SEC Filing | Evergy, Inc.

Westar Energy, Inc.

Date: November 3, 2011

/s/ LARRY D. IRICK

Larry D. Irick

Vice President, General Counsel

and Corporate Secretary

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Form 8-K

UNITED STATES

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) November 3, 2011

WESTAR ENERGY, INC.

(Exact name of registrant as specified in its charter)


KANSAS	1-3523	48-0290150
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

818 South Kansas Avenue, Topeka, Kansas		66612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (785) 575-6300

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

WESTAR ENERGY, INC.

Item 2.02.

Results of Operations and Financial Condition

On November 3, 2011, we issued a press release announcing our earnings for the period ended September 30, 2011. A copy of our November 3, 2011 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2011 Third Quarter Earnings package, which is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, will not be incorporated by reference into any registration statement filed by us under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

Item 9.01.

Financial Statements and Exhibits.


Exhibit 99.1		Press Release dated November 3, 2011

Exhibit 99.2		2011 Third Quarter Earnings package

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 hereunto duly authorized.

EXHIBIT INDEX


Exhibit Number		Description of Exhibit

Exhibit 99.1		Press Release dated November 3, 2011

Exhibit 99.2		2011 Third Quarter Earnings package

Press Release

Exhibit 99.1


		Media contact:
		Gina Penzig, director, corporate communications
		Phone: 785.575.8089 gina.penzig@WestarEnergy.com
		Investor contact:
		Bruce Burns, director, investor relations
		Phone: 785.575.8227 bruce.burns@WestarEnergy.com

WESTAR ENERGY ANNOUNCES THIRD QUARTER RESULTS

TOPEKA, Kan., Nov. 3, 2011 — Westar Energy, Inc. (NYSE:WR) today announced earnings of $135 million, or $1.15 per share, for the third quarter 2011 compared with earnings of $115 million, or $1.02 per share, for the third quarter 2010. Earnings for the nine months ended Sep. 30, 2011 were $210 million, or $1.82 per share, compared with $198 million, or $1.77 per share, for the same period in 2010. Earnings for 2011 include the benefits of reversing previously recorded accruals as a result of legal settlements and a gain on the sale of a non-utility investment.

Following is a reconciliation of GAAP to ongoing (non-GAAP) earnings per share:


	Three Months Ended September 30,							Nine Months Ended September 30,
	2011		2010		Change			2011		2010		Change
Basic earnings per share	$	1.15	$	1.02	$	0.13		$	1.82	$	1.77	$	0.05
Less adjustments for:
Reversal of accruals related to legal settlements (a)		0.11		—		0.11			0.08		—		0.08
Gain on sale of non-utility investment		0.06		—		0.06			0.06		—		0.06

Ongoing (non-GAAP) earnings per share	$	0.98	$	1.02	$	(0.04	)	$	1.68	$	1.77	$	(0.09	)

(a)	Per share amounts adjusted for income tax and legal expenses related to legal settlements

Per share results for both periods in 2011 reflect additional shares outstanding as a result of the company having issued shares to fund capital investments.

The primary drivers for increased net income for the third quarter and nine months ended Sept. 30, 2011 were the benefits of reversing previously recorded accruals and the gain on the

Page 1 of 4


Westar Energy announces third quarter 2011 results		Page 2 of 4

sale of a non-utility investment. Ongoing earnings, which exclude the one-time benefits previously mentioned, for third quarter 2011 were essentially unchanged from third quarter 2010. An increase in revenues for the quarter, due primarily to higher prices, was offset by increases in operating expenses and losses on investments in a trust to fund retirement benefits. Ongoing earnings for the nine months ended Sept. 30, 2011 decreased by $4 million compared with the same period in 2010. The decrease reflects various increases in operating expenses that more than offset higher retail revenues due primarily to higher prices. The increase in operating expenses include higher transmission network costs, higher expenses for regulatory compliance at the Wolf Creek generating station, increased maintenance for tree trimming on the electrical distribution system and increased depreciation expense.

Reconciliation of GAAP to ongoing (non-GAAP) net income:


	Three Months Ended September 30,							Nine Months Ended September 30,
	2011		2010		Change			2011		2010		Change
	(Dollars in Millions)							(Dollars in Millions)
Net Income attributable to common stock	$	134.7	$	114.5	$	20.2		$	209.9	$	198.0	$	11.9
Less adjustments for:
Reversal of accruals related to legal settlements (a)		13.3		—		13.3			8.9		—		8.9
Gain on sale of non-utility investment		7.2		—		7.2			7.2		—		7.2

Ongoing (non-GAAP) net income	$	114.2	$	114.5	$	(0.3	)	$	193.8	$	198.0	$	(4.2	)

(a)	Adjusted for income taxes and legal expenses related to legal settlement

Earnings Guidance

The company affirmed ongoing earnings guidance for 2011 of $1.75 to $1.90 per share. The company has posted to its website a summary of factors it considers to be principal drivers and adjustments used in arriving at earnings guidance. The summary is located under Supplemental Materials within the Investors section of the company website at www.WestarEnergy.com.


