Delek US Holdings, Inc.DK

Delek US Holdings, Inc. Goodwill & Intangibles Disclosure

10-KFiled Feb 26, 20253 min read
Goodwill and Intangible Assets
Goodwill
We performed our annual goodwill impairment review in the fourth quarter of 2024, 2023 and 2022. This review was performed at the reporting unit level, which is at or one level below our operating segment. For a quantitative assessment, we estimated the value of each of our reporting units using a discounted cash flows ("DCF") analysis and a multiple of expected future cash flows, such as those used by third-party analysts. The DCF analysis included a market participant weighted average cost of capital, forecasted crack spreads, future volumes, gross margin, capital expenditures, and long-term growth rate based on historical information and our best estimate of future forecasts. The market approach involves significant judgment, including selection of an appropriate peer group, selection of valuation multiples, and determination of the appropriate weighting in our valuation model.
With respect to the goodwill associated with the reporting units within the logistics segment, we performed a qualitative assessment in 2024 and 2022. For 2023, we performed a quantitative assessment on the Delaware Gathering reporting unit and a qualitative assessment for our other reporting units. Our 2023 testing of goodwill did not identify any impairments other than our Delaware Gathering reporting unit, which reported a goodwill impairment charge of $14.8 million. The impairment was primarily driven by the significant increases in interest rates and timing of system connections with our producer customers.
With respect to the goodwill associated with the reporting units within the refining segment, we performed a quantitative assessment in 2024 and a qualitative assessment in 2023 and 2022. Our 2024 testing of goodwill did not identify any impairments other than our Krotz Springs reporting unit, which reported a goodwill impairment charge of $212.2 million. The impairment was primarily driven by depressed crack spread pricing in the near term combined with an increased discount rate.
For the years ended December 31, 2024 and 2023, the annual impairment review resulted in an impairment charge of $212.2 million and $14.8 million, respectively, which is included in asset impairment in the consolidated statements of income. For the year ended December 31, 2022, there was no goodwill impairment charge.
A summary of our goodwill by segment is as follows (in millions):
RefiningLogisticsCorporate, Other and EliminationsTotal
Gross goodwill balance$801.3 $27.0 $— $828.3 
Accumulated impairment losses(126.0)— — (126.0)
Balance,December 31, 2022675.3 27.0 — 702.3 
Goodwill Impairment— (14.8)— (14.8)
Gross goodwill balance801.3 27.0 — 828.3 
Accumulated impairment losses(126.0)(14.8)— (140.8)
Balance,December 31, 2023675.3 12.2 — 687.5 
Goodwill Impairment(212.2)— — (212.2)
Gross goodwill balance801.3 27.0 — 828.3 
Accumulated impairment losses(338.2)(14.8)— (353.0)
Balance,December 31, 2024$463.1 $12.2 $— $475.3 
Intangibles
A summary of our identifiable intangible assets are as follows (in millions):
As of December 31, 2024
As of December 31, 2023
Useful LifeGrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Intangible Assets subject to amortization:
Supply contract5 years$4.8 $(0.3)$4.5 $— $— $— 
Third-party fuel supply agreement10 years49.0 (36.7)12.3 49.0 (31.8)17.2 
Rights-of-way
8 - 35 years
15.0 (1.9)13.1 15.0 (1.1)13.9 
Customer relationships
11 - 13.4 years
234.2 (47.3)186.9 210.0 (28.7)181.3 
Intangible assets not subject to amortization:
Rights-of-wayIndefinite90.7 90.7 61.2 61.2 
Line space historyIndefinite12.0 12.0 12.0 12.0 
Refinery permitsIndefinite2.1 2.1 2.1 2.1 
Total$407.8 $(86.2)$321.6 $349.3 $(61.6)$287.7 
Amortization of intangible assets was $24.6 million, $23.7 million and $16.2 million during the years ended December 31, 2024, 2023 and 2022, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.
Amortization expense for the next five years is estimated to be as follows (in millions):
2025$26.5 
2026$26.5 
2027$24.1 
2028$21.6 
2029$21.1 
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Historical Timeline

Fiscal YearFiled
2024Feb 26, 2025Showing above
2023Feb 28, 2024
2022Mar 1, 2023
2021Feb 25, 2022
2020Mar 1, 2021
2019Feb 28, 2020
2018Mar 1, 2019
2017Mar 1, 2018

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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