Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2022

Intangible Assets and Goodwill

Intangible Assets and Goodwill

8. 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 December 31, 2022						As of December 31, 2021
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.3	$	224,397	$	(104,223)	$	120,174	$	267,770	$	(123,938)	$	143,832
Other intangible assets:
Software (a)	4.0	$	48,658	$	(32,198)	$	16,460	$	51,368	$	(29,682)	$	21,686
Trademarks	8.6		1,713		(1,272)		441		2,356		(1,533)		823
Non-compete agreements	4.3		12,953		(4,878)		8,075		13,100		(4,563)		8,537
Training materials	5.0		2,400		(2,080)		320		2,400		(1,600)		800
Other	7.0		870		(403)		467		1,670		(986)		684
Total other intangible assets	4.3	$	66,594	$	(40,831)	$	25,763	$	70,894	$	(38,364)	$	32,530

(a) As of December 31, 2022 and 2021, capitalized software development costs of $4.6 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 $33.4 million, $29.1 million and $24.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 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):

2023		29,727
2024		25,159
2025		21,244
2026		14,584
2027		9,136
Thereafter		46,087
	$	145,937

The following table presents changes to goodwill by reportable segment for the period from January 1, 2021 to December 31, 2022 (in thousands):

	Real Estate		Mortgage		Total
Balance, January 1, 2021	$	146,725	$	18,633	$	165,358
Purchase price adjustments		133		—		133
Goodwill recognized from acquisitions		108,938		—		108,938
Impairment Charge		(5,123)		—		(5,123)
Effect of changes in foreign currency exchange rates		(191)		—		(191)
Balance, January 1, 2022	$	250,482	$	18,633	$	269,115
Purchase price adjustments		(332)		—		(332)
Impairment charge		(7,100)		—		(7,100)
Effect of changes in foreign currency exchange rates		(3,057)		—		(3,057)
Balance, December 31, 2022	$	239,993	$	18,633	$	258,626

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 fourth quarter of 2022, in connection with the strategic shift and restructuring of its business, the Company made the decision to wind down the Gadberry Group reporting unit in the Real Estate segment. Therefore, the Company fully impaired the Gadberry Group reporting unit goodwill and recorded a non-cash impairment charge of $7.1 million, in “Settlement and impairment charges” in the Consolidated Statements of Income (Loss).

During the third quarter of 2021, the Company identified impairment indicators associated with its First reporting unit in the Real Estate segment, primarily due to lower-than-expected adoption rates of the technology. 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 Consolidated Statements of Income (Loss).