I'll turn it over to Jim.

Good morning and thanks for joining us for our second quarter earnings call. I'll provide my perspective on our results in the business. Walter will review the numbers more fully, and then we'll take your questions. Yesterday afternoon, we reported strong second quarter earnings. We're making significant progress across the firm and we delivered record results in our Advice & Wealth Management business. In terms of the economic environment that we've been operating in, U.S. and European equity markets moved around quite a bit during the quarter. They rose significantly in the early part of the quarter before hitting a rough patch in June and have since come back. Investments are beginning to get back into the markets, and the economy is on more stable ground. The bond market backed up a bit increasing long-term interest rates. However, short-term interest rates remain at an all-time low. Overall, I'm pleased with how Ameriprise is performing. We're moving forward with purpose and executing our consistent strategy. Walter will discuss the numbers in detail, but our financial results demonstrate a strong quarter. On an operating basis, net revenues grew to $2.7 billion from significant growth in our fee-based businesses and a pickup in client and advisor activity. Our earnings were $352 million, with diluted earnings per share of $1.69. And return on equity, excluding AOCI reached a new level, increasing to 17.9%, which is an all-time high for us. In addition, our assets under management and administration increased to $703 billion. Maintaining an excellent financial foundation is core to how we operate the company. We continue to demonstrate the strength of our capital position and ability to generate significant free cash flow to return to shareholders. During the quarter, we returned $488 million to shareholders through share repurchases and dividends. Over the last…

Thank you, Jim. Ameriprise delivered excellent financial results this quarter, particularly in our targeted growth areas. Advice & Wealth Management and Asset Management. These 2 segments represent over 60% of our total revenues and grew 17% on a combined basis when you normalize for exiting the bank. In Protection and Annuities, revenue grew in line with our expectations, particularly in light of continued low interest rates. Let's turn to earnings on Slide 4. Operating pretax earnings had similar trends to revenues. Advice & Wealth Management and Asset Management together represented over 60% of operating pretax earnings. This quarter was particularly high with the Cofunds gain. And adjusting for that, it would've been 59% of operating and pretax earnings. We expect this trend line to be in the high 50% range for the balance of the year. Growth in these 2 areas was particularly strong. In Advice & Wealth Management, earnings grew 63% even with low interest rates and after adjusting for the bank exit. Asset Management earnings increased 53%. Excluding the gains from the Cofund sale, Asset Management earnings increased 30%. Annuities earnings growth was a solid 7%, considering the low interest rate environment. The year-over-year comparison for Protection was impacted by onetime items in both quarters, that I will discuss later. Let's turn to EPS on Slide 5. Earnings per share were $1.69, up a robust 50%, and return on equity hit an all-time high of 17.9%. These reflect strong earnings growth in our Advice & Wealth Management and Asset Management businesses, and our ability to utilize our balance sheet to return capital to shareholders given our financial strength. Looking ahead, we continue to see opportunity for further ROE expansion. Moving to the segments. Results in Advice & Wealth Management were strong across the board. Business growth metrics, revenue…

[Operator Instructions] The first question comes from Suneet Kamath from UBS.

I wanted to start with the Advice & Wealth Management business. I guess, on the past couple of calls, you've talked about the employee-advisor channel as breakeven. Just wondering if we're still breakeven with strong second quarter results. And then, kind of how long do you think it'll take you to actually start to generate a profit in that business? And if you can hit on some of the drivers there, that would be helpful.

Okay, this is Jim. The employee part of the AWM business is actually profitable. It turned profitable this year, and it's starting to improve nicely. Having said that, it's not to the margins that we would like. That's consistent across the entire franchise now. But as we continue to gain productivity there and manager expenses, we think that will continue accrete to earnings and improve the margins.

I guess, if we think about the advisors in the 2 channels, how would the productivity of the employee advisors compare to the franchisee advisors?

