Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2020

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):


	Weighted
	Average	As of June 30, 2020						As of December 31, 2019
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.5	$	180,867	$	(100,934)	$	79,933	$	180,867	$	(93,197)	$	87,670
Other intangible assets:
Software ^(a)	4.3	$	36,946	$	(13,628)	$	23,318	$	36,680	$	(9,653)	$	27,027
Trademarks	9.0		2,021		(1,148)		873		1,904		(1,037)		867
Non-compete agreements	4.5		3,700		(2,168)		1,532		3,700		(1,546)		2,154
Training materials	5.0		2,400		(880)		1,520		2,400		(640)		1,760
Other	3.8		810		(425)		385		800		(293)		507
Total other intangible assets	4.6	$	45,877	$	(18,249)	$	27,628	$	45,484	$	(13,169)	$	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):


As of June 30, 2020:
Remainder of 2020	$	17,556
2021		26,133
2022		19,516
2023		15,371
2024		12,916
	$	91,492

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


	RE/MAX Franchising		Motto Franchising		Total
Balance, January 1, 2020	$	147,238	$	11,800	$	159,038
Goodwill recognized from acquisitions^(a)		2,927		—		2,927
Effect of changes in foreign currency exchange rates		(151)		—		(151)
Balance, June 30, 2020	$	150,014	$	11,800	$	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.