Goodwill

Goodwill is tested for impairment on an annual basis as of April 1 each year, or when events or changes in circumstances indicate the fair value of a reporting unit with goodwill may have been reduced below its carrying value. Goodwill is tested for impairment at the reporting unit level. Our reporting units are the same as our reporting segments, of which only North America E&P and International E&P include goodwill. We estimated the fair values of the North America E&P and International E&P reporting units using a combination of market and income approaches. Determining the fair value of a reporting unit requires judgment and the use of significant estimates and assumptions. The market approach referenced observable inputs specific to us and our industry, such as the price of our common equity, our enterprise value, and valuation multiples of us and our peers from the investor analyst community. The income approach utilized discounted cash flows, which were based on forecasted assumptions. Key assumptions to the income approach include: future liquid hydrocarbon and natural gas prices, estimated quantities of liquid hydrocarbon and natural gas proved and probable reserves, expected timing of production, discount rates, future capital requirements and operating expenses and tax rates. The assumptions used in the income approach are consistent with those that management uses to make business decisions. These valuation methodologies represent Level 3 fair value measurements. We believe the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in such assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated.

We performed our annual impairment tests as of April 1 in 2015, 2014 and 2013 and no impairment was required. The fair value of each of our reporting units with goodwill exceeded the book value. Subsequent to our goodwill impairment test in April 2015, triggering events (downward revisions to forecasted commodity price assumptions and sustained price declines in our common stock) required us to reassess our goodwill for impairment as of September 30, 2015 and December 31, 2015. We recorded an impairment of goodwill for the N.A. E&P reporting unit during the fourth quarter of 2015. While the fair value of our International E&P reporting unit exceeded book value, subsequent commodity price and/or common stock price declines may cause us to reassess our goodwill for impairment and could result in a non-cash impairment charge in the future.

The table below displays the allocated beginning goodwill balances by segment along with changes in the carrying amount of goodwill for 2015 and 2014:



(In millions)	N.A. E&P			Int'l E&P			OSM			Total
2014
Beginning balance, gross	$	347		$	152		$	1,412		$	1,911
Less: accumulated impairments	—			—			(1,412		)	(1,412		)
Beginning balance, net	347			152			—			499
Dispositions	(3		)	(37		)	—			(40		)
Ending balance, net	$	344		$	115		$	—		$	459
2015
Beginning balance, gross	$	344		$	115		$	1,412		$	1,871
Less: accumulated impairments	—			—			(1,412		)	(1,412		)
Beginning balance, net	344			115			—			459
Dispositions	(4		)	—			—			(4		)
Impairment	(340		)	—			—			(340		)
Ending balance, net	$	—		$	115		$	—		$	115