Prudential 2015 Annual Report Download - page 182

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
The following table sets forth the federal, state and foreign operating, capital loss and tax credit carryforwards for tax purposes, as of
December 31:
2015 2014
(in millions)
Federal net operating and capital loss carryforwards .................................................................... $ 0 $ 0
State net operating and capital loss carryforwards(1) .................................................................... $3,687 $5,895
Foreign operating loss carryforwards(2) .............................................................................. $ 65 $ 53
General business credits .......................................................................................... $ 0 $ 136
Alternative minimum tax credits(3) ................................................................................. $ 85 $ 248
(1) Expires between 2016 and 2034.
(2) $34 million expires between 2016 and 2025 and $31 million has an unlimited carryforward.
(3) Alternative minimum tax credits do not expire.
The following table sets forth the Company’s foreign operations and unremitted earnings for which the Company provides U.S.
income taxes as of December 31, 2015:
Foreign Operation Unremitted earnings for which the Company provides U.S. income taxes
Japanese insurance operations .................. —Pre-2014 U.S. GAAP earnings
— Post-2013 realized and unrealized capital gains
— An additional amount from Gibraltar Life and Prudential Gibraltar, not to exceed the deferred tax
asset recorded in the Statements of Financial Position as of the acquisition date for Prudential
Gibraltar and the Star and Edison Businesses
Korean insurance operations ................... Portion of post 2011 U.S. GAAP earnings
Certain operations in India, Germany, Taiwan,
Brazil, and non-insurance operations in Japan ...... U.S. GAAP earnings
Unremitted foreign earnings from operations in other foreign jurisdictions are considered to be indefinitely reinvested.
During the first quarter of 2013, we determined that in addition to U.S. GAAP earnings, we would repatriate an additional amount
from Gibraltar Life and Prudential Gibraltar, but that such additional amount would not exceed the deferred tax assets recorded in the
Statement of Financial Position as of the acquisition date for Prudential Gibraltar and the Star and Edison Businesses. Consequently we
recognized an additional U.S. tax expense of $108 million in “Income from continuing operations before equity in earnings of operating
joint ventures” during 2013. During the fourth quarter of 2014, we determined that the current year operating earnings and AOCI, except
realized and unrealized capital gains (losses), of our Japanese insurance operations will be treated as indefinitely reinvested. Consequently,
we recognized a U.S. tax expense of $32 million in “Income from continuing operations before equity in earnings of operating joint
ventures” during 2014. During the third quarter of 2015, the Company determined that the earnings from its Brazilian insurance operations
would be repatriated to the U.S. Accordingly, earnings from those Brazilian insurance operations were not considered indefinitely
reinvested, and the Company recognized an income tax benefit of $3 million in “Income from continuing operations before equity in
earnings of operating joint ventures”.
The following table sets forth the undistributed earnings of foreign subsidiaries, where the Company assumes indefinite reinvestment
of such earnings and for which U.S. deferred taxes have not been provided, as of the periods indicated. Determining the tax liability that
would arise if these earnings were remitted is not practicable.
At December 31,
2015 2014 2013
(in millions)
Undistributed earnings of foreign subsidiaries (assuming indefinite reinvestment) ..................................... $3,215 $2,396 $1,973
The Company’s income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures
includes income from domestic operations of $4,235 million, $3,487 million and $1,274 million, and income (loss) from foreign operations
of $3,534 million, $(1,728) million and $(2,958) million for the years ended December 31, 2015, 2014 and 2013, respectively.
The Company’s liability for income taxes includes the liability for unrecognized tax benefits and interest that relate to tax years still
subject to review by the IRS or other taxing authorities. The completion of review or the expiration of the Federal statute of limitations for
a given audit period could result in an adjustment to the liability for income taxes.
180 Prudential Financial, Inc. 2015 Annual Report