Westar Energy announces third quarter 2011 results		Page 3 of 4

Conference Call and Additional Company Information

Westar Energy management will host a conference call Friday, Nov. 4 with the investment community at 10:00 a.m. ET (9:00 a.m. CT). Investors, media and the public may listen to the conference call by dialing 866-356-3093, participant code 64274311. A webcast of the live conference call will be available at www.WestarEnergy.com.

Members of the media are invited to listen to the conference call and then contact Gina Penzig with any follow-up questions.

This earnings announcement, a package of detailed third quarter 2011 financial information, the company’s quarterly report on Form 10-Q for the period ended Sept. 30, 2011 and other filings the company has made with the Securities and Exchange Commission are available on the company’s website at www.WestarEnergy.com.

Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas, providing electric service to about 687,000 customers in the state. Westar Energy has about 7,100 megawatts of electric generating resources and operates and coordinates more than 34,000 miles of electric distribution and transmission lines.

For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com.

Forward-looking statements: Certain matters discussed 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 “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2) those discussed in the company’s Quarterly Report on Form 10-Q filed Nov. 3, 2011 (a) in ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part 1, Financial Information, ITEM 1. Financial Statements: Notes 8 and 9; and (3) other factors discussed in the company’s filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.


Westar Energy announces third quarter 2011 results		Page 4 of 4

Attachment 1

WESTAR ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	Three Months Ended September 30,								Nine Months Ended September 30,
	2011		2010			Change			2011		2010			Change
Retail	$	529,582	$	502,325		$	27,257		$	1,286,978	$	1,206,261		$	80,717
Wholesale		101,086		94,117			6,969			257,195		255,865			1,330
Transmission		39,075		35,554			3,521			115,411		108,497			6,914
Other		8,409		12,441			(4,032	)		25,179		28,825			(3,646	)

Total Revenues		678,152	$	644,437			33,715			1,684,763		1,599,448			85,315
Fuel and purchased power		199,540		187,877			11,663			486,697		458,793			27,904
Operating and maintenance		137,823		126,602			11,221			412,429		369,584			42,845
Depreciation and amortization		72,202		67,918			4,284			213,551		201,955			11,596
Selling, general and administrative		27,499		50,418			(22,919	)		132,233		144,499			(12,266	)

Total Operating Expenses		437,064		432,815			4,249			1,244,910		1,174,831			70,079

Income from Operations		241,088		211,622			29,466			439,853		424,617			15,236
Other income (expense)		848		(1	)		849			514		(3,901	)		4,415
Interest expense		43,844		43,956			(112	)		130,681		131,862			(1,181	)
Income tax expense		61,700		51,802			9,898			94,812		86,780			8,032

Net Income		136,392		115,863			20,529			214,874		202,074			12,800
Less: Net income attributable to noncontrolling interests		1,442		1,119			323			4,212		3,338			874

Net income attributable to Westar Energy		134,950		114,744			20,206			210,662		198,736			11,926
Preferred dividends		242		242			—			727		727			—

Net Income Attributable to Common Stock	$	134,708	$	114,502		$	20,206		$	209,935	$	198,009		$	11,926

Earnings per common share, basic	$	1.15	$	1.02		$	0.13		$	1.82	$	1.77		$	0.05

Average equivalent common shares outstanding		116,807		111,707			5,100			115,209		111,387			3,822
Dividend declared per share	$	0.32	$	0.31		$	0.01		$	0.96	$	0.93		$	0.03

2011 Third Quarter Earnings package

Exhibit 99.2

Westar Energy, Inc

Third Quarter 2011 Earnings

Released November 3, 2011

Contents


	Page
Consolidated statements of income		2
Consolidated balance sheets		4
Consolidated statements of cash flows		5
Earnings variances		6
Supplemental data		7
Capitalization & Long-term Debt Table		10
GAAP to Non-GAAP reconciliation		11
Supplemental slides		12

Bruce Burns

Director Investor Relations

785-575-8227

bruce.burns@WestarEnergy.com

NOTE:

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q for the period ended September 30, 2011 should be read in conjunction with this financial information. The enclosed statements have been prepared for the purpose of providing information concerning the Company and not in connection with any sale, offer for sale, or solicitation to buy any securities.

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)


	Three Months Ended September 30,
	2011			2010			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	246,756		$	235,383		$	11,373			4.8
Commercial		188,070			179,884			8,186			4.6
Industrial		98,060			90,462			7,598			8.4
Other retail		(3,304	)		(3,404	)		100			2.9

Total Retail Revenues		529,582			502,325			27,257			5.4
Wholesale		101,086			94,117			6,969			7.4
Transmission		39,075			35,554			3,521			9.9
Other		8,409			12,441			(4,032	)		(32.4	)

Total Revenues		678,152			644,437			33,715			5.2

OPERATING EXPENSES:
Fuel and purchased power		199,540			187,877			11,663			6.2
Operating and maintenance		137,823			126,602			11,221			8.9
Depreciation and amortization		72,202			67,918			4,284			6.3
Selling, general and administrative		27,499			50,418			(22,919	)		(45.5	)

