Goodwill

12 Months Ended

Dec. 31, 2011

Goodwill [Abstract]

Goodwill

7.  Goodwill

Goodwill is the excess of cost over the estimated fair value of net assets acquired. Information regarding goodwill was as follows:

	December 31,
	2011			2010			2009
	(In millions)
Balance at January 1,	$	11,781		$	5,047		$	5,008
Acquisitions		39			6,959			—
Impairments (1)		(65	)		—			—
Effect of foreign currency translation and other		180			(225	)		39
Balance at December 31,	$	11,935		$	11,781		$	5,047

(1) At December 31, 2011, the Company’s accumulated goodwill impairment loss was $65 million.

Information regarding allocated goodwill by segment and reporting unit was as follows:

	December 31,
	2011		2010
	(In millions)
U.S. Business:
Insurance Products:
Group life	$	2	$	2
Individual life		1,263		1,263
Non-medical health		149		149
Total Insurance Products		1,414		1,414
Retirement Products		1,692		1,692
Corporate Benefit Funding		900		900
Auto & Home		157		157
Total U.S. Business		4,163		4,163
International:
Japan		5,371		—
Other International Regions:
Latin America		501		229
Asia Pacific		72		72
Europe		938		38
Middle East		485		—
Total International		7,367		339
Corporate & Other		405		470
Total	$	11,935	$	4,972

The table above does not include goodwill of $6.8 billion at December 31, 2010, associated with ALICO. In the first quarter of 2011, the Company began reporting the results from its international operations in two separate segments to reflect a change in the manner in which the financial results are reviewed and evaluated by executive management. Consequently, $5.2 billion and $1.8 billion of goodwill were allocated in 2011 to the reporting unit in the Japan segment and to reporting units in the Other International Regions segment, respectively, each net of the associated foreign currency translations. See Note 2 for a description of acquisitions and dispositions.

As of November 1, 2011, American Life’s current and deferred income taxes were affected by measurement period adjustments, which resulted in a $39 million increase to the goodwill recorded as part of the Acquisition related to the Japan segment. See Note 15.

During the third quarter of 2011, the Company began exploring the sale of MetLife Bank’s depository business. As a result, in September 2011, the Company performed a goodwill impairment test on MetLife Bank, which was a separate reporting unit within Corporate & Other. A comparison of the fair value of the reporting unit, using a market multiple approach, to its carrying value indicated a potential for goodwill impairment. A further comparison of the implied fair value of the reporting unit’s goodwill with its carrying amount indicated that the entire amount of goodwill associated with MetLife Bank was impaired. Consequently, the Company recorded a $65 million goodwill impairment charge that is reflected as a net investment loss for the year ended December 31, 2011.

In addition, the Company performed its annual goodwill impairment tests of its other reporting units during the third quarter of 2011 based upon data at June 30, 2011 and concluded that the fair values of all reporting units were in excess of their carrying values and, therefore, goodwill was not impaired. Such tests are described in more detail in Note 1.

Based on the adverse economic conditions in 2011, which caused both equity markets and interest rates to decline, the Company assessed the need to update the annual impairment tests and identified only one reporting unit, Retirement Products, that warranted interim impairment testing. The results of the testing indicated that goodwill for the Retirement Products reporting unit was not impaired.

Management continues to evaluate current market conditions that may affect the estimated fair value of these 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.