Goodwill and Other Intangibles

Goodwill was allocated to reporting units that closely reflect the regions served by the Company: New York, Boston, Washington, D.C., Philadelphia, Florida, California, Puerto Rico and Switzerland. The Company has acquired several clubs in the first half of 2019 and has recorded goodwill as applicable to the appropriate regions. Goodwill for all acquisitions was recorded at fair value at the time of such acquisitions and may have changes to the balances up to one year after acquisition. As of March 31, 2020, the New York, Boston, California, Florida, Puerto Rico and Switzerland regions have a goodwill balance.

Entities that have one or more reporting units with zero or negative carrying amounts of net assets shall disclose those reporting units with allocated goodwill and the amount of goodwill allocated to each and in which reportable segment the reporting unit is included. The Company's New York and Boston reporting units have negative carrying value as of March 31, 2020 and therefore were not subject to goodwill impairments.

The Company’s annual goodwill impairment test is performed on August 1, or more frequently, should circumstances change which would indicate the fair value of goodwill is below its carrying amount.

As a result of the sustained decline in the Company's market capitalization and changes in the Company's long-term projections driven largely by the impacts of the COVID-19 pandemic, the Company determined a triggering event had occurred that required an interim impairment assessment for all of its reporting units and indefinite lived intangible assets. The Company determined the fair value of each of its reporting units using a market approach, an income approach, or a combination of both, where appropriate. Relative to the prior assessment, as part of this current assessment, it was determined that an increase in the discount rate applied in the valuation was required to align with market-based assumptions and company-specific risk. This higher discount rate, in conjunction with revised long-term projection resulted in lower fair values of the reporting units. As a result, the Company recognized impairment charges of $16,426 for goodwill and $983 for other intangible assets during the first quarter of 2020.

The changes in the carrying amount of goodwill from December 31, 2019 through March 31, 2020 are detailed in the chart below:



	New York			Boston			California		Florida			Puerto Rico			Switzerland			Total
Goodwill	$	38,371		$	23,938		$	1,584	$	12,704		$	2,648		$	1,175		$	80,420
Changes due to foreign currency exchange rate fluctuations	—			—			—		—			—			(108		)	(108		)
Less: accumulated impairment of goodwill	(31,549		)	(15,775		)	—		—			—			—			(47,324		)
Balance as of December 31, 2019	6,822			8,163			1,584		12,704			2,648			1,067			32,988
Impairment of goodwill	—			—			—		(12,704		)	(2,648		)	(1,074		)	(16,426		)
Changes due to foreign currency exchange rate fluctuations	—			—			—		—			—			7			7
Balance as of March 31, 2020	$	6,822		$	8,163		$	1,584	$	—		$	—		$	—		$	16,569

Amortization expense was $699 and $746 for the three months ended March 31, 2020 and 2019 respectively. Impairment charges for intangible assets were $983 for the three months ended March 31, 2020 while no impairment charges were recorded for the three months ended March 31, 2019. Intangible assets are as follows:



	As of March 31, 2020										As of December 31, 2019
	Gross Carrying Amount		Accumulated Amortization			Impairment			Net Intangible Assets		Gross Carrying Amount		Accumulated Amortization			Impairment		Net Intangible Assets
Membership lists	$	7,652	$	(6,738	)	$	(145	)	$	769	$	7,652	$	(6,385	)	—		$	1,267
Non-compete agreements	3,761		(1,202		)	—			2,559		3,761		(1,013		)	—		2,748
Trade names⁽¹⁾	5,071		(1,023		)	(838		)	3,210		5,071		(866		)	—		4,205
	$	16,484	$	(8,963	)	$	(983	)	$	6,538	$	16,484	$	(8,264	)	$	—	$	8,220


(1)	In the second quarter of 2019, the Company discontinued the TMPL trade name and wrote off the remaining net balance of $180.