XML 24 R14.htm IDEA: XBRL DOCUMENT v3.22.2.2
Intangible Assets and Goodwill
9 Months Ended
Sep. 30, 2022
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):

Weighted

    

    

    

    

    

    

Average

As of September 30, 2022

As of December 31, 2021

Amortization

Initial

Accumulated

Net

Initial

Accumulated

Net

Period

Cost

Amortization

Balance

Cost

Amortization

Balance

Franchise agreements

12.6

$

264,274

$

(139,753)

$

124,521

$

267,770

$

(123,938)

$

143,832

Other intangible assets:

Software (a)

4.1

$

47,416

$

(29,223)

$

18,193

$

51,368

$

(29,682)

$

21,686

Trademarks

8.3

2,401

(1,833)

568

2,356

(1,533)

823

Non-compete agreements

4.3

12,899

(4,075)

8,824

13,100

(4,563)

8,537

Training materials

5.0

2,400

(1,960)

440

2,400

(1,600)

800

Other

6.6

870

(377)

493

1,670

(986)

684

Total other intangible assets

4.4

$

65,986

$

(37,468)

$

28,518

$

70,894

$

(38,364)

$

32,530

(a)As of September 30, 2022 and December 31, 2021, capitalized software development costs of $3.6 million and $1.9 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 was $8.3 million and $7.9 million for the three months ended September 30, 2022 and 2021, respectively and was $25.1 million and $20.6 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, the estimated future amortization expense related to intangible assets includes the estimated amortization expense associated with the Company’s intangible assets assumed with the Company’s acquisitions (in thousands):

Remainder of 2022

$

8,641

2023

29,866

2024

24,699

2025

20,596

2026

14,376

Thereafter

54,861

$

153,039

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

Real Estate

Mortgage

Total

Balance, January 1, 2022

$

250,482

$

18,633

$

269,115

Purchase price adjustments

(332)

(332)

Effect of changes in foreign currency exchange rates

(3,693)

(3,693)

Balance, September 30, 2022

$

246,457

$

18,633

$

265,090

Impairment charge - goodwill

The Company assesses goodwill for impairment at least annually or whenever an event occurs, or circumstances change that would indicate impairment may have occurred at the reporting unit level. Reporting units are driven by the level at which segment management reviews operating results.

During the third quarter of 2021, the Company identified impairment indicators associated with its First Leads, Inc. (“First”) reporting unit in the Real Estate segment, primarily lower than expected adoption rates of the technology in the third quarter and lower expected adoption rates estimated for the fourth quarter. This also resulted in a downward revision to the long-term adoption rate, which is a significant input in calculating the fair value of the reporting unit. Because of this, the Company performed an interim impairment test on the goodwill at its First reporting unit, as of August 31, 2021, using a discounted cash flow method. As a result of this impairment test, the Company recorded a non-cash impairment charge of $5.1 million, recorded in “Settlement and impairment charges” in the accompanying Condensed Consolidated Statements of Income (Loss).