Total Operating Expenses		437,064			432,815			4,249			1.0

INCOME FROM OPERATIONS		241,088			211,622			29,466			13.9

OTHER INCOME (EXPENSE):
Investment income		2,914			3,248			(334	)		(10.3	)
Other income		3,404			1,897			1,507			79.4
Other expense		(5,470	)		(5,146	)		(324	)		(6.3	)

Total Other Income (Expense)		848			(1	)		849			nm

Interest expense		43,844			43,956			(112	)		(0.3	)

INCOME BEFORE INCOME TAXES		198,092			167,665			30,427			18.1
Income tax expense		61,700			51,802			9,898			19.1

NET INCOME		136,392			115,863			20,529			17.7
Less: Net income attributable to noncontrolling interests		1,442			1,119			323			28.9

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY		134,950			114,744			20,206			17.6
Preferred dividends		242			242			—			—

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	134,708		$	114,502		$	20,206			17.6

Earnings per common share, basic	$	1.15		$	1.02		$	0.13			12.7

Average equivalent common shares outstanding (in thousands)		116,807			111,707			5,100			4.6
DIVIDENDS DECLARED PER COMMON SHARE	$	0.32		$	0.31		$	0.01			3.2
Effective income tax rate		31.15	%		30.90	%

nm - not meaningful

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)


	Nine Months Ended September 30,
	2011			2010			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	556,784		$	530,220		$	26,564			5.0
Commercial		470,452			443,892			26,560			6.0
Industrial		268,501			242,612			25,889			10.7
Other retail		(8,759	)		(10,463	)		1,704			16.3

Total Retail Revenues		1,286,978			1,206,261			80,717			6.7
Wholesale		257,195			255,865			1,330			0.5
Transmission		115,411			108,497			6,914			6.4
Other		25,179			28,825			(3,646	)		(12.6	)

Total Revenues		1,684,763			1,599,448			85,315			5.3

OPERATING EXPENSES:
Fuel and purchased power		486,697			458,793			27,904			6.1
Operating and maintenance		412,429			369,584			42,845			11.6
Depreciation and amortization		213,551			201,955			11,596			5.7
Selling, general and administrative		132,233			144,499			(12,266	)		(8.5	)

Total Operating Expenses		1,244,910			1,174,831			70,079			6.0

INCOME FROM OPERATIONS		439,853			424,617			15,236			3.6

OTHER INCOME (EXPENSE):
Investment income		6,255			4,350			1,905			43.8
Other income		8,210			3,792			4,418			116.5
Other expense		(13,951	)		(12,043	)		(1,908	)		(15.8	)

Total Other Income (Expense)		514			(3,901	)		4,415			113.2

Interest expense		130,681			131,862			(1,181	)		(0.9	)

INCOME BEFORE INCOME TAXES		309,686			288,854			20,832			7.2
Income tax expense		94,812			86,780			8,032			9.3

NET INCOME		214,874			202,074			12,800			6.3
Less: Net income attributable to nonontrolling interests		4,212			3,338			874			26.2

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY		210,662			198,736			11,926			6.0
Preferred dividends		727			727			—			—

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	209,935		$	198,009		$	11,926			6.0

Earnings per common share, basic	$	1.82		$	1.77		$	0.05			2.8

Average equivalent common shares outstanding (in thousands)		115,209			111,387			3,822			3.4
DIVIDENDS DECLARED PER COMMON SHARE	$	0.96		$	0.93		$	0.03			3.2
Effective income tax rate		30.62	%		30.04	%

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Westar Energy, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, except par values)

(Unaudited)


	September 30, 2011		December 31, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,593	$	928
Accounts receivable, net		252,045		227,700
Inventories and supplies		209,279		206,867
Energy marketing contracts		6,120		13,005
Taxes receivable		—		16,679
Deferred tax assets		—		30,248
Prepaid expenses		11,889		12,413
Regulatory assets		107,740		73,480
Other		13,246		20,289

Total Current Assets		604,912		601,609

PROPERTY, PLANT AND EQUIPMENT, NET		6,281,623		5,964,439

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		336,373		345,037

OTHER ASSETS:
Regulatory assets		800,749		787,585
Nuclear decommissioning trust		121,050		126,990
Energy marketing contracts		7,464		9,472
Other		237,732		244,506

Total Other Assets		1,166,995		1,168,553

TOTAL ASSETS	$	8,389,903	$	8,079,638

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	—	$	61
Current maturities of long-term debt of variable interest entities		28,091		30,155
Short-term debt		391,900		226,700
Accounts payable		152,465		187,954
Accrued taxes		66,849		45,534
Energy marketing contracts		3,031		9,670
Accrued interest		68,188		77,771
Regulatory liabilities		33,428		28,284
Other		143,891		176,717

Total Current Liabilities		887,843		782,846

LONG-TERM LIABILITIES:
Long-term debt, net		2,490,972		2,490,871
Long-term debt of variable interest entities, net		250,632		278,162
Deferred income taxes		1,111,301		1,102,625
Unamortized investment tax credits		155,213		101,345
Regulatory liabilities		130,927		135,754
Deferred regulatory gain from sale-leaseback		93,420		97,541
Accrued employee benefits		433,664		483,769
Asset retirement obligations		131,198		125,999
Energy marketing contracts		—		10
Other		87,065		66,878

