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 estimate the fair values of the North America E&P and International E&P reporting units using an income approach. Determining the fair value of a reporting unit requires judgment and the use of significant estimates and assumptions. The discounted cash flows that served as the primary basis for the income approach were based on forecasted assumptions. Key assumptions 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. These assumptions used to determine fair value estimates are consistent with those that management uses to make business decisions. We believe the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in any of the 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 during 2014, 2013 and 2012 and no impairment was required. The fair value of each of our reporting units with goodwill exceeded the book value.

The table below displays the allocated beginning goodwill balances by segment along with changes in the carrying amount of goodwill for 2014 and 2013:



(In millions)	N.A. E&P				Int'l E&P			OSM			Total
2013
Beginning balance, gross	$	343			$	182		$	1,412		$	1,937
Less: accumulated impairments	—				—			(1,412		)	(1,412		)
Beginning balance, net	343				182			—			525
Dispositions	4			^(a)	(30		)	—			(26		)
Ending balance, net	$	347			$	152		$	—		$	499
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

^(a)Goodwill related to our Alaska disposition was less than the estimate classified as held for sale in 2012.

After we performed our annual impairment test in April 2014, there was a substantial decline in commodity prices. The resulting change in future commodity price assumptions was a triggering event which required us to reassess our goodwill for impairment as of December 31, 2014. Based on the results of this assessment, we concluded no impairment was required. The fair value of each of our reporting units with goodwill exceeded the book value by a significant amount. A period of sustained reduced commodity prices could result in non-cash impairment charges related to goodwill in future periods.