7. Intangible Assets and Goodwill

The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years):


	Weighted
	Average	As of September 30, 2018						As of December 31, 2017
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.5	$	180,867	$	(73,835)	$	107,032	$	181,567	$	(62,218)	$	119,349
Other intangible assets:
Software(a)	4.6	$	22,916	$	(9,630)	$	13,286	$	13,762	$	(8,111)	$	5,651
Trademarks	9.3		1,859		(788)		1,071		1,539		(902)		637
Non-compete agreements	7.7		3,700		(733)		2,967		2,500		(312)		2,188
Training materials	5.0		2,350		—		2,350		—		—		—
Other(b)	11.9		2,389		(152)		2,237		—		—		—
Total other intangible assets	6.0	$	33,214	$	(11,303)	$	21,911	$	17,801	$	(9,325)	$	8,476

(a)

As of September 30, 2018 and December 31, 2017, capitalized software development costs of $2.4 million and $0.6 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization.

(b)

Other consists of customer relationships and a favorable market lease, both obtained in connection with the acquisition of booj. The favorable market lease is amortized as additional rent expense through “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income over the remaining term of the lease.

Amortization expense for the three months ended September 30, 2018 and 2017 was $5.3 million and $4.1 million, respectively. Amortization expense for the nine months ended September 30, 2018 and 2017 was $14.4 million and $15.1 million, respectively. Amounts for the three and nine months ended September 30, 2018 include the booj measurement period adjustment of $0.4 million. Refer to Note 6, Acquisitions for additional information.

As of September 30, 2018, the estimated future amortization expense for the next five years related to intangible assets includes the estimated amortization expense associated with the Company’s preliminary estimate of the acquisition date fair value of the intangible assets assumed with the acquisition of booj and is as follows (in thousands):


As of September 30, 2018:
Remainder of 2018	$	5,067
2019		20,597
2020		20,524
2021		19,741
2022		16,792
	$	82,721

The following table presents changes to goodwill for the period from January 1, 2018 to September 30, 2018 (in thousands):


	RE/MAX Franchising		Other		Total
Balance, January 1, 2018	$	123,413	$	11,800	$	135,213
Goodwill recognized related to current year acquisitions(a)		15,039		—		15,039
Adjustments to acquisition accounting during the measurement period		700		—		700
Effect of changes in foreign currency exchange rates		(93)		—		(93)
Balance, September 30, 2018	$	139,059	$	11,800	$	150,859

(a)

The purpose of the booj acquisition is to develop and deliver core technology solutions designed for and with RE/MAX franchisees and agents. As such, the Company expects the majority of goodwill arising from this acquisition to be allocated to RE/MAX Franchising. However, the allocation of goodwill between the RE/MAX Franchising segment and Other segment is preliminary and will be finalized in conjunction with the finalization of the purchase price allocation for booj. See Note 6, Acquisitions for additional information.