Summary
Sempra Energy (SRE) announced on September 29, 2016, that its majority-owned subsidiary, IEnova, will record a material non-cash, after-tax impairment charge for its Termoeléctrica de Mexicali (TdM) power plant. The charge, estimated to be between $50 million and $90 million ($40 million to $73 million after noncontrolling interests), is due to the carrying value of the asset exceeding its recently assessed fair value, as management pursues a sale of the plant. This impairment reflects a reassessment of the asset's value in light of current market conditions and the ongoing sales process. While this impairment impacts the third quarter of 2016 results, investors should note that the company is providing extensive forward-looking risk disclosures. These disclosures cover a wide range of potential factors that could materially affect Sempra's future financial performance and operations, including economic, regulatory, and market conditions, as well as operational and project-specific risks. Investors are advised to carefully consider these risks alongside the company's financial statements.
Key Highlights
- 1Sempra Energy subsidiary IEnova is pursuing the sale of its Termoeléctrica de Mexicali (TdM) power plant.
- 2A non-cash, after-tax impairment charge of $50 million to $90 million will be recorded in Q3 2016 related to the TdM plant.
- 3The impairment is due to the fair value of the TdM plant being less than its carrying value.
- 4The carrying value of the asset is being reduced based on recent market information and analysis.
- 5The impairment charge after noncontrolling interests is estimated to be between $40 million and $73 million.
- 6The filing includes a comprehensive list of forward-looking statements and associated risk factors that could impact future results.