Delek Logistics Partners, LPDKL

Delek Logistics Partners, LP Goodwill & Intangibles Disclosure

10-KFiled Feb 26, 20252 min read
Goodwill
Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized. We perform an annual assessment of whether goodwill retains its value. This assessment is done more frequently if indicators of potential impairment exist. We performed our annual goodwill impairment review in the fourth quarter of 2024, 2023, and 2022.
For the years ended December 31, 2024 and 2022, we performed a qualitative assessment. The annual impairment review resulted in the determination that no indicators of impairment of goodwill were present.
For the year ended December 31, 2023, we performed a quantitative assessment for our 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.
For the quantitative assessment, we estimated the value of each of the reporting unit using a discounted cash flows ("DCF") analysis. The significant assumptions that were used to develop the estimates of the fair values under the DCF method included management’s best estimates of the discount rate of 16% as well as estimates of future cash flows, which are impacted primarily by volume and EBITDA projections. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be an accurate prediction of the future. The fair value measurements for the individual reporting units represent Level 3 measurements.
Accumulated goodwill impairment was $14.8 million as of December 31, 2024 and 2023.
A summary of our goodwill by segment is as follows (in thousands):
Gathering and ProcessingWholesale Marketing and Terminalling Storage and Transportation Total
December 31, 2022$19,003 $7,499 $549 $27,051 
Goodwill Impairment(14,848)— — (14,848)
December 31, 20234,155 7,499 549 12,203 
December 31, 2024$4,155 $7,499 $549 $12,203 
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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
2017Mar 1, 2018
2016Feb 28, 2017
2015Feb 29, 2016

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

Income TaxesRevenueEarnings Per ShareFair ValuePP&ELeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance