Goodwill

In 2016 and 2015, our annual goodwill impairment test indicated that goodwill was not impaired. In 2014, our annual goodwill impairment test indicated that the goodwill of the Land Drilling Rigs reporting units in Latin America, Europe and Asia Pacific was impaired. The results of our “step-one” analysis were accompanied by other indicators in the form of a decline in the anticipated utilization rates for our drilling rig fleet. Responsive to the impairment indicators noted, we performed a “step two” analysis, comparing the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. The “step two” analysis indicated that the goodwill for these reporting units was fully impaired and we recognized an impairment loss of $40 million related to Land Drilling Rigs segment in Latin America, Europe and Asia Pacific.

In addition, during the second quarter of 2014, we engaged in negotiations to sell our land drilling and workover operations in Russia and Venezuela, and we subsequently entered into an agreement to sell the business in July 2014. During this time frame we expected the sale would significantly impact the revenues and results of operations of our Russia reporting unit, and consequently, we considered the associated circumstances to assess whether an event or change had occurred that, more likely than not, reduced the fair value of our reporting units below their carrying amount. We concluded that the planned sale represented an indicator of impairment, and we prepared the analysis necessary to identify the potential impairment and recognize any necessary impairment loss. The analysis indicated that the goodwill for the Russia reporting unit was impaired, and we recognized a goodwill impairment loss of $121 million, $95 million of which pertained to goodwill that had been reclassified during 2014 into current assets held for sale. See “Note 2 – Business Combinations and Divestitures” for additional information regarding the non-cash impairment charges to our assets held for sale.

The changes in the carrying amount of goodwill by reportable segment for the two years ended December 31, 2016 and 2015, were as follows:



(Dollars in millions)	North America			MENA/ Asia Pacific			Europe/ SSA/ Russia			Latin America			Total
Balance at December 31, 2014	$	1,896		$	195		$	623		$	297		$	3,011
Acquisitions	3			—			—			—			3
Purchase price and other adjustments	—			1			—			—			1
Foreign currency translation	(143		)	(6		)	(50		)	(13		)	(212		)
Balance at December 31, 2015	$	1,756		$	190		$	573		$	284		$	2,803
Foreign currency translation	21			(1		)	(30		)	4			(6		)
Balance at December 31, 2016	$	1,777		$	189		$	543		$	288		$	2,797