Note 6 - Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchase method of accounting. In 2018, due to a significant selling price correction leading to unfavorable market conditions, the Company performed a quantitative test by weighting the results of an income-based valuation technique, the discounted cash flows method, and a market-based valuation technique to determine its reporting units’ fair values.

Based on the results of the impairment assessments of goodwill and other intangible assets performed in 2018, the Company concluded that it is more likely than not that the fair value of its goodwill exceeds the carrying value and that there are no impairment indicators related to intangible assets.

During the second quarter of 2019, the Company's performance has been negatively impacted by the challenging pricing environment affecting the industry and the market, leading to an increase in inventory reserves for certain gases. However, the Company has also experienced higher volumes of refrigerant inventory sold during the second quarter of 2019 when compared to the second quarter of 2018. While the Company does not believe that its goodwill is impaired at June 30, 2019, it will further assess the impact of lower prices and higher volume through the nine month selling season, which culminates in September 2019 and coincides with its October 1 annual impairment testing date. To the extent that the future cash flows are negatively impacted by the current conditions, the Company may determine that goodwill is impaired. See Note 1 for further details.

At June 30, 2019 the Company had $47.8 million of goodwill, of which $47.0 million is attributable to the acquisition of Aspen Refrigerants, Inc. on October 10, 2017.

The Company’s other intangible assets consist of the following:


		June 30, 2019						December 31, 2018
	Amortization	Gross						Gross
	Period	Carrying		Accumulated				Carrying		Accumulated
(in thousands)	(in years)	Amount		Amortization			Net	Amount		Amortization			Net
Intangible assets with determinable lives
Patents	5	$	386	$	382	$	4	$	386	$	380	$	6
Covenant not to compete	6 - 10		1,270		706		564		1,270		629		641
Customer relationships	10 - 12		31,660		5,275		26,385		31,660		3,952		27,708
Above market leases	13		567		76		491		567		54		513
Licenses	10		1,000		467		533		1,000		417		583
Totals identifiable intangible assets		$	34,883	$	6,906	$	27,977	$	34,883	$	5,432	$	29,451

Amortization expense for the six months ended June 30, 2019 and 2018 was $1.5 million and $1.5 million, respectively. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. No impairment charges were recognized for the six month period ended June 30, 2019 and for the year ended December 31, 2018.