Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2023

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, 2023						As of December 31, 2022
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.1	$	225,716	$	(124,200)	$	101,516	$	224,397	$	(104,223)	$	120,174
Other intangible assets:
Software (a)	4.1	$	52,918	$	(39,192)	$	13,726	$	48,658	$	(32,198)	$	16,460
Trademarks	9.1		971		(649)		322		1,713		(1,272)		441
Non-compete agreements	4.3		13,051		(8,156)		4,895		12,953		(4,878)		8,075
Training materials	—		2,400		(2,400)		—		2,400		(2,080)		320
Other	7.0		870		(637)		233		870		(403)		467
Total other intangible assets	4.3	$	70,210	$	(51,034)	$	19,176	$	66,594	$	(40,831)	$	25,763

(a) As of December 31, 2023 and 2022, capitalized software development costs of $1.0 million and $4.6 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 $29.9 million, $33.4 million and $29.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, 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):

2024	$	26,406
2025		22,701
2026		15,848
2027		9,021
2028		8,333
Thereafter		38,383
	$	120,692

The following table presents changes to goodwill by reportable segment for the period from January 1, 2022 to December 31, 2023(in thousands):

	Real Estate		Mortgage		Total
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, January 1, 2023	$	239,993	$	18,633	$	258,626
Purchase price adjustments		—		—		—
Impairment charge		—		(18,633)		(18,633)
Effect of changes in foreign currency exchange rates		1,171		—		1,171
Balance, December 31, 2023	$	241,164	$	—	$	241,164

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 2023, the Company tested and identified impairment indicators associated with the Mortgage reporting unit in the Mortgage Segment, primarily due to a decline in projected net cash flows resulting from continued macroeconomic pressures and revised franchise sales forecasts. Therefore, the Company fully impaired the reporting unit’s goodwill and recorded a non-cash impairment charge of $18.6 million in “Settlement and impairment charges” in the Consolidated Statements of Income (Loss).

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).