Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of components of intangible assets

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 December 31, 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	$	(93,197)	$	87,670	$	180,867	$	(77,710)	$	103,157
Other intangible assets:
Software ^(a)	4.0	$	36,680	$	(9,653)	$	27,027	$	20,579	$	(5,802)	$	14,777
Trademarks	9.3		1,904		(1,037)		867		1,857		(839)		1,018
Non-compete agreements	7.7		3,700		(1,546)		2,154		3,700		(896)		2,804
Training materials	5.0		2,400		(640)		1,760		2,350		(157)		2,193
Other^(b)	5.0		800		(293)		507		2,389		(216)		2,173
Total other intangible assets	4.6	$	45,484	$	(13,169)	$	32,315	$	30,875	$	(7,910)	$	22,965

(a)	As of December 31, 2019, and December 31, 2018, capitalized software development costs of $10.5 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 Consolidated Balance Sheet upon adopting the new lease standard on January 1, 2019. See Note 2, Summary of Significant Accounting Policies for additional information.

Schedule of estimated future amortization of intangible assets, other than goodwill

As of December 31, 2019, the estimated future amortization expense for the next five years related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the acquisition of booj and is as follows (in thousands):


Year ending December 31:
2020	$	25,438
2021		25,122
2022		21,946
2023		14,594
2024		12,146
	$	99,246

Schedule of changes to goodwill

The following table presents changes to goodwill for the period from January 1, 2018 to December 31, 2019 (in thousands):


	RE/MAX Franchising		Motto Franchising		Total
Balance, January 1, 2018	$	123,413	$	11,800	$	135,213
Goodwill recognized related to acquisitions^(a)		15,039		—		15,039
Adjustments to acquisition accounting during the measurement period		700		—		700
Effect of changes in foreign currency exchange rates		(268)		—		(268)
Balance, December 31, 2018		138,884		11,800		150,684
Goodwill recognized related to acquisitions^(a)		8,207		—		8,207
Effect of changes in foreign currency exchange rates		147		—		147
Balance, December 31, 2019	$	147,238	$	11,800	$	159,038

(a)	The purpose of the booj and First acquisitions is to deliver technology solutions to RE/MAX franchisees and agents. As such, the Company allocated the goodwill arising from these acquisitions to RE/MAX Franchising. See Note 6, Acquisitions for additional information.