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Intangible Assets and Goodwill
6 Months Ended
Jun. 30, 2020
Intangible Assets and Goodwill  
Intangible Assets and Goodwill

6. 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):

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Weighted

    

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Average

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As of June 30, 2020

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As of December 31, 2019

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Amortization

​

Initial

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Accumulated

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Net

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Initial

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Accumulated

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Net

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Period

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Cost

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Amortization

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Balance

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Cost

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Amortization

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Balance

Franchise agreements

​

12.5

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$

180,867

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$

(100,934)

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$

79,933

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$

180,867

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$

(93,197)

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$

87,670

Other intangible assets:

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Software (a)

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4.3

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$

36,946

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$

(13,628)

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$

23,318

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$

36,680

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$

(9,653)

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$

27,027

Trademarks

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9.0

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​

2,021

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(1,148)

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​

873

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​

1,904

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(1,037)

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​

867

Non-compete agreements

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4.5

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​

3,700

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(2,168)

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​

1,532

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​

3,700

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(1,546)

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​

2,154

Training materials

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5.0

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​

2,400

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(880)

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​

1,520

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​

2,400

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(640)

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​

1,760

Other

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3.8

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​

810

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​

(425)

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​

385

​

​

800

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​

(293)

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​

507

Total other intangible assets

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4.6

​

$

45,877

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$

(18,249)

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$

27,628

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$

45,484

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$

(13,169)

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$

32,315

(a)As of June 30, 2020 and December 31, 2019, capitalized software development costs of $0.8 million and $10.5 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization.

Amortization expense for the three months ended June 30, 2020 and 2019 was $6.0 million and $5.1 million, respectively. Amortization expense for the six months ended June 30, 2020 and 2019 was $11.8 million and $10.3 million, respectively.

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

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As of June 30, 2020:

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Remainder of 2020

$

17,556

2021

​

26,133

2022

​

19,516

2023

​

15,371

2024

​

12,916

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$

91,492

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

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RE/MAX
Franchising

    

Motto Franchising

    

Total

Balance, January 1, 2020

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​

​

$

147,238

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$

11,800

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$

159,038

Goodwill recognized from acquisitions(a)

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​

​

​

2,927

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​

—

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​

2,927

Effect of changes in foreign currency exchange rates

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​

​

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(151)

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—

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(151)

Balance, June 30, 2020

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​

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$

150,014

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$

11,800

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$

161,814

(a)The purpose of the First acquisition is to deliver technology solutions to RE/MAX franchisees and agents. As such, the Company allocated the goodwill arising from this acquisition to RE/MAX Franchising. The change in goodwill relates to updates to the initial purchase price allocation.

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