Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Summary of Significant Accounting Policies

Schedule of deferred revenue for franchise sales and annual dues

The activity consists of the following (in thousands):

	Balance at				Revenue		Balance at
	January 1, 2023		New billings		recognized (a)		June 30, 2023
Franchise sales	$	25,281	$	3,815	$	(4,580)	$	24,516
Annual dues		14,164		17,549		(17,205)		14,508
Other		6,626		9,975		(13,712)		2,889
	$	46,071	$	31,339	$	(35,497)	$	41,913

(a) Revenue recognized related to the beginning balance for Franchise sales and Annual dues were $4.3 million and $10.7 million, respectively, for the six months ended June 30, 2023.

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, 2023		for new activity		recognized		June 30, 2023
Capitalized contract costs for commissions	$	3,974	$	1,462	$	(1,171)	$	4,265

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 2023		2024		2025		2026		2027		2028		Thereafter		Total
Annual dues	$	11,295	$	3,213	$	—	$	—	$	—	$	—	$	—	$	14,508
Franchise sales		3,581		6,365		5,175		3,816		2,393		1,114		2,072		24,516
Total	$	14,876	$	9,578	$	5,175	$	3,816	$	2,393	$	1,114	$	2,072	$	39,024

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				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
U.S. Company-Owned Regions	$	36,075	$	42,733	$	69,936	$	81,887
U.S. Independent Regions		1,752		1,877		3,228		3,578
Canada Company-Owned Regions		10,541		11,434		20,339		21,909
Canada Independent Regions		723		715		1,447		1,418
Global		3,204		3,193		6,402		6,285
Fee revenue (a)		52,295		59,952		101,352		115,077
Franchise sales and other revenue (b)		5,264		5,824		16,837		15,436
Total Real Estate		57,559		65,776		118,189		130,513
U.S.		16,100		17,641		32,405		35,200
Canada		4,721		4,988		9,484		10,001
Global		256		280		530		559
Total Marketing Funds		21,077		22,909		42,419		45,760
Mortgage (c)		3,616		3,115		6,804		6,143
Other (c)		195		372		436		760
Total	$	82,447	$	92,172	$	167,848	$	183,176

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

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

(c) 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):

	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	96,757	$	108,663
Restricted cash		17,679		29,465
Total cash, cash equivalents and restricted cash	$	114,436	$	138,128

Schedule of cost charges to intersegment

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Technology − operating	$	1,169	$	3,519	$	2,338	$	7,743
Technology − capital(a)		—		530		(203)		1,161
Marketing staff and administrative services		1,483		1,140		2,975		2,681
Total	$	2,652	$	5,189	$	5,110	$	11,585

(a) During the first quarter of 2023, the Company determined that certain development projects were no longer needed and therefore $0.2 million, reflecting the cost of work in process assets that would no longer be placed in service, was refunded to the Marketing Funds.