The Company tests goodwill for impairment during the third quarter of each year at the reporting unit level based upon the best available data at June 30, of that year. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. Step 1 of the goodwill impairment process requires a comparison of the fair value of a reporting unit to its carrying value. To determine the fair values of its reporting units, the Company generally applies a market multiple, discounted cash flow, and/or an actuarial based valuation approach. The market multiple valuation approach utilizes market multiples of companies with similar businesses and the projected operating earnings of the reporting unit. The discounted cash flow valuation approach requires judgments about revenues, operating earnings projections, capital market assumptions and discount rates. The actuarial based approaches such as embedded value or cash flow testing estimate the net worth of the reporting unit and the value of existing and new business. The actuarial based approaches require judgments and assumptions about level of economic capital required to support the mix of business, long-term growth rates, the account value of in-force business, projections of new and renewal business, as well as margins on such business, the level of interest rates, credit spreads, equity market levels, and the discount rate that the Company believes is appropriate for the respective reporting unit.

In anticipation of the Separation, in the third quarter of 2016, MetLife reorganized its businesses into six segments: U.S.; Asia; Latin America; EMEA; MetLife Holdings; and Brighthouse Financial. In connection with the reorganization, MetLife realigned certain businesses among its existing and new segments. As a result, the Company reallocated goodwill based on the relative fair values of the reporting units within such segments.

Based on a quantitative analysis performed for the Life and Run-off reporting units within the Brighthouse Financial segment, the Company concluded that the carrying values of these reporting units exceeded their estimated fair values, indicating a potential for goodwill impairment. Accordingly, the Company performed Step 2 of the goodwill impairment process for each of the reporting units, which compares the implied estimated fair value of the reporting unit’s goodwill with its carrying value. This analysis indicated that the goodwill associated with these reporting units was not recoverable. As a result, the Company recorded a non-cash charge in the aggregate of $260 million ($223 million, net of income tax) for the impairment of the entire goodwill balance, which is reported in goodwill impairment in the interim condensed consolidated statements of operations and comprehensive income for both the three months and nine months ended September 30, 2016.

In addition, the Company performed its annual goodwill impairment tests of all other reporting units during the third quarter of 2016 using a qualitative assessment and/or quantitative assessments under the market multiple, discounted cash flow and/or actuarial based valuation approaches based on best available data as of June 30, 2016 and concluded that the estimated fair values of all such reporting units were in excess of their carrying values and, therefore, goodwill was not impaired.

Management continues to evaluate current market conditions that may affect the estimated fair value of the reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill.

Information regarding goodwill by segment, as well as Corporate & Other, was as follows:




	U.S.		Asia		Latin America		EMEA		MetLife Holdings			Brighthouse Financial			Corporate & Other			Total
	(In millions)
Balance at January 1, 2016
Goodwill	$	1,451	$	4,508	$	1,186	$	1,143	$	2,579		$	260		$	218		$	11,345
Accumulated impairment (1)	—		—		—		—		(1,692		)	—			(176		)	(1,868		)
Total goodwill, net	1,451		4,508		1,186		1,143		887			260			42			9,477
Dispositions (2)	—		—		—		—		—			—			(42		)	(42		)
Impairment	—		—		—		—		—			(260		)	—			(260		)
Effect of foreign currency translation and other	—		352		64		1		—			—			—			417
Balance at September 30, 2016
Goodwill	1,451		4,860		1,250		1,144		2,579			260			176			11,720
Accumulated impairment	—		—		—		—		(1,692		)	(260		)	(176		)	(2,128		)
Total goodwill, net	$	1,451	$	4,860	$	1,250	$	1,144	$	887		$	—		$	—		$	9,592

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(1)	The $1.9 billion accumulated impairment relates to the retail annuities business, which was impaired in 2012 and includes the allocated goodwill from Corporate & Other. Although the entire balance is reflected in the MetLife Holdings segment, it also relates to the retail annuities business within the Brighthouse Financial segment.


(2)	In conjunction with the U.S. Retail Advisor Force Divestiture, the Company reduced goodwill in Corporate & Other by $42 million during the nine months ended September 30, 2016. See Note 3.