Total Long-Term Liabilities		4,884,392		4,882,954

COMMITMENTS AND CONTINGENCIES (See Notes 8 & 9 in Form 10-Q)
TEMPORARY EQUITY		—		3,465

EQUITY:
Westar Energy Shareholders’ Equity:
Cumulative preferred stock, par value $100 per share; authorized 600,000 shares; issued and outstanding 214,363 shares		21,436		21,436
Common stock, par value $5 per share; authorized 275,000,000 and 150,000,000 shares, respectively; issued and outstanding 117,083,763 and 112,128,068 shares, respectively		585,419		560,640
Paid-in capital		1,480,081		1,398,580
Retained earnings		522,366		423,647

Total Westar Energy Shareholders’ Equity		2,609,302		2,404,303

Noncontrolling Interests		8,366		6,070

Total Equity		2,617,668		2,410,373

TOTAL LIABILITIES AND EQUITY	$	8,389,903	$	8,079,638

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Westar Energy, Inc.

Consolidated Statements of Cash Flows

(Dollars in Thousands)

(Unaudited)


	Nine Months Ended September 30,
	2011			2010
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	214,874		$	202,074
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		213,551			201,955
Amortization of nuclear fuel		13,411			19,657
Amortization of deferred regulatory gain from sale-leaseback		(4,121	)		(4,121	)
Amortization of corporate-owned life insurance		19,137			15,286
Non-cash compensation		6,834			8,280
Net changes in energy marketing assets and liabilities		956			(947	)
Accrued liability to certain former officers		1,180			1,959
Net deferred income taxes and credits		100,130			104,133
Stock based compensation excess tax benefits		(1,186	)		(526	)
Allowance for equity funds used during construction		(4,448	)		(1,926	)
Gain on sale of non-utility investment		(7,246	)		—
Gain on settlement of contractual obligations with former officers		(22,039	)		—
Changes in working capital items:
Accounts receivable		(27,269	)		(44,207	)
Inventories and supplies		(1,837	)		(7,298	)
Prepaid expenses and other		(36,459	)		23,843
Accounts payable		(14,077	)		12,965
Accrued taxes		38,291			70,263
Other current liabilities		(105,657	)		(84,095	)
Changes in other assets		(15,291	)		25,984
Changes in other liabilities		(30,957	)		(42,912	)

Cash flows from operating activities		337,777			500,367

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment		(512,675	)		(369,746	)
Purchase of securities within trusts		(41,118	)		(189,784	)
Sale of securities within trusts		39,789			189,343
Investment in corporate-owned life insurance		(19,214	)		(18,884	)
Proceeds from investment in corporate-owned life insurance		869			1,918
Proceeds from federal grant		7,367			—
Investment in affiliated company		(1,479	)		—
Proceeds from sale of non-utility investment		7,246			—
Other investing activities		470			(1,760	)

Cash flows used in investing activities		(518,745	)		(388,913	)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net		159,770			(79,720	)
Retirements of long-term debt		(371	)		(1,353	)
Retirements of long-term debt of variable interest entities		(29,019	)		(27,536	)
Repayment of capital leases		(1,645	)		(1,640	)
Borrowings against cash surrender value of corporate-owned life insurance		65,853			72,286
Repayment of borrowings against cash surrender value of corporate-owned life insurance		(3,108	)		(3,219	)
Stock based compensation excess tax benefits		1,186			526
Issuance of common stock		96,508			28,299
Distributions to shareholders of noncontrolling interests		(1,916	)		(2,094	)
Cash dividends paid		(102,625	)		(96,391	)

Cash flows from (used in) financing activities		184,633			(110,842	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		3,665			612
CASH AND CASH EQUIVALENTS:
Beginning of period		928			3,860

End of period	$	4,593		$	4,472

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Westar Energy, Inc.

3rd Quarter 2011 vs. 2010

Earnings Variances


	($ per share)			Change (Dollars in thousands)
2010 earnings attributable to common stock	$	1.02		$	114,502

				*Favorable/(Unfavorable)*
Retail					27,257		A
Wholesale					6,969		B
Transmission					3,521
Other revenues					(4,032	)
Fuel and purchased power					(11,663	)	C
SPP network transmission costs					(3,205	)

Gross Margin					18,847		D
Operating and maintenance w/o SPP NITS					(8,016	)	E	VIE
Depreciation and amortization					(4,284	)	F	VIE
Selling, general and administrative					22,919		G
Other income (expense)					849		H
Interest expense					112			VIE
Income tax expense					(9,898	)		VIE
Net income attributable to noncontrolling interests					(323	)		VIE
Change in shares outstanding		(0.05	)

2011 earnings attributable to common stock	$	1.15		$	134,708

Major factors influencing the period to period change in EPS — Favorable/(Unfavorable)

A	Due principally to price increases; MWh sales increased 1 percent (see page 7 for changes by customer class)

