SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 27, 2002
(February 18, 2002)
WESTERN RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
KANSAS 1-3523 48-0290150
(State or Other Jurisdiction of (Commission (Employer
Incorporation or Organization) File Number) Identification No.)
818 KANSAS AVENUE, TOPEKA, KANSAS 66612
(Address of Principal Executive Offices) (Zip Code)
(785)-575-6300
(Registrant's Telephone Number Including Area Code)
WESTERN RESOURCES, INC.
Item 5. Other Events
On February 18, 2002, we issued a press release announcing financial
results for the fiscal year ended December 31, 2001, and the amount of a charge
to be recorded in the first quarter of 2002 as a result of the adoption of new
accounting standards related to accounting for goodwill and intangible assets. A
copy of the press release is attached to this report.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 - Press release issued February 18, 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Western Resources, Inc.
Date February 27, 2002 By /s/ Paul R. Geist
----------------- ---------------------------------
Paul R. Geist, Senior Vice
President and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Number Description of Exhibit
99.1 Press release issued February 18, 2002
Exhibit 99.1
Media contact:
FAX: 785.575.6399
News@wr.com
WESTERN RESOURCES ANNOUNCES FISCAL 2001 RESULTS AND IMPACT OF ADOPTION OF
NEW ACCOUNTING STANDARDS AND MAINTAINS 2002
TARGETS
TOPEKA, Kan., Feb. 18, 2002 - Western Resources (NYSE:WR) today announced
financial results for the fiscal year ended Dec. 31, 2001, and the amount of a
charge to be recorded in the first quarter of 2002 as a result of the adoption
of new accounting standards related to accounting for goodwill and intangible
assets.
Consolidated Results
- --------------------
Western Resources reported a consolidated net loss of $0.31 per share in
2001, compared to net earnings of $1.96 per share in 2000. A discussion of
results by business line follows.
Westar Energy
- -------------
Westar Energy contributed operating earnings of $0.50 per share in 2001,
compared to $1.12 per share in 2000. The decrease in earnings resulted
principally from less favorable weather, the reduction in retail rates ordered
by the Kansas Corporation Commission in July 2001 and a net charge of
approximately $14 million ($0.20 per share) in the fourth quarter related to a
work force reduction.
For the year ended Dec. 31, 2001, earnings before interest and taxes
(EBIT) and earnings before interest, taxes, depreciation and amortization
(EBITDA) totaled $287 million and
-more-
Western Resources Announces Fiscal 2001 Results, page 2
$473 million, respectively, before the fourth quarter charge related to a work
force reduction. Westar Energy is expected to contribute EBIT and EBITDA of
approximately $325 million and approximately $525 million, respectively, in
2002.
Westar Industries
- -----------------
Westar Industries reported a loss of $0.81 per share in 2001, compared to
earnings of $0.84 per share in 2000.
Monitored Services
------------------
Monitored services reported a loss of $1.38 per Western Resources share in
2001, compared to a loss of $0.88 per share in 2000. The increased loss resulted
principally from a 21 percent decrease in revenues from the prior year (both
Protection One and Protection One Europe sold certain operations during the
year), one-time expenses of $9.7 million pre-tax at Protection One in 2001
primarily related to efforts to consolidate and streamline operations, and
reduced gains, $34.5 million in 2001 compared to $49.3 million in 2000, from the
retirement of Protection One debt.
Westar Industries currently owns approximately 86.1 million shares of
Protection One common stock, representing 80.4 percent ownership on a fully
diluted basis. Protection One may from time to time repurchase shares of its
common stock in the open market or privately negotiated transactions. In this
event, Westar Industries will sell shares to Protection One to maintain its
proportionate ownership interest in Protection One.
-more-
Western Resources Announces Fiscal 2001 Results, page 3
ONEOK
-----
The investment in ONEOK contributed $0.51 per share to 2001 earnings,
compared to $0.56 per share in the prior year. ONEOK's earnings were adversely
impacted by their exposure to Enron Corp. and an order from the Oklahoma
Corporation Commission that denied the recovery of certain gas costs.
International Generation/Guardian/Miscellaneous
-----------------------------------------------
Other unregulated holdings contributed $0.06 per share to 2001 earnings,
compared to $1.16 per share in the prior year. The prior year earnings included
gains from the sale of investments.
Adoption of New Accounting Standards
- ------------------------------------
In 2001, the U.S. Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No.142 (SFAS No.142), "Goodwill and Other
Intangible Assets" and SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." Under SFAS No. 142, effective Jan. 1, 2002, goodwill is
no longer amortized as was required under past accounting standards and goodwill
is required to be separately tested for impairment using a fair-value based
approach as opposed to the undiscounted cash flow approach used under past
accounting standards.
In accordance with these new standards, Western Resources will record a net
charge of approximately $654 million in the first quarter of 2002. Approximately
$465 million of the
-more-
Western Resources Announces Fiscal 2001 Results, page 4
charge is related to the impairment of Protection One and Protection One Europe
goodwill, which will be reflected in the statement of income as a cumulative
effect of a change in accounting principle. The balance, $189 million, is
related to the impairment of Protection One customer accounts and will be
reflected in the statement of income as an operating cost. An independent
appraisal firm was engaged to assist in the determination of estimated fair
values. This non-cash charge will not result in any violation of debt covenants
and is not expected to affect liquidity.