Well, today, as you would realize, because the employee channel was one that we more started from a maintaining an employee base over the last number of years rather than migrating people who are maturing over to the franchisee, we still have a number of our legacy people continuing to mature in that as we recruit experienced people into the channel. So we're seeing a nice increase in productivity as they continue to mature, as we continue to ramp up for the years coming in as they continue to get their productivity back up to what they were before they were recruited, as they transfer their books. So I would say, over the next few years, we should be pretty equal in productivity between the channels. Having said that, I think we're looking to grow both channels, and the productivity in both channels continues to go up.

Right. I mean, could we use a rule of thumb? Is it like half the productivity in the employee channel on average versus franchisee? Is there sort of way of dimensioning that?

What we'll do is -- I would say it's -- I think it's more than half at this point in time, I don't have the numbers right in front of me. But I would continue to say that it will narrow over the next number of quarters. And so I think it's materially changed from where it used to be over the last 2 years. But I don't have the latest numbers in front of me.

Okay. And then just lastly on the Advice & Wealth business. If we think about that 14.1% pretax margin, maybe compare it to the 12.9% that you did in the first quarter. I think the second quarter tends to be your seasonally high sort of transaction quarter. I guess I'm trying to figure out how much of the delta between the 2 periods is related to that seasonality versus the productivity or margin expansion that we could expect to continue even as we move to the third quarter?

Sure, it's Walter. As you look at -- again, there's no crystal ball in this, but certainly in the third quarter, we do see a basic cyclicality that will be lower. But we anticipate that the margins, if you're getting to where we're going to be, should be in the high 13s. And so we think, certainly, the trajectory of this was going to continue and the fundamentals are going to drive it. But it will be in the high 13s.

Got it. And then, just the last question I have is on the Asset Management business. I guess, we've talked for a while now about expanding into third-party distribution channels. And I'm just wondering, as you think about that strategy, what are the levers or the catalysts that you have to increase your penetration there? In other words, is it just about performance of the funds or are there some other competitive advantages that you bring to the table that could increase penetration in that channel?

Yes. I think as we talk about growing our third-party distribution -- and again, I'll separate the retail from the institutional. In the retail side of the business, it's really getting in front of the various distribution partners with our product. As you would imagine, they have a number of products already on their platforms. They've utilized a number of carriers. And so what we're doing is showing them what our Columbia lineup is. We had reestablished our wholesaling and the distributions as we have merged the wholesaling. And now we need to continue to make progress working with them to get into the model portfolios, through the gatekeepers and on the various platforms for the different types of products that we have. So it's not as though we don't have the products nor the performance, we do. It just takes time to build those relationships back and see our products versus the other ones that they're offering and getting our wholesaling and capabilities attached to that. So we are making good progress. As you know, it's a very competitive area, but one that is large. And we're making good headway. I think on the other side of it, we do experience some of the outflows from some of the past things that might have been on there as a sub-advisor or for a portfolio to where the managers have retired or changed, and that had affected on the net basis some of those activities. So we see the ability to grow the distribution through our third parties, as we continue to get more firmly on the ground and ramp up our efforts. Institutional, it was the same thing. I mean, we got put on hold, as you know. But now that pipeline is building, we're getting in front of many of the consultants and their clients and we are winning engagements there. And so we feel pretty good about our ability to do that. Now in the institutional space, we have broadened our lineup, and we will continue to broaden our lineup as we're actually developing some of our other products in certain categories. So in that case, it's more expending some of our product lines as we hit full fruition with the number of years et cetera with some of the merged platforms. So I feel like we will make good progress, however, it doesn't come as quickly as we'd all like.

The next question is from Erik Bass from Citigroup.

First, I guess, I realized there maybe some sensitivity becomes U.S. Trust is a client. At the firm, but can you provide any detail on just the amount of U.S. Trust assets that are managed by Columbia? And then it would be helpful if you could kind of gauge how far along is U.S. Trust in the process of shifting to an open architecture platform. And any estimate you have in terms of the size of additional potential outflows related to this transition and how long it may continue.

