MetLife 2013 Annual Report Download - page 179

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
11. Goodwill (continued)
assumptions and discount rates. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include
projected operating earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates,
comparative market multiples, 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.
When testing goodwill for impairment, the Company also considers its market capitalization in relation to the aggregate estimated fair value of its
reporting units. The Company applies significant judgment when determining the estimated fair value of the Company’s reporting units and when
assessing the relationship of market capitalization to the aggregate estimated fair value of its reporting units.
The valuation methodologies utilized are subject to key judgments and assumptions that are sensitive to change. Estimates of fair value are
inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and
assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Declines in the estimated fair
value of the Company’s reporting units could result in goodwill impairments in future periods which could materially adversely affect the Company’s
results of operations or financial position.
During the 2013 annual goodwill impairment tests, the Company concluded that the fair values of all reporting units were in excess of their carrying
values and, therefore, goodwill was not impaired.
Information regarding goodwill by segment, as well as Corporate & Other, was as follows:
Retail
Group,
Voluntary &
Worksite
Benefits
Corporate
Benefit
Funding Latin America Asia (1) EMEA Corporate & Other (2) Unallocated Goodwill Total
(In millions)
Balance at January 1, 2011
Goodwill .............................. $3,125 $138 $900 $ 229 $ 72 $ 38 $ 470 $ 6,809 $11,781
Accumulated impairment .................. — — — — — — — — —
Total goodwill, net ..................... 3,125 138 900 229 72 38 470 6,809 11,781
Goodwill allocation (3) .................... — — — 312 5,163 1,334 — (6,809) —
Acquisitions (4) ......................... — — — — 39 — — — 39
Impairments (5) ......................... — — — — — — (65) — (65)
Effect of foreign currency
translation and other ................... — — — (40) 259 (39) — — 180
Balance at December 31, 2011
Goodwill .............................. 3,125 138 900 501 5,533 1,333 470 — 12,000
Accumulated impairment .................. — — — — — — (65) — (65)
Total goodwill, net ..................... 3,125 138 900 501 5,533 1,333 405 — 11,935
Acquisitions ............................ — — — — — 1 — — 1
Impairments (6) ......................... (1,692) — — — — — (176) — (1,868)
Effect of foreign currency
translation and other ................... — — — 26 (146) 5 — — (115)
Balance at December 31, 2012
Goodwill .............................. 3,125 138 900 527 5,387 1,339 470 — 11,886
Accumulated impairment .................. (1,692) — — — — — (241) — (1,933)
Total goodwill, net ..................... 1,433 138 900 527 5,387 1,339 229 — 9,953
Acquisitions (7) ......................... — — — 1,140 — 1 — — 1,141
Dispositions ............................ — — — — — (8) — — (8)
Reduction of goodwill (5) .................. — — — — — — (65) — (65)
Reduction of accumulated impairment (5) ..... — — — — — — 65 — 65
Effect of foreign currency
translation and other ................... — — — (79) (489) 24 — — (544)
Balance at December 31, 2013
Goodwill .............................. 3,125 138 900 1,588 4,898 1,356 405 — 12,410
Accumulated impairment .................. (1,692) — — — — — (176) — (1,868)
Total goodwill, net ..................... $1,433 $138 $900 $1,588 $4,898 $1,356 $ 229 $ — $10,542
(1) Includes goodwill of $4.7 billion, $5.2 billion and $5.4 billion from the Japan operations at December 31, 2013, 2012 and 2011, respectively.
MetLife, Inc. 171