Prudential 2015 Annual Report Download - page 162

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
The FSA utilizes a solvency margin ratio to evaluate the capital adequacy of Japanese insurance companies. The solvency margin ratio
considers the level of solvency margin capital to a solvency margin risk amount, which is calculated in a similar manner to RBC. As of
December 31, 2015, Prudential of Japan and Gibraltar Life both had solvency margin capital in excess of 3.5 times the regulatory required
minimums that would require corrective action.
All of the Company’s domestic and international insurance subsidiaries have capital and surplus levels that exceed their respective
regulatory minimum requirements, and none utilized prescribed or permitted practices that vary materially from the practices prescribed by
the NAIC or equivalent regulatory bodies for results reported as of December 31, 2015 and 2014, respectively, or for the years ended
December 31, 2015, 2014 and 2013, respectively.
Accumulated Other Comprehensive Income (Loss)
The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential
Financial, Inc.” for the years ended December 31, are as follows:
Accumulated Other Comprehensive Income (Loss)
Attributable to Prudential Financial, Inc.
Foreign Currency
Translation
Adjustment
Net Unrealized
Investment Gains
(Losses)(1)
Pension and
Postretirement
Unrecognized Net
Periodic Benefit
(Cost)
Total Accumulated
Other
Comprehensive
Income (Loss)
(in millions)
Balance, December 31, 2012 .............................. $ 928 $11,402 $(2,116) $10,214
Change in OCI before reclassifications ...................... (1,465) (1,239) 749 (1,955)
Amounts reclassified from AOCI ........................... 4 (289) 125 (160)
Income tax benefit (expense) .............................. 420 470 (308) 582
Balance, December 31, 2013 .............................. (113) 10,344 (1,550) 8,681
Change in OCI before reclassifications ...................... (1,066) 15,490 (1,134) 13,290
Amounts reclassified from AOCI ........................... (3) (1,760) 91 (1,672)
Income tax benefit (expense) .............................. 207 (4,823) 367 (4,249)
Balance, December 31, 2014 .............................. (975) 19,251 (2,226) 16,050
Change in OCI before reclassifications ...................... (245) (3,161) (457) (3,863)
Amounts reclassified from AOCI ........................... 17 (2,325) 193 (2,115)
Income tax benefit (expense) .............................. 116 2,008 89 2,213
Balance, December 31, 2015 .............................. $(1,087) $15,773 $(2,401) $12,285
(1) Includes cash flow hedges of $1,165 million, $206 million and $(446) million as of December 31, 2015, 2014, and 2013, respectively.
Reclassifications out of Accumulated Other Comprehensive Income (Loss)
Years Ended December 31, Affected line item in Consolidated
Statements of Operations2015 2014 2013
(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustment ............................. $ (8) $ 3 $ 0 Realized investment gains (losses), net
Foreign currency translation adjustment ............................. (9) 0 (4) Other income
Total foreign currency translation adjustment .................... (17) 3 (4)
Net unrealized investment gains (losses):
Cash flow hedges—Interest Rate .................................. (7) (60) (24) (3)
Cash flow hedges—Currency/Interest rate ........................... 247 114 (104) (3)
Net unrealized investment gains (losses) on available-for-sale securities . . . 2,085 1,706 351
Net unrealized investment gains (losses)—all other .................... 0 0 66
Total net unrealized investment gains (losses) .................... 2,325 1,760 289 (4)
Amortization of defined benefit items:
Prior service cost ............................................... 13 20 22 (5)
Actuarial gain (loss) ............................................ (206) (111) (147) (5)
Total amortization of defined benefit items ...................... (193) (91) (125)
Total reclassifications for the period ........................ $2,115 $1,672 $ 160
(1) All amounts are shown before tax.
(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
(3) See Note 21 for additional information on cash flow hedges.
(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs,
future policy benefits and policyholders’ dividends.
160 Prudential Financial, Inc. 2015 Annual Report