Look, we don't comment on any client or the assets we have for any particular client. What I would say is this, U.S. Trust has their open architecture. They do have lineups of different products. And as they continue to shift based on market cycle. So what we've been somewhat affected by as well is their shift from more of the fixed income where we had some good capability and good product that we had more of their clients in some of our fixed income and our tax exempt, et cetera to more of an equity bias. And as you would imagine, as you do, do a shift, particularly as we've merged our own platforms, and we have to get into their cycle as anybody else does as they evaluate different products or different sectors that they want to invest in. So as we do that, we might lose a bit more share for the areas that we had some large buckets in. And even though we may gain some share from some of the newer areas, it may not be as high as it once was. And so listen, we think that will continue simply because we did have a good installed base when this was all part of Bank of America or when U.S. Trust actually had some of these products. So as an example, they had a reasonable amount of money with, like, some of the sub-advisors, they had it with the VNR [ph], et cetera that was originally, one of their PMs. So I think as things continue to evolve, we will experience a level of outflows there. Not that we don't win a reasonable amount of business or have a good relationship and manage a good bucket of assets, it's just things do change. It's similar to what we did in our system years ago.

Okay, that's helpful. And then, can you comment just on the level of margin on U.S. Trust assets relative to the margin on new sales that you're getting? Comparing the outflows vis–à–vis the inflows.

What I would say there is that we have a good relationship with U.S. Trust, of course. Each distribution and each activity is a little different, so I would say on average, new retail flows would be at a higher fee basis than what we -- but again, it's in different buckets, including with U.S. Trust, some as institutional, some as retail, some is within SMAs, some is within mutual funds. So each one of those are a bit different, but I would say, on average, the new retail would be at a higher fee basis.

The next question comes from Alex Blostein from Goldman Sachs.

So I wanted to follow up on the capital return story. You guys continue to stand out, again, as one of the best probably capital return stories in the financial space. But I guess, some of that was attributable to sort of a catch-up from the bank going away. But I'm wondering once we kind of get through that, why shouldn't we expect well over 100% payout going forward. It feels like it should be sustainable given the mix shift, but I just want to make sure I understand the dynamic.

No, it very much is, as we look at the foreseeable future, based on our excess capital, as well as our earnings and the free cash flow that we could return more than 100%, and we may very well do so. Having said that, we don't want to sit here today and just say we will continue to return more than 100% going out. I think we've set a nice base level for you to say we'll return the majority. But I think as what we've shown you, even before the bank, we were returning over 100%. And as Walter said previously, we're not looking to store a lot of excess capital unless we have good use for it in some opportunities, which as we've been doing, we will return the capital to shareholders. We think that's appropriate. So as you saw, we didn't slow that in the third quarter, I mean the second quarter.

[indiscernible] Another quick follow-up, I guess, on the Asset Management business. The institutional business, I guess, was a little bit better in Columbia this quarter, and I know things can be fairly lumpy, but maybe you can give us maybe a little more granularity on where the kind of pipeline stand today versus where they were a quarter ago. And then maybe the mix of those pipelines. So what kind of, I guess, strategies you guys had seen most traction on the institutional front?

Okay. So our pipeline for institutional actually continues to look quite strong. We also have won a number of mandates that still are unfunded, just like we had in the first quarter, that funded in the second quarter. We won some nice mandates in the second quarter. They're unfunded and hopefully they'll fund in the third quarter. We continue to have a good pipeline as we look out today and that pipeline has grown. Having said that, as we look to the third quarter, we may get some lumpiness for some other ex-parent activity legacy things around pensions, et cetera in the Columbia business. We'll get the usual from the Zurich. So I think we'll find that as second quarter, as we showed you, we had a nice pick-up in the third-party. However, when you look at the absolute flow, that was offset a bit by some of the legacy parent stuff, which would be at lower basis point. So we might experience some of that. We can't always optically know exactly when the timing is, but we know there's some of that, that will come out. We think it will come out in the third quarter.

Great. And then, just the last one for me. I want to get an update on the interest rate sensitivity, given the move in the market we've seen recently. I guess, both to the expectation on the short end of the curve moving perhaps sooner as well as on the long end of the curve.