B	Due to increased average wholesale prices; MWh sales decreased 8 percent reflecting less availability of generation for wholesale sales; average wholesale market prices increased 17 percent (see page 7 for changes by customer class)

C	Due principally to higher average cost of fuel used for generation

D	Due primarily to increased retail revenues largely from price increases

Increase due primarily to: increased amortization of Wolf Creek refuel and maintenance outage cost - ($2.9M); increased maintenance at steam generating plants ($3.3M); increased maintenance for tree trimming on distribution system - ($2.2M); increased ad valorem tax expense (largely offset by increase in revenues for property tax surcharge) - ($1.8M); and decrease in expenses for completed storm amortizations - $2.4M

F	Higher plant balances associated primarily with transmission facilities and additions at power plants, including air quality control equipment

G	Decrease due primarily to reversing accruals as a result of legal settlements - $22M

H	Increase due primarily to: recording a gain on sale of a non-utility investment - $7.2M; recording $4.7M of losses on investments in a trust to fund retirement benefits compared to $3.2M gains last year - ($7.9); gain on sale of No 6 fuel oil - $2M

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Westar Energy, Inc.

YTD September 2011 vs. 2010

Earnings Variances


	($ per share)			Change (Dollars in thousands)
2010 earnings attributable to common stock	$	1.77		$	198,009

				*Favorable / (Unfavorable)*
Retail					80,717		A
Wholesale					1,330		B
Transmission					6,914
Other revenues					(3,646	)
Fuel and purchased power					(27,904	)	C
SPP network transmission costs					(11,877	)

Gross Margin					45,534		D
Operating and maintenance w/o SPP NITS					(30,968	)	E	VIE
Depreciation and amortization					(11,596	)	F	VIE
Selling, general and administrative					12,266		G
Other income (expense)					4,415		H
Interest expense					1,181			VIE
Income tax expense					(8,032	)		VIE
Net income attributable to noncontrolling interests					(874	)		VIE
Change in shares outstanding		(0.06	)

2011 earnings attributable to common stock	$	1.82		$	209,935

Major factors influencing the period to period change in EPS — Favorable/(Unfavorable)

A	Due principally to price increases; MWh sales increased 1 percent (see page 8 for changes by customer class)

B	Due to increased average wholesale prices; MWh sales decreased 15 percent reflecting less availability of generation for wholesale sales; average wholesale market prices increased 18 percent (see page 8 for changes by customer class)

C	Due principally to higher average cost of fuel used for generation and increased purchased power, which reflects replacement cost of fuel and purchased power during the Wolf Creek refuel and maintenance outage

D	Due primarily to increased retail revenues largely from price increases

Increase due primarily to: higher regulatory compliance costs at Wolf Creek- ($5.4M); increased amortization of Wolf Creek refuel and maintenance outage cost - ($5M); increased maintenance for tree trimming on distribution system - ($6.6M); increased maintenance at steam generating plants ($3M); increased ad valorem tax expense (largely offset by increase in revenues for property tax surcharge) - ($4.2M); recording in 2010 a reduction in maximum liability for costs associated with the sale of assets many years ago - ($5M); and decrease in expenses for completed storm amortizations - $5.6M

F	Higher plant balances associated primarily with transmission facilities and additions at power plants, including air quality control equipment

G	Decrease due primarily to reversing accruals as a result of legal settlements - $22M; higher legal fees - ($5.5M); amortization of energy efficiency program costs (largely offset in revenues through energy efficiency tariff) - ($3M)

H	Increase due primarily to: recording a gain on sale of a non-utility investment - $7.2M; recording $2.1M of losses on investments in a trust to fund retirement benefits compared to $2.2M of gains last year - ($4.3); gain on sale of No 6 fuel oil - $2.5M

The Notes to the Condensed Consolidated Financial Statements in the company’s Quarterly Report on Form 10-Q

for the period ended September 30, 2011 should be read in conjunction with this financial information.

Supplemental Data

Westar Energy, Inc

Revenue, Sales and Energy Supply


	Three Months Ended September 30,
	2011			2010			Change			% Change
	(Dollars In Thousands)
Revenues
Residential	$	246,756		$	235,383		$	11,373			4.8
Commercial		188,070			179,884			8,186			4.6
Industrial		98,060			90,462			7,598			8.4
Other retail		3,094			3,046			48			1.6
Provision for rate refunds		(6,398	)		(6,450	)		52			0.8

Total Retail Revenues		529,582			502,325			27,257			5.4
Tariff-based wholesale		80,295			70,743			9,552			13.5
Market-based wholesale		20,791			23,374			(2,583	)		(11.1	)
Transmission		39,075			35,554			3,521			9.9
Other		8,409			12,441			(4,032	)		(32.4	)

Total Revenues	$	678,152		$	644,437		$	33,715			5.2


	(Thousands of MWh)
Electricity Sales
Residential		2,372			2,351			21			0.9
Commercial		2,232			2,218			14			0.6
Industrial		1,528			1,483			45			3.0
Other retail		21			23			(2	)		(8.7	)