In 2001, Protection One and Protection One Europe charged a total of
approximately $57 million of goodwill amortization. After January 1, 2002,
goodwill will no longer be amortized to income. However, the new accounting rule
requires that goodwill be tested for impairment on an annual basis.
Other
- -----
Westar Energy had approximately 1,921 employees at February 1, 2002. A net
charge of approximately $24 million will be recorded in the first quarter of
2002 related to a voluntary separation program completed in January 2002.
-30-
Western Resources (NYSE: WR) is a consumer services company with interests
in monitored services and energy. The company has total assets of more than $7.5
billion, including security company holdings through ownership of Protection One
(NYSE: POI) and Protection One Europe, which have more than 1.2 million security
customers. Western Resources provides electric utility services as Westar Energy
to about 640,000 customers in Kansas. Through its ownership in ONEOK, Inc.
(NYSE: OKE), a Tulsa-based natural gas company, Western Resources has a 44.7
percent interest in one of the largest natural gas distribution companies in the
nation, serving more than 1.4 million customers.
For more information about Western Resources and its operating companies,
visit us on the Internet at http://www.wr.com.
Forward-looking statements: Certain matters discussed here and elsewhere in
this news release are "forward-looking statements." The Private Securities
Litigation Reform Act of 1995 has established that these statements qualify for
safe harbors from liability. Forward-looking statements may include words like
we "believe," "anticipate," "expect" or words of similar
meaning. Forward-looking statements describe our future plans, objectives,
expectations or goals. Such statements address future events and conditions
concerning capital expenditures, earnings, liquidity and capital resources,
litigation, rate and other regulatory matters, possible corporate
restructurings, mergers, acquisitions, dispositions, including the proposed
separation of Westar Industries, Inc., from our electric utility businesses and
the consummation of the acquisition of our electric operations by Public Service
Company of New Mexico, compliance with debt covenants, changes in accounting
requirements and other accounting matters, interest and dividends, Protection
One's financial condition and its impact on our consolidated results,
environmental matters, changing weather, nuclear operations, ability to enter
new markets successfully and capitalize on growth opportunities in non-regulated
businesses, events in foreign markets in which investments have been made and
the overall economy of our service area. What happens in each case could vary
materially from what we expect because of such things as electric utility
deregulation; ongoing municipal, state and federal activities, such as the
Wichita municipalization efforts; future economic conditions; legislative and
regulatory developments; competitive markets; and other circumstances affecting
anticipated operations, sales and costs.
Attachment 1
2001 ANNUAL REPORT
WESTERN RESOURCES, INC.
Twelve Months Ended December 31,
2001 2000
---- ----
1. Sales $2,186,262,000 $2,368,476,000
2. Net Income $ (20,876,000) $ 136,481,000
3. Earnings Available
for Common Stock $ (21,771,000) $ 135,352,000
4. Average Common Shares
Outstanding $ 70,650,000 * 68,962,000
5. Basic Earnings per Share $ (0.31) * $ 1.96
6. EBITDA $ 538,265,000 $ 853,048,000
7. Net Utility Plant
(after depreciation) $3,982,647,000 $3,933,624,000
* Excludes shares held by Westar Industries.
Attachment 2
2001 ANNUAL REPORT
WESTERN RESOURCES, INC.
Earnings (1) Adj. Earnings (2) Cash Flow (3)
Year Ended December 31, 2001 2000 2001 2000 2001 2000
---- ---- ---- ---- ---- ----
Electric Operations:
Electric $ 0.86 $ 1.24 $ 1.15 $ 1.53 $ 3.48 $ 3.79
COLI Excess/Shortfall $ (0.08) $ (0.11) $ (0.08) $ (0.11) $ (0.08) $ (0.11)
----------------------------------------------------------------------
Total Operations $ 0.78 $ 1.13 $ 1.07 $ 1.42 $ 3.40 $ 3.68
Other (0.28) $ (0.01) $ (0.28) $ (0.01) $ (0.29) $ (0.01)
----------------------------------------------------------------------
Total Electric Operations $ 0.50 $ 1.12 $ 0.79 $ 1.41 $ 3.11 $ 3.67
----------------------------------------------------------------------
Westar Industries:
Monitored Services $ (1.38) $ (0.88) $ (0.51) $ (0.13) $ 0.09 $ 0.10
ONEOK $ 0.51 $ 0.56 $ 0.51 $ 0.56 $ 0.48 $ 0.52
Other $ 0.06 $ 1.16 $ 0.35 $ 1.19 $ 0.52 $ 1.17
----------------------------------------------------------------------
Total Westar Industries $ (0.81) $ 0.84 $ 0.35 $ 1.62 $ 1.09 $ 1.79
----------------------------------------------------------------------
Total Western Resources $ (0.31) $ 1.96 $ 1.14 $ 3.03 $ 4.20 $ 5.46
======================================================================
(1) Line of business reporting does not reflect intercompany eliminations.
(2) Earnings + amortization of goodwill and KGE acquisition premium.
(3) Earnings + depreciation and amortization + ONEOK dividends + Unregulated
Generation Services dividends - Extraordinary Gain on Retirement of Debt -
Equity Loss on Subsidiaries