Well, on the short answer as we talked about -- again, we're not projecting, but I'll just reiterate, as it relates to the sweep accounts, a good rule of thumb on that, if it goes up 100 basis points, we should retain about 85% of that. And that could contribute close to 300 basis points on margins if it happens for the full year. So that is, again, that is certainly we're sitting on a very large amount of cash in sweep accounts, so that's very beneficial. On the long end of the curve, what really is going to happen here, again, a gradual increase here will certainly be beneficial from both the standpoint of our assets earning rates as we certainly had a duration where about 20% is coming through each year that we are reinvesting. So that would be beneficial on that standpoint. We then will have to evaluate now as we do the repricing on the 5-year fixed annuities that we talked about previously, where we're going to set those rates and obviously that will be a factor into it. So it will be beneficial as, again, as long as it's a slow, gradual increase, it will be beneficial to us on that basis. And then of course, it's beneficial from the standpoint on our hedging programs and the costs embedded within that.

Your next question comes from Jay Gelb form Barclays.

I wanted to touch base on the overall return on equity profile. It looks like the company is clearly going to be in the high-teens range on return on equity for this year and that's up from around 16% in 2012. And I'm just wondering if there's anything that you could see that would prevent Ameriprise from continuing to put up a couple hundred basis points of return on equity improvement over the next few years.

This is Walter. Obviously, no. In the main in most situations, we should be able to generate. You can always have a 2008 event, so I don't want to preclude. But no, barring that sort of dramatic situation, the business model is generating the sort of free cash flow that allows us to do that, and we're working on reducing our requirements and certainly as we shift the business, that is certainly extremely beneficial as allowing us to take the increase return on equity.

So between the combination of the good, strong earnings power, the buybacks that could absorb 100% or more of net income and then lower capital requirements on the business, that those would be the drivers?

Yes.

The next question comes from Tom Gallagher from Crédit Suisse. Thomas G. Gallagher - Crédit Suisse AG, Research Division: A few questions for me. The first one, just to come back to the situation at Columbia and comparing it to Threadneedle, what's going on there? So I understand the Zurich outflows that are expected are very low basis point mandates. So there's clearly not much loss of revenues if you look at -- follow the trail of assets, meaning there's still a positive revenue trend even though there's potentially net outflows here. But on the U.S. side with Columbia, can you help us think about the order of magnitude on -- because you've already laid out that they are the affiliated former parent assets that you expect to flow out, but are these anywhere close to the Zurich fees? Are those much higher? Because I heard your comment, Jim, that you -- that the new mandates are higher, but I just want to get a sense for how much higher. Are we talking about the assets that are flowing out are 40 basis points and the new mandates are 50 basis points? Can you help flush that out a little bit?

Okay, I think -- let me separate just the 2, because some of the outflows are also related as we just said over the last few periods that weren't necessarily just ex-parents, so they're ex-parent in a sense, but for instance, we have a sub-advisory relationship. Outside of that, we've made some changes in our RIA pricing that we think, economically, will be beneficial even with the outflows. And those are beyond sort of the ex-parent sort of stuff. But the sub-advisor was a separate sort of arrangement that we did assume when we did the deal. With the ex-parent stuff, the institutional would be at lower basis points. So that would be, actually, in some cases lower than the Zurich. In some of the cases, like on the retail side that would be in funds, would be higher than would be the Zurich because that's a balance of institutional and retail. And when we separate the 2, that will be higher. But what I'm saying on a like-to-like basis, for retail or institutional, the inflows that we're receiving through third parties and growing new distribution is at a higher rate overall and a reasonable higher rate. So from that basis, now, when you look at it to Threadneedle, it took us a little while for Threadneedle to really ramp up that third-party because -- but when we first acquired them, a lot of the mix was the Zurich that we had to diversify. But the amount of the bucket is large even though the fees were low. With Columbia, we have a combination of what we acquired from Columbia that was their proprietary and what they did with their channels. There was a part that was third-party, and then we combined that with what we have, which was significantly in the U.S. Ameriprise, which is sustaining. So I would say that there is a better balance here than we did when we acquired Threadneedle. And so we will overcome that hurdle, but we will experience continued outflows as that base of Columbia that came from Bank of America diversifies. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Okay. Got it.