Total Retail		6,153			6,075			78			1.3

Tariff-based wholesale		1,733			1,686			47			2.8
Market-based wholesale		389			618			(229	)		(37.1	)

Total wholesale		2,122			2,304			(182	)		(7.9	)

Total Electricity Sales		8,275			8,379			(104	)		(1.2	)


	(Dollars per MWh)
Total retail	$	86.07		$	82.69		$	3.38			4.1
Tariff-based wholesale	$	46.33		$	41.96		$	4.37			10.4
Market-based wholesale	$	53.45		$	37.82		$	15.63			41.3

	(Dollars In Thousands)
Fuel and Purchased Power
Fuel used for generation	$	183,056		$	161,912		$	21,144			13.1
Purchased power		24,836			24,884			(48	)		(0.2	)

Subtotal		207,892			186,796			21,096			11.3
Emissions allowances, VIE and miscellaneous		296			298			(2	)		(0.7	)
Fuel expense recovery (RECA)		(8,648	)		783			(9,431	)		(1,204.5	)

Total fuel and purchased power expense	$	199,540		$	187,877		$	11,663			6.2


	(Thousands of MWh)
Electricity Supply
Generated - Gas/oil		1,281			1,020			261			25.6
Coal		5,603			5,838			(235	)		(4.0	)
Nuclear		1,179			1,211			(32	)		(2.6	)
Wind		80			103			(23	)		(22.3	)

Subtotal electricity generated		8,143			8,172			(29	)		(0.4	)
Purchased		683			712			(29	)		(4.1	)

Total Electricity Supply		8,826			8,884			(58	)		(0.7	)


	(Dollars per MWh)
Average cost of fuel used for generation	$	22.48		$	19.81		$	2.67			13.5
Average cost of purchased power	$	36.36		$	34.95		$	1.41			4.0
Average cost of fuel and purchased power	$	23.55		$	21.03		$	2.52			12.0

Degree Days


			2010 /
	2011		20 yr Avg		Change		% Change
Cooling
Actual compared to last year		1,431		1,335		96		7.2
Actual compared to 20 year average		1,431		1,124		307		27.3
Heating
Actual compared to last year		53		16		37		231.3
Actual compared to 20 year average		53		44		9		20.5

Supplemental Data

Westar Energy, Inc

Revenue, Sales and Energy Supply


	Nine Months Ended September 30,
	2011			2010			Change			% Change
	(Dollars In Thousands)
Revenues
Residential	$	556,784		$	530,220		$	26,564			5.0
Commercial		470,452			443,892			26,560			6.0
Industrial		268,501			242,612			25,889			10.7
Other retail		9,205			8,975			230			2.6
Provision for rate refunds		(17,964	)		(19,438	)		1,474			7.6

Total Retail Revenues		1,286,978			1,206,261			80,717			6.7
Tariff-based wholesale		205,142			183,935			21,207			11.5
Market-based wholesale		52,053			71,930			(19,877	)		(27.6	)
Transmission		115,411			108,497			6,914			6.4
Other		25,179			28,825			(3,646	)		(12.6	)

Total Revenues	$	1,684,763		$	1,599,448		$	85,315			5.3


	(Thousands of MWh)
Electricity Sales
Residential		5,579			5,563			16			0.3
Commercial		5,825			5,793			32			0.6
Industrial		4,304			4,166			138			3.3
Other retail		66			65			1			1.5

Total Retail		15,774			15,587			187			1.2

Tariff-based wholesale		4,491			4,728			(237	)		(5.0	)
Market-based wholesale		1,317			2,076			(759	)		(36.6	)

Total wholesale		5,808			6,804			(996	)		(14.6	)

Total Electricity Sales		21,582			22,391			(809	)		(3.6	)


	(Dollars per MWh)
Total retail	$	81.59		$	77.39		$	4.20			5.4
Tariff-based wholesale	$	45.68		$	38.90		$	6.78			17.4
Market-based wholesale	$	39.52		$	34.65		$	4.87			14.1

	(Dollars In Thousands)
Fuel and Purchased Power
Fuel used for generation	$	437,357		$	410,096		$	27,261			6.6
Purchased power		73,285			59,797			13,488			22.6

Subtotal		510,642			469,893			40,749			8.7
Emissions allowances, VIE and miscellaneous		679			416			263			63.2
Fuel expense recovery (RECA)		(24,624	)		(11,516	)		(13,108	)		(113.8	)

Total fuel and purchased power expense	$	486,697		$	458,793		$	27,904			6.1


	(Thousands of MWh)
Electricity Supply
Generated - Gas/oil		2,223			1,682			541			32.2
Coal		15,986			16,640			(654	)		(3.9	)
Nuclear		2,192			3,525			(1,333	)		(37.8	)
Wind		326			336			(10	)		(3.0	)

Subtotal electricity generated		20,727			22,183			(1,456	)		(6.6	)
Purchased		2,116			1,578			538			34.1

Total Electricity Supply		22,843			23,761			(918	)		(3.9	)


	(Dollars per MWh)
Average cost of fuel used for generation	$	21.10		$	18.49		$	2.61			14.1
Average cost of purchased power	$	34.63		$	37.89		$	(3.26	)		(8.6	)
Average cost of fuel and purchased power	$	22.35		$	19.78		$	2.57			13.0

Degree Days


			2010 /
	2011		20 yr Avg		Change		% Change
Cooling
Actual compared to last year		2,067		1,946		121		6.2
Actual compared to 20 year average		2,067		1,585		482		30.4
Heating
Actual compared to last year		3,109		2,999		110		3.7
Actual compared to 20 year average		3,109		2,858		251		8.8

Westar Energy, Inc.

