Power company AES (NYSE:AES) said on Tuesday it will recognize a pre-tax impairment charge of between $110 million to $125 million in the third quarter for 39 wind turbines currently in storage.
AES said the charge will not impact its cash flows or cash balances and is not expected to result in any material future cash expenditures, however the impairment is expected to hurt its 2011 share guidance by about nine or 10 cents a share.
The Arlington, Va.-based global utility provider said the charge, which will be marked under property, plant and equipment under its financial statements for the three months ended Sept. 30, is related to assets that are in storage until additional wind turbines are installed.
The company is selling the 39 turbines so that it can acquire turbines with more advanced technology and take advantage of reduced prices.
AES is still evaluating its other long-lived assets as part of its normal quarterly close process and said any other impairments will be disclosed when it releases third-quarter earnings.