Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Information

Schedule of Revenue from External Customers By Segment

The following table presents revenue from external customers by segment (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Continuing franchise fees (a)	$	22,799	$	24,096	$	61,471	$	72,191
Annual dues		8,638		8,835		26,304		26,508
Broker fees		15,457		13,292		35,327		35,339
Franchise sales and other revenue		4,058		4,858		16,126		17,252
Total RE/MAX Franchising		50,952		51,081		139,228		151,290
Continuing franchise fees		1,540		1,072		3,749		2,827
Franchise sales and other revenue		366		106		685		340
Total Motto Franchising		1,906		1,178		4,434		3,167
Marketing Funds fees (a)		17,290		18,034		46,577		54,866
Other		925		1,248		3,313		4,777
Total revenue	$	71,073	$	71,541	$	193,552	$	214,100

(a) For the Nine Months ended September 30, 2020, Continuing franchise fees and Marketing Funds fees declined primarily due to the temporary COVID-19 related financial support programs offered to franchisees.

Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment

The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Adjusted EBITDA: RE/MAX Franchising	$	30,959	$	29,134	$	71,008	$	83,299
Adjusted EBITDA: Motto Franchising		(176)		(652)		(1,495)		(2,112)
Adjusted EBITDA: Other		(448)		(324)		(730)		(157)
Adjusted EBITDA: Consolidated		30,335		28,158		68,783		81,030
Gain (loss) on sale or disposition of assets		11		10		33		(353)
Impairment charge - leased assets (a)		(7,902)		—		(7,902)		—
Equity-based compensation expense		(3,414)		987		(8,347)		(4,860)
Acquisition-related expense (b)		(1,021)		(181)		(1,915)		(268)
Fair value adjustments to contingent consideration (c)		(250)		15		105		(330)
Interest income		25		412		328		1,074
Interest expense		(2,159)		(3,089)		(7,028)		(9,398)
Depreciation and amortization		(6,850)		(5,595)		(19,572)		(16,694)
Income before provision for income taxes	$	8,775	$	20,717	$	24,485	$	50,201

(a) Represents the impairment recognized on a portion of the Company’s corporate headquarters office building. See Note 2, Summary of Significant Accounting Policies for additional information.

(b) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies.

(c) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 9, Fair Value Measurements for additional information.