Capitalization


	September 30, 2011				December 31, 2010
	(Dollars in Thousands)
Current maturities of long-term debt	$	—			$	61
Current maturities of long-term debt of VIEs		28,091				30,155
Long-term debt, net		2,490,972				2,490,871
Long-term debt of variable interest entities, net		250,632				278,162

Total debt		2,769,695	51.4	%		2,799,249	53.7	%
Preferred		21,436	0.4	%		21,436	0.4	%
Common equity		2,587,866	48.0	%		2,382,867	45.8	%
Noncontrolling interests		8,366	0.2	%		6,070	0.1	%

Total capitalization	$	5,387,363	100.0	%	$	5,209,622	100.0	%
GAAP Book value per share	$	22.10			$	21.25
Period end shares outstanding (in thousands)		117,084				112,128

Outstanding long-term debt table


	CUSIP		September 30, 2011			December 31, 2010
			(Dollars in Thousands)
Westar Energy:
First Mortgage Bond series:
6.00% Series due July 2014		95709TAA8	$	250,000		$	250,000
5.15% Series due January 2017		95709TAB6		125,000			125,000
5.95% Series due January 2035		95709TAC4		125,000			125,000
5.10% Series due July 2020		95709TAD2		250,000			250,000
5.875% Series due July 2036		95709TAE0		150,000			150,000
6.10% Series due May 2047		95709T704		150,000			150,000
8.625% Series due December 2018		95709TAG5		300,000			300,000

				1,350,000			1,350,000
Pollution control bond series:
Variable series due April 2032 (Wamego)		933623BN9		30,500			30,500
Variable series due April 2032 (St Marys)		792609AF6		45,000			45,000
5.0% Series due February 2033 (Wamego)		933623BQ2		57,245			57,530

				132,745			133,030
Other long-term debt:
4.36% Equipment financing loan due 2011				—			61

				—			61

Total Westar Energy				1,482,745			1,483,091
KGE
First mortgage bond series:
6.53% Series due December 2037		485260BJ1		175,000			175,000
6.15% Series due May 2023		485260B@1		50,000			50,000
6.64%Series due May 2038		485260B#9		100,000			100,000
6.70%Series due June 2019		U24448AB5		300,000			300,000

				625,000			625,000
Pollution control bond series:
5.3% Series due June 2031		121825BW2		108,600			108,600
5.3% Series due June 2031		933623BR0		18,900			18,900
4.85% Series due June 2031		121825CB7		50,000			50,000
5.10% Series due March 2023		502828AH9		13,318			13,343
Variable rate series due April 2027 (LaCygne)		502828AJ5		21,940			21,940
Variable rate series due April 2032 (St Marys)		792609AE9		14,500			14,500
Variable rate series due April 2032 (Wamego)		933623BM1		10,000			10,000
5.6% Series due June 2031		121825CD3		50,000			50,000
6.0% Series due June 2031		121825CE1		50,000			50,000
5.0% Series due June 2031		121825CF8		50,000			50,000

				387,258			387,283

Total KGE				1,012,258			1,012,283
Total long-term debt				2,495,003			2,495,374

Unamortized debt discount				(4,031	)		(4,442	)
Long-term debt due within one year				—			(61	)

Total long-term debt, net			$	2,490,972		$	2,490,871

Westar Energy, Inc.

GAAP to Non-GAAP Reconciliation

Fuel and purchased power costs fluctuate with electricity sales and unit costs. As permitted by regulators, prices are adjusted to reflect changes in fuel and purchased power costs, and accordingly changes to these costs have a minimal impact on net income. For this reason, Westar management believes that gross margin is a useful measure for understanding changes in operating performance from one period to the next. Gross margin is calculated as total revenues less the sum of fuel and purchased power costs and SPP network transmission costs. SPP network transmission costs are included as a component of gross margin because these costs reflect the costs of providing network transmission service, and a significant component of transmission revenue is recognized when providing this service.

Operating and maintenance expense includes SPP network transmission costs (SPP NITS). The SPP network transmission costs are included in gross margin for the reasons shown above, and are therefore excluded from operating and maintenance expense w/o SPP NITS used to reconcile earnings from the comparable prior year period to the earnings for the current period. Westar management believes this measurement is useful for understanding changes in operating performance from one period to the next. Operating and maintenance expense w/o SPP NITS is calculated by subtracting the SPP network transmission costs from operating and maintenance expense.

