Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Schedule of deferred revenue for franchise sales and annual dues

Deferred revenue is primarily driven by Franchise sales and Annual dues, as discussed above, and is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets. Other deferred revenue is primarily related to events-related revenue. The activity consists of the following (in thousands):
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	Balance at				Revenue		Balance at
	January 1, 2022		New billings		recognized (a)		September 30, 2022
Franchise sales	$	26,043	$	5,839	$	(6,387)	$	25,495
Annual dues		15,020		26,673		(26,847)		14,846
Other		5,044		18,040		(19,421)		3,663
	$	46,107	$	50,552	$	(52,655)	$	44,004

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $5.9 million and $13.8 million, respectively, for the nine months ended September 30, 2022.

Schedule of commissions related to franchise sales

The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands):

			Additions to
	Balance at		contract cost		Expense		Balance at
	January 1, 2022		for new activity		recognized		September 30, 2022
Capitalized contract costs for commissions	$	4,010	$	1,316	$	(1,491)	$	3,835

Schedule of transaction price allocated to the remaining performance obligations

The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands):

	Remainder of 2022		2023		2024		2025		2026		2027		Thereafter		Total
Annual dues	$	6,986	$	7,860	$	—	$	—	$	—	$	—	$	—	$	14,846
Franchise sales		1,875		6,718		5,550		4,313		2,920		1,507		2,612		25,495
Total	$	8,861	$	14,578	$	5,550	$	4,313	$	2,920	$	1,507	$	2,612	$	40,341

Schedule of disaggregated revenue

In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions, where applicable, by segment and by geographical area (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
U.S. Company-Owned Regions (a)	$	39,975	$	42,922	$	121,862	$	113,081
U.S. Independent Regions (a)		1,819		2,592		5,397		9,610
Canada Company-Owned Regions (a)		10,764		8,889		32,673		17,243
Canada Independent Regions (a)		723		1,258		2,141		5,827
Global		2,908		2,967		9,193		8,462
Fee revenue (b)		56,189		58,628		171,266		154,223
Franchise sales and other revenue (c)		6,466		5,995		21,902		17,845
Total Real Estate		62,655		64,623		193,168		172,068
U.S. (a)		17,186		18,471		52,386		51,012
Canada (a)		5,201		4,541		15,202		7,702
Global		349		257		908		742
Total Marketing Funds		22,736		23,269		68,496		59,456
Mortgage (d)		3,194		2,620		9,337		7,353
Other (d)		358		485		1,118		1,661
Total	$	88,943	$	90,997	$	272,119	$	240,538

(a) In July 2021, the Company acquired the operating companies of the North America regions of INTEGRA. Fee revenue from these regions were previously recognized in the U.S. and Canada Independent Regions. See Note 5, Acquisitions and Dispositions, for information related to this transaction.

(b) Fee revenue includes Continuing franchise fees, Annual dues and Broker fees.

(c) Franchise sales and other revenue is derived primarily within the U.S.

(d) Revenue from Mortgage and Other are derived exclusively within the U.S.

Schedule of reconciliation of cash, both unrestricted and restricted

The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands):

	September 30,		December 31,
	2022		2021
Cash and cash equivalents	$	117,899	$	126,270
Restricted cash		31,399		32,129
Total cash, cash equivalents and restricted cash	$	149,298	$	158,399

Schedule of cost charges to intersegment

Costs charged from Real Estate to the Marketing Funds are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Technology − operating	$	3,526	$	3,213	$	11,269	$	10,046
Technology − capital (a)		(277)		243		884		647
Marketing staff and administrative services		1,493		1,725		4,174		4,032
Total	$	4,742	$	5,181	$	16,327	$	14,725

During the third quarter of 2022, due to the Company’s restructuring, the cost of work in process assets that would no longer be placed in service totaling $0.5 million was refunded to the Marketing Funds.