Is that helpful? Thomas G. Gallagher - Crédit Suisse AG, Research Division: Yes, that is. So the lost revenues on the outflows, we're going to be seeing, your point is that it's somewhat similar to the dynamic that's going on with Threadneedle, but probably less of a spread, if I think about the basis points on new mandates versus the business you're losing, is that a fair way to put it?

Yes, for the stuff that will come out over time. For the stuff that has already come out, the basis points we lost wasn't as significant because a lot of that was in the institutional pension, Balboa, things like that. So that was even a lower basis point than the Zurich is on average. But on the stuff that will continue, let's say, as an on-going through retail would be a bit higher basis points than Zurich, but again, the mandates we're winning and retail would be higher than that. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Okay, that's helpful. The next question I had is, Jim, just given how well you guys are executing in Advice & Wealth right now, any thoughts on more aggressively investing into this business, whether it's M&A, a much bigger ramp-up of hiring new advisors, any thoughts on that?

Yes, we continue to invest nicely into the AWM business, as I said, and you've seen over the last number of years, our technology, our branding, some of our online capabilities, in mobile. We're coming out with our Confident Retirement approach, we've added some extra resources to help our advisors train up on the tools and capabilities to integrate their practices, particularly to engage clients with the online and activities around how people want to do business in a more 360 dimension today. So we continue to do that. Regarding recruitment, very clearly, we have still a good pipeline. We're out there. We've actually expanded our reach over the last year or 2. As you know, the industry has slowed a bit in there, and you can see others in the first and second quarter, but we feel like we have a good pipeline and that has come back. And we'll continue to reach out there for recruitment and additions. We do buy some individual smaller practices and other things that we add. Having said that, we don't look to go out and just buy independents at this point because we like sort of our model, and we -- anybody who we feel and is interested in joining our model as a franchisee or as our employee with our value proposition, we would definitely be interested in. But we're not just out there trying to roll up firms to grow advisor accounts. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Okay. And then last question I had just on a numbers question for Walter. So Page 38 of the supplement, disclosed items, the $21 million earnings drag from, I guess, what you guys are labeling compensation items. Can you just give a bit more granularity on what exactly this is from, which segments this is showing up in? And whether or not all or some of this is going to go away by next quarter?

Well, okay. It spreads across all the segments, and, including corporate, because obviously there's an element there. So it deals with, first and foremost, a very high-class problem we have on compensation as it relates to retention for advisors, formation or block. We actually have a higher retention factor relating to that, and we are recognizing that now, obviously, as we're getting closer to the periods. So there's really a big, big, big plus for us. So that will continue towards as we go towards the end of the year. But -- and then obviously, that would end. The performance as your doing it, is it relates to really assessing both on our programs and it goes across, certainly, our asset management approach goes [indiscernible] as we evaluate where that level is. And we now have assessed that and we've taken it up, which then taking it up in the second quarter, takes it up obviously, for the prior quarter. And now going forward, that should stay at the level again, we will reassess as we try and get our accruals as accurate as possible as we think the end performance would be there. So I think it follows a normal pattern that we've done sometime and -- so it's across the board and it's certainly on that basis, it deals with that. The other thing that we have and it's not on -- as it relates -- Page 21, it relates to severance, and, which we, from time to time we reflect the severance, and the severance is reflected in the corporate segment. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Okay. And then, Walter, how much -- it sounds like there's some kind of tail on this $21 million, meaning it doesn't go to 0 next quarter. Can you just frame that out? How much of this $21 million would you expect to recur?

Let me -- we're doing, obviously, in the second quarter, we're booking up for the first quarter in some of the -- and in the area that I mentioned. And again, it will continue to book at that level as you look up to increase, but you won't get the same, because you're not catching up for the first quarter. But it will -- we will certainly continue to book at a higher level. And then you have to take apart the various components that relates to severance. Severance, again, I can't tell you whether we will be booking through. And then we will book through a portion of the elements as relates to the [indiscernible] block. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Okay, and it gets smaller?

It should, certainly, the level in the second quarter, the third and fourth, it should be -- again, if it's constant, if we don't change, it should small. Thomas G. Gallagher - Crédit Suisse AG, Research Division: So it should go down from $21 million, fallen 1/2 or 1/3?