The calculations of gross margin and operating and maintenance expense w/o SPP NITS for the three and nine months ended September 30, 2011 and 2010 are shown in the table below. The table also includes a reconciliation of gross margin to income from operations for both periods. Income from operations is the GAAP financial measure most directly comparable to gross margin. Operating and maintenance expense is the GAAP financial measure most directly comparable to operating and maintenance expense w/o SPP NITS.


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
	(Dollars In Thousands)									(Dollars In Thousands)
Revenues
Residential	$	246,756		$	235,383		$	11,373		$	556,784		$	530,220		$	26,564
Commercial		188,070			179,884			8,186			470,452			443,892			26,560
Industrial		98,060			90,462			7,598			268,501			242,612			25,889
Other retail		(3,304	)		(3,404	)		100			(8,759	)		(10,463	)		1,704

Total Retail Revenues		529,582			502,325			27,257			1,286,978			1,206,261			80,717
Wholesale		101,086			94,117			6,969			257,195			255,865			1,330
Transmission		39,075			35,554			3,521			115,411			108,497			6,914
Other		8,409			12,441			(4,032	)		25,179			28,825			(3,646	)

Total Revenues		678,152			644,437			33,715			1,684,763			1,599,448			85,315
Less: Fuel and purchased power expense		199,540			187,877			11,663			486,697			458,793			27,904
SPP network transmission costs		33,887			30,682			3,205			98,623			86,746			11,877

Gross Margin	$	444,725		$	425,878		$	18,847		$	1,099,443		$	1,053,909		$	45,534

Gross margin	$	444,725		$	425,878		$	18,847		$	1,099,443		$	1,053,909		$	45,534
Add: SPP network transmission costs		33,887			30,682			3,205			98,623			86,746			11,877
Less: Operating and maintenance expense		137,823			126,602			11,221			412,429			369,584			42,845
Depreciation and amortization expense		72,202			67,918			4,284			213,551			201,955			11,596
Selling, general and administrative expense		27,499			50,418			(22,919	)		132,233			144,499			(12,266	)

Income from operations	$	241,088		$	211,622		$	29,466		$	439,853		$	424,617		$	15,236

Operating and maintenance expense	$	137,823		$	126,602		$	11,221		$	412,429		$	369,584		$	42,845
Less: SPP Network transmission costs		33,887			30,682			3,205			98,623			86,746			11,877

Operating and maintenance expense w/o SPP NITS	$	103,936		$	95,920		$	8,016		$	313,806		$	282,838		$	30,968

Normalized

Sales

Employee

costs

Vegetation

management

Wolf Creek

expenses

Misc expenses

and

adjustments

Depreciation

2011 General Rate Request

($28)

$23

$27

$20

$37

Dollars in millions

$91 million total rate request

Key Rate Case Drivers

Rate Case Schedule

Staff and intervener

testimony

Company rebuttal

Evidentiary hearings

Briefs / reply briefs

Order due

January 5

January 23

February

13-17

March

April 23

$12

Settlement conference

January 30

•

Filed $91 million rate request , 5.8% increase

•

Proposed rate base of $3.4 billion, excluding

–

Transmission rate base

$700 million

–

Environmental rate base

$400 million under ECRR

•

Requested 10.6% ROE and 8.68% overall return

–

Current implied authorized return is 10.4% ROE and 8.50% return

–

Filing reflects under earning by

300 basis points

•

Pro forma capital structure

–

51.6% equity, includes planned settlement of forward equity sales

•

Request permission to file an abbreviated rate case for La Cygne

2011 General Rate Request (continued)

Air Quality Projects Underway

•

Westar’s environmental compliance plan, approved by state and

federal authorities, is based on a glide path that significantly

reduces emissions by 2015

•

Lawrence Energy Center

–

Fabric filters, rebuild scrubbers, precipitator, low NOx system

•

On plan, favorable to budget

•

Jeffrey Energy Center

–

SCR on 1 unit

•

On plan, on budget

•

La Cygne Energy Center

–

Scrubbers, fabric filters, common chimney, SCR and low NOx system

•

On plan, on budget

Dramatic Improvement in Air Quality

Actual

Projected

Actual

Projected

Nitrogen Oxide

48%

(tons per year)

Sulfur Dioxide

82%

(tons per year)

Westar Coal Fleet Emission Control Equipment

Unit

Scrubber

Precipitator

Fabric Filter

Low NOx

SCR

Jeffrey 1

Yes

No plans

Yes

Planned

Jeffrey 2

Yes

No plans

Yes

Uncertain

Jeffrey 3

Yes

No plans

Yes

No plans

La Cygne 1

Yes

(b)

Planned

Yes

La Cygne 2

Planned

Yes

Planned

Lawrence 3

No plans

Yes (c)

No plans

Planned

No plans

Lawrence 4

Yes (a)

(b)

Planned

No plans

Lawrence 5

Yes (a)

(b)

Planned

Yes

No plans

Tecumseh 7

No plans

Yes

No plans

Yes

No plans

Tecumseh 8

No plans

Yes (c)

No plans

Planned

No plans

(a) Equipment rebuild underway

(b) PM removal integrated into scrubbers

83% of MWs Currently Scrubbed