Prudential 2015 Annual Report Download - page 179

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
The expected benefit payments for the Company’s pension and postretirement plans, as well as the expected Medicare Part D subsidy
receipts related to the Company’s postretirement plan, for the years indicated are as follows:
Pension Benefit
Payments
Other
Postretirement
Benefit Payments
Other
Postretirement
Benefits–
Medicare Part
D Subsidy
Receipts
(in millions)
2016 ......................................................................... $ 678 $ 172 $ 12
2017 ......................................................................... 696 176 12
2018 ......................................................................... 722 178 13
2019 ......................................................................... 746 179 14
2020 ......................................................................... 772 180 14
2021-2025 .................................................................... 4,205 876 75
Total ......................................................................... $7,819 $1,761 $140
The Company anticipates that it will make cash contributions in 2016 of approximately $140 million to the pension plans and
approximately $10 million to the postretirement plans.
Postemployment Benefits
The Company accrues postemployment benefits for income continuance and health and life benefits provided to former or inactive
employees who are not retirees. The net accumulated liability for these benefits at December 31, 2015 and 2014 was $48 million and $55
million, respectively, and is included in “Other liabilities.”
Other Employee Benefits
The Company sponsors voluntary savings plans for employees (401(k) plans). The plans provide for salary reduction contributions by
employees and matching contributions by the Company of up to 4% of annual salary. The matching contributions by the Company
included in “General and administrative expenses” were $64 million, $60 million and $57 million for the years ended December 31, 2015,
2014 and 2013, respectively.
19. INCOME TAXES
The components of income tax expense (benefit) for the years ended December 31 were as follows:
2015 2014 2013
(in millions)
Current tax expense (benefit)
U.S. ............................................................................................. $ 738 $ (80) $ (292)
State and local .................................................................................... 3 (7) 16
Foreign .......................................................................................... 622 463 310
Total ............................................................................................ 1,363 376 34
Deferred tax expense (benefit)
U.S. ............................................................................................. 585 880 44
State and local .................................................................................... 4 12 0
Foreign .......................................................................................... 120 (919) (1,136)
Total ............................................................................................ 709 (27) (1,092)
Total income tax expense (benefit) on continuing operations before equity in earnings of operating joint ventures .......... 2,072 349 (1,058)
Income tax expense on equity in earnings of operating joint ventures ............................................. (1) (2) 19
Income tax expense on discontinued operations .............................................................. 0 6 3
Income tax expense (benefit) reported in equity related to: ......................................................
Other comprehensive income ......................................................................... (2,213) 4,249 (582)
Stock-based compensation programs ................................................................... (22) (29) (32)
Total income taxes ..................................................................................... $ (164) $4,573 $(1,650)
In July 2014, the IRS issued guidance relating to the hedging of variable annuity guaranteed minimum benefits (“Hedging IDD”). The
Hedging IDD provides an elective safe harbor tax accounting method for certain contracts which permits the current deduction of losses
and the deferral of gains for hedging activities that can be applied to open years under IRS examination beginning with the earliest open
year. The Company will apply this tax accounting method for hedging gains and losses covered by the Hedging IDD beginning with 2009.
As a result of applying such accounting method in 2014, the Company’s U.S. current tax benefit includes an additional tax benefit of $475
million and a corresponding reduction of deferred tax assets.
Prudential Financial, Inc. 2015 Annual Report 177