Well, Tom, here we go. It will go down.

The next question comes from Eric Berg from RBC Capital Markets.

Jim, I was hoping we could return to the earlier discussion you had with another question or about U.S. Trust. Are you essentially saying, I just want to get a sharper point around your answer? Are you essentially saying that: one, U.S. Trust is going to a more open architecture approach having relied heavily on Columbia; and two, that there had been a mismatch that is evolving between your strength and strongest performance and their focus? Help me -- maybe we can go over that again, please?

No, what I'm saying is, first of all, U.S. Trust always had their diversified business. And so what I'd mentioned to you is, as an example, there are certain portfolios in U.S. Trust like the VNR [ph]. The gentleman who ran that was actually one of the PMs originally that was part of the U.S. Trust business. So as you would imagine assets build in those type of portfolios over the long term, there's a good association, their systems familiar with it. So when he retired, we experienced greater outflow, right? Because that's a lot of where those assets were originally. So you have those things that are normal in any distribution system. In regard to what I've mentioned here is, we at Columbia used to work very closely with U.S. Trust on -- in their tax exempt categories, in their SMAs and various things to craft individual client portfolios, et cetera. So when they rotate out of certain classes like that, it's just like any other provider that may have been strong and fixed income in a certain distribution channel. You're going to experience a bit more outflows when you rotate out because of that type of penetration. And so that's part of what we're experienced. And then part is, when Columbia was there, they had a certain lineup of funds. And in those lineups, that's what was sold within the distribution, just like again on any platform. When we merged the 2 platforms, and now we have a larger lineup of funds, we got to get some of those new funds in as they look at their own lineup of other carriers that they had. And so if their installed base had a lot more of the Columbia funds originally for the reasons I've mentioned, and then you're adding new types of business and your other funds you're trying to add are newer, just as they have to try to get on and compete against the next person, you're not going to win as much business as you once had, but your redemptions will be higher because your base of assets is higher with that distributor. And that's exactly what's happened. That's why we said over time, it would sort of normalize or equalize. And again, we have a good relationship, it was a -- always a part of what they did for many, many years. So it does take a little time for that rebalancing.

Second question. It's interesting to me that it feels like and it seems like the retail picture at Threadneedle has been materially better than that at Columbia. Would that be your perception, too? And if so, why this contrast? When you think of these 2 money managers and their mutual -- retail mutual fund businesses. If it is in fact the case that in general Columbia has been in an outflow mode, Threadneedle in inflow mode, why the difference?

So Eric, very clearly, let me take Threadneedle first, okay? Threadneedle, for many years had excellent performance. But at the beginning, just having excellent product and performance didn't get them to win business in the U.K. because again, in the past, they worked more closely with Zurich, and they focused on Zurich as a part of their proprietary house for that business. So when we purchased Threadneedle, we worked with Threadneedle to really diversify, invest appropriately so that we took more time and effort. But it took years for us to get onto those platforms and channels in the U.K. I mean, last year, I'll give you an example, even with some of the larger players there, we actually, for a few quarters, actually became the #1 seller in the U.K. because we had good performance. But we've been there, and we took the time to build those relationships and positioning. And we had great product that was what was in demand there. And that's what we're doing right now with Threadneedle in Europe. So again, 2 years ago, we weren't really selling much in Europe. We're trying to build that. Now, we're starting to sell in Europe after it took us the time to build. And so that's what's happening at Threadneedle. Columbia has good product and good performance. Having said that, a number of years ago, Columbia didn't have that performance, and they were dealing with a lot of their own things and the roll up of those firms from Fleet and Bank of America and Nations and all that and going through their changes. But they also had big focus on when they merged into U.S. Trust business and the Asset Management business with the Fleet business, with the Bank of America business, there was roll up…

The last question comes from John Nadel from Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Question on Asset Management on the, I guess, at least on the GAAP-based operating margin. If we exclude the couple of onetime items, the onetime gains that you guys called out this quarter, I think it calculates out to about 19.5%, 19.6% margin. How should we think about the drivers of the improvement in that margin as we look forward? I mean, is this really -- the margin improvement is really about a turn in flows? Are there other factors, aside from just market performance that might contribute to the expansion of the margin there?

