Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2019

Intangible Assets and Goodwill

Intangible Assets and Goodwill

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, 2019						As of December 31, 2018
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.5	$	180,867	$	(89,329)	$	91,538	$	180,867	$	(77,710)	$	103,157
Other intangible assets:
Software (a)	4.3	$	27,824	$	(8,534)	$	19,290	$	20,579	$	(5,802)	$	14,777
Trademarks	9.3		1,900		(988)		912		1,857		(839)		1,018
Non-compete agreements	7.7		3,700		(1,383)		2,317		3,700		(896)		2,804
Training materials	5.0		2,400		(520)		1,880		2,350		(157)		2,193
Other (b)	5.0		800		(253)		547		2,389		(216)		2,173
Total other intangible assets	5.0	$	36,624	$	(11,678)	$	24,946	$	30,875	$	(7,910)	$	22,965

(a) As of September 30, 2019 and December 31, 2018, capitalized software development costs of $8.2 million and $4.5 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 was subsumed into “Operating lease right of use assets” on the accompanying Condensed Consolidated Balance Sheet upon adopting the new lease standard on January 1, 2019. See Note 2, Summary of Significant Accounting Policies for additional information.

Amortization expense for the three months ended September 30, 2019 and 2018 was $5.2 million and $5.3 million, respectively. Amortization expense for the nine months ended September 30, 2019 and 2018 was $15.5 million and $14.4 million, respectively.

The estimated future amortization expense for the next five years related to intangible assets is as follows (in thousands):

As of September 30, 2019:
Remainder of 2019	$	5,461
2020	$	23,168
2021	$	22,361
2022	$	19,064
2023	$	14,353

The following table presents changes to goodwill (in thousands), by segment:

	RE/MAX Franchising		Other		Total
Balance, January 1, 2019	$	138,884	$	11,800	$	150,684
Effect of changes in foreign currency exchange rates		92		—		92
Balance, September 30, 2019	$	138,976	$	11,800	$	150,776