Fixed-asset Impairments

During the years ended December 31, 2017, 2016 and 2015, DPL had the following fixed-asset impairments:



		Years ended December 31,
$ in millions	Measurement Date	2017		2016		2015
AES Ohio Generation peakers	December 31, 2017	$	109.4	$	—	$	—
Stuart	March 31, 2017	39.1		—		—
Killen	March 31, 2017	27.3		—		—
Killen	December 31, 2016	—		75.4		—
Stuart	December 31, 2016	—		228.5		—
Miami Fort	December 31, 2016	—		149.4		—
Zimmer	December 31, 2016	—		144.7		—
Conesville	December 31, 2016	—		23.9		—
Hutchings peaking facilities	December 31, 2016	—		1.6		—
Killen	June 30, 2016	—		230.8		—
Certain peaking facilities	June 30, 2016	—		4.7		—
Total impairment loss		$	175.8	$	859.0	$	—

AES Ohio Generation peakers – In December 2017, AES Ohio Generation signed an agreement for the sale of its peaking and diesel generation assets. As a result of this transaction, DPL recognized an impairment of fixed assets in the amount of $109.4 million.

Stuart and Killen, March 17, 2017 – On March 17, 2017, the Board of Directors of DP&L approved the retirement of the Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine (collectively, the “Facilities”) on or before June 1, 2018. The co-owners of these facilities agreed with DP&L to proceed with this plan of retirement. We performed a long-lived asset impairment analysis and determined that the carrying amounts of the Facilities were not recoverable. The asset groups of Stuart Station and Killen Station were determined to have fair values of $3.3 million and $7.9 million, respectively, using the discounted cash flows under the income approach. As a result, we recognized asset impairment expense of $39.1 million and $27.3 million for Stuart Station and Killen Station, respectively.

Additionally, as a result of the decision to retire the Facilities by June 1, 2018, we concluded that inventory at these Facilities is considered obsolete. As a result, we recognized a loss on disposal of $9.8 million and $6.4 million for Stuart Station and Killen Station inventories, respectively, during the first quarter of 2017, which is recorded in Loss on asset disposal in the Consolidated Statements of Operations.

Killen, Stuart, Miami Fort, Zimmer, Conesville and Hutchings, December 31, 2016 – During the fourth quarter of 2016, we tested the recoverability of our long-lived coal-fired generation assets and one gas-fired peaking plant. Additional uncertainty around the useful life of Stuart and Killen related to the DP&L ESP proceedings along with lower expectations of forward dark spreads and capacity prices beyond the cleared period were collectively determined to be an impairment indicator for these assets. Market information indicating that there was a significant decrease in the fair value of the Miami Fort and Zimmer stations was determined to be an indicator of impairment for these assets. The lower forward dark spreads and capacity prices, along with the indicators at the other coal-fired facilities, collectively, resulted in an indicator of impairment for the Conesville asset group. For the gas-fired peaking plant, significant incremental capital expenditures relative to its fair value along with the fact that an impairment charge was previously taken at this facility in Q2 2016, were collectively determined to be an impairment indicator for this asset. We performed a long-lived asset impairment analysis for each of these asset groups and determined that their carrying amounts were not recoverable. The Killen, Stuart, Miami Fort, Zimmer and Conesville coal-fired facility asset groups and the Hutchings gas-fired peaking plant asset group were determined to have a fair value of $42.8 million, $57.4 million, $36.5 million, $23.7 million, $1.1 million and $1.6 million, respectively, using the market approach for Miami Fort and Zimmer and the income approach for the remaining asset groups. As a result, DPL recognized a total pre-tax asset impairment expense of $623.5 million.

Killen and DP&L peaking facilities, June 30, 2016 – During the second quarter of 2016, we tested the recoverability of our long-lived assets at certain of our generation facilities at DP&L. A ruling by the Supreme Court of Ohio on June 20, 2016, lower expectation of future capacity revenue resulting from the most recent PJM capacity auction and a higher anticipated level of environmental compliance costs resulting from third party studies were collectively determined to be an impairment indicator for these assets. We performed a long-lived asset impairment analysis and determined that the carrying amounts of Killen and certain DP&L peaking generating facilities were not recoverable. The asset groups of Killen and these DP&L peaking generating facilities were determined to have fair values of $84.3 million and $5.2 million, respectively, using the discounted cash flows under the income approach. As a result, DPL recognized an asset impairment expense of $230.8 million and $4.7 million for Killen and these DP&L peaking generating facilities, respectively.