Obviously it's a flow, and as you would get to that, certainly, it's the mix of business as we look through. You're using the GAAP approach and obviously, if you use the adjusted approach, which tends to normalize it, you would get that. It clearly it's reengineering and other elements as we improve margins that will continue to drive that. So there is -- it is getting -- if it's a very leveraged business, and as you make the contributes to it and the mix shift between the businesses, equity markets and fixed and other things of that nature. Those are all the key drivers. I mean that's, obviously again, another focus of the firm, and I think it's consistent with what we've said in the past. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Well, and then, if just sort of drill down and look at the management fee rate this quarter, I mean, notwithstanding the fact that flows shifted, equities as a percentage of AUM was definitely up. And the fee rate expanded pretty nicely on the quarter-over-quarter basis. I mean, is that really what we should be looking for? Is overall equities as a percentage of AUM moving higher and to the extent that, that happens that fee rates just naturally moves higher? I mean, I guess, this sort of goes part and parcel with Tom's question earlier about fee rate of assets coming off versus the fee rate of assets coming on.

Well, I think it's very consistent, and your observation is correct. As Ted talked about it at the FCM [ph], it certainly as equity markets take on greater proportions, that would be the beneficial factor as it relates to our margins. And certainly -- but again, that is certainly a key driver, Jim, I don't know...

As Walter also said, it's the mix, or you just said that as some of the outflows have occurred in the lower margin business or lower fee-based business, not necessarily margin, that's exactly what you'll start to see transfer. Now again, I think it's a little lumpy, and it's not a perfect science every quarter because you have a number of those different variables or key levers happening, but that's exactly what you said. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Yes, I guess that's what I'm trying to get at is not -- I'm trying to sort to see whether -- prevent getting ahead of ourselves, and how much this fee rate can move higher.

Yes, don't let you get ahead of yourself there. John M. Nadel - Sterne Agee & Leach Inc., Research Division: The last thing I wanted to just ask is, there's a lot of moving parts, there's U.S. Trust, you have some issues at Marsico, you've got the RIA, the adjustments that you made. As we look forward, I know you guys sort of quote fund flows, including reinvested dividends, but if we look at it x reinvested dividends where, clearly, there's a seasonal factor to that, how do we -- do you have real -- do have any visibility on how we should expect, especially Columbia retail net flows to trends here, if we exclude reinvested dividends?

I wish I had a crystal ball, I don't. The only thing I can say is this on a few of the leverage, one is we made the change with the RIA. People knew it was coming the first quarter. The change actually went in at the end of the March. You would always experience a little more adjustment after that occurs, which we did in the second quarter from the first. I don't know if that will continue or slow down, et cetera. We think it, hopefully, will slow down. Regarding Marsico as an example, very good partner, over time built a good business, their performance has come back. They're settled, et cetera. Having said that, some of those things are lumpy based on how people evaluate them in their portfolio. So we think we'll experience a little of that again, but hopefully their performance and activities will come back there. And again, on the U.S. Trust, as I would say, is there is going to be a continuation and normalization there, but we're working hard to get more inflows. I actually have seen the sales pickup nicely. And then what happened in June for everybody with the pullback in the bond market affected a lot of people's sales and activities. So listen, I don't have a crystal ball. The only thing I can tell you is we're working hard. We're looking at all the various levers to grow the business. And sometimes, you hit some more quickly, better at certain spots, but I think we have opportunity and we just got to work at it. And hopefully, we'll get that to go in the right direction. And that's what we're pushing for. John M. Nadel - Sterne Agee & Leach Inc., Research Division: And one last real quick one if I can sneak it in, there's been some outflows, pretty consistently out of the alternatives asset classes. Maybe you can just give us an update on where things stand, I know accrue performance fees back late in the fourth quarter or in the fourth quarter, but where this performance stand?

Right now, I think performance is improved, again, with the flows coming off, it will not be a major factor.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.