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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Other Intangible Assets

5. Goodwill and Other Intangible Assets

For the years ended December 31, 2024 and 2023, the Company performed its annual goodwill assessment for each of the years then ended, and determined that the fair value of each of its reporting units with goodwill exceeded its carrying value. Thus, no impairment charge for goodwill related to the Specialty Products and Solutions segment or Performance Brands segment was recorded in the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively. There is no goodwill within the reporting units for the Montana/Renewables segment or the Corporate segment.

Inputs used to estimate the fair value of the Company’s reporting units are considered Level 3 inputs of the fair value hierarchy and include the following:

●

The Company’s financial projections for its reporting units are based on its analysis of various supply and demand factors which include, among other things, industry-wide capacity, its planned utilization rate, end-user demand, crack spreads, capital expenditures and economic conditions. Such estimates are consistent with those used in the

Company’s planning and capital investment reviews and include recent historical prices and published forward prices.

●

The discount rate used to measure the present value of the projected future cash flows is based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible.

For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement.

Changes in goodwill balances for the periods indicated below are as follows (in millions):


		Specialty
		Products and		Performance		Consolidated
		Solutions		Brands		Total
Net balance as of December 31, 2022	$	49.3	$	123.7	$	173.0
Additions		—		—		—
Impairment ⁽¹⁾		—		—		—
Net balance as of December 31, 2023	$	49.3	$	123.7	$	173.0
Additions		—		—		—
Impairment ⁽¹⁾		—		—		—
Net balance as of December 31, 2024	$	49.3	$	123.7	$	173.0

(1)	Total accumulated goodwill impairment as of December 31, 2024 and 2023, is $35.5 million.

Other intangible assets consist of the following (in millions):


	Weighted	December 31, 2024				December 31, 2023
	Average Life			Accumulated				Accumulated
	(Years)	Gross Amount		Amortization		Gross Amount		Amortization
Customer relationships	20	$	181.8	$	(163.3)	$	181.8	$	(158.8)
Tradenames	9		26.8		(25.9)		26.8		(24.9)
Trade secrets	11		52.9		(51.8)		52.9		(51.2)
Patents	10		1.6		(1.6)		1.6		(1.6)
Royalty agreements	18		6.1		(4.6)		6.1		(4.2)
	17	$	269.2	$	(247.2)	$	269.2	$	(240.7)

Tradenames, trade secrets, patents and royalty agreements are being amortized to properly match expenses with the undiscounted estimated future cash flows over the terms of the related agreements or the period expected to be benefited. The costs of agreements with terms allowing for the potential extension of such agreements are being amortized based on the initial term only. Customer relationships are being amortized to properly match expenses with the undiscounted estimated future cash flows based upon assumed rates of annual customer attrition. For the years ended December 31, 2024, 2023 and 2022, the Company recorded amortization expense of intangible assets of $6.5 million, $7.8 million and $9.5 million, respectively.

As of December 31, 2024, the Company estimates that amortization of intangible assets for the next five years will be as follows (in millions):


	Amortization
Year	Amount
2025	$	4.9
2026	$	3.8
2027	$	3.2
2028	$	2.3
2029	$	1.8