SEC Filing | Evergy, Inc.

View:

Download DOC

Download PDF

Download XLS

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) May 9, 2012

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 May 9, 2012, we issued a press release announcing our earnings for the period ended March 31, 2012. A copy of our May 9, 2012 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2012 First 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 May 9, 2012

Exhibit 99.2 2012 First 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.


	Westar Energy, Inc.

Date: May 9, 2012	By:	/s/ Larry D. Irick
	Name:	Larry D. Irick
	Title:	Vice President, General Counsel
		and Corporate Secretary

EXHIBIT INDEX


Exhibit Number		Description of Exhibit

Exhibit 99.1		Press Release dated May 9, 2012

Exhibit 99.2		2012 First Quarter Earnings package

Press Release dated May 9, 2012

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 1^ST QUARTER 2012 RESULTS

Warmest 1^st Quarter in more than 50 years

TOPEKA, Kan., May 9, 2012 — Westar Energy, Inc. (NYSE:WR) today announced earnings for first quarter 2012 were $27 million, or $0.21 per share, compared with $31 million, or $0.27 per share, for the same period in 2011. Earnings for 2011 include the effects of costs related to legal settlements last year. Per share results for the first quarter 2012 reflect additional shares outstanding as a result of the company having issued shares to fund capital investments.

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


	Three Months Ended March 31,
	2012		2011			Change
Basic earnings per share	$	0.21	$	0.27		$	(0.06	)
Less adjustment for:
Legal costs related to legal settlements (a)		—		(0.01	)		0.01

Ongoing (non-GAAP) earnings per share	$	0.21	$	0.28		$	(0.07	)

(a)	Per share amounts adjusted for income tax expense

The primary drivers for the decrease in first quarter 2012 ongoing net income were lower retail sales largely due to extremely mild winter weather and higher costs associated with power plant maintenance. Our service territory experienced the warmest first quarter in more than 50 years. These factors were partially offset by benefits from corporate-owned life insurance.

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


Westar Energy announces first quarter 2012 results		Page 2 of 4


	Three Months Ended March 31,
	2012		2011			Change
	(Dollars in millions)
Net income attributable to common stock	$	27.3	$	31.3		$	(4.0	)
Less adjustment for:
Legal costs related to legal settlements (a)		—		(1.0	)		1.0

Ongoing (non-GAAP) net income	$	27.3	$	32.3		$	(5.0	)

(a)	Adjusted for income tax expense

Earnings Guidance

The company affirmed its 2012 earnings guidance of $1.85 to $2.00 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. It is located under Supplemental Materials within the Investors section of the company website at www.WestarEnergy.com.

Conference Call and Additional Company Information

Westar Energy management will host a conference call Thursday, May 10 with the investment community at 10 a.m. ET (9 a.m. CT). Investors, media and the public may listen to the conference call by dialing 866-770-7125, participant code 75566875. 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, supplemental materials with detailed first quarter 2012 financial information, the company’s quarterly report on Form 10-Q for the period ended Mar. 31, 2012 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 announces first quarter 2012 results		Page 3 of 4

Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas, providing electric service to about 689,000 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, 2011 (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 May 9, 2012 (a) in ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 8 and 9; and (2) 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 first quarter 2012 results		Page 4 of 4

Westar Energy, Inc

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended March 31,
	2012			2011			Change			% Change
REVENUES:
Residential	$	138,418		$	152,908		$	(14,490	)		(9.5	)
Commercial		129,651			128,827			824			0.6
Industrial		85,420			79,196			6,224			7.9
Other retail		(2,920	)		(3,014	)		94			3.1

Total Retail Revenues		350,569			357,917			(7,348	)		(2.1	)
Wholesale		71,212			78,594			(7,382	)		(9.4	)
Transmission		45,963			37,176			8,787			23.6
Other		7,933			8,033			(100	)		(1.2	)

Total Revenues		475,677			481,720			(6,043	)		(1.3	)

OPERATING EXPENSES:
Fuel and purchased power		127,654			134,184			(6,530	)		(4.9	)
Operating and maintenance		156,044			137,351			18,693			13.6
Depreciation and amortization		73,280			70,259			3,021			4.3
Selling, general and administrative		47,334			48,767			(1,433	)		(2.9	)

Total Operating Expenses		404,312			390,561			13,751			3.5

INCOME FROM OPERATIONS		71,365			91,159			(19,794	)		(21.7	)

OTHER INCOME (EXPENSE):
Investment income		4,324			1,968			2,356			119.7
Other income		13,590			2,249			11,341			504.3
Other expense		(5,553	)		(5,368	)		(185	)		(3.4	)

Total Other Income (Expense)		12,361			(1,151	)		13,512			n.m.

Interest expense		42,046			43,538			(1,492	)		(3.4	)

INCOME BEFORE INCOME TAXES		41,680			46,470			(4,790	)		(10.3	)
Income tax expense		12,443			13,513			(1,070	)		(7.9	)

NET INCOME		29,237			32,957			(3,720	)		(11.3	)
Less: Net income attributable to noncontrolling interests		1,713			1,373			340			24.8

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY		27,524			31,584			(4,060	)		(12.9	)
Preferred dividends		242			242			—			—

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	27,282		$	31,342		$	(4,060	)		(13.0	)

Earnings per common share, basic	$	0.21		$	0.27		$	(0.06	)		(22.2	)

Average equivalent common shares outstanding		126,495			113,875			12,620			11.1

DIVIDENDS DECLARED PER COMMON SHARE	$	0.33		$	0.32		$	0.01			3.1

n.m. – not meaningful

2012 First Quarter Earnings package

Exhibit 99.2

Westar Energy, Inc

First Quarter 2012 Earnings

Released May 9, 2012

Contents


	Page
Consolidated statements of income		1
Consolidated balance sheets		2
Consolidated statements of cash flows		3
Earnings variances		4
Supplemental data		5
Capitalization & Long-term Debt Table		6
GAAP to Non-GAAP reconciliation		7

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 March 31, 2012 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 March 31,
	2012			2011			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	138,418		$	152,908		$	(14,490	)		(9.5	)
Commercial		129,651			128,827			824			0.6
Industrial		85,420			79,196			6,224			7.9
Other retail		(2,920	)		(3,014	)		94			3.1

Total Retail Revenues		350,569			357,917			(7,348	)		(2.1	)
Wholesale		71,212			78,594			(7,382	)		(9.4	)
Transmission		45,963			37,176			8,787			23.6
Other		7,933			8,033			(100	)		(1.2	)

Total Revenues		475,677			481,720			(6,043	)		(1.3	)

OPERATING EXPENSES:
Fuel and purchased power		127,654			134,184			(6,530	)		(4.9	)
Operating and maintenance		156,044			137,351			18,693			13.6
Depreciation and amortization		73,280			70,259			3,021			4.3
Selling, general and administrative		47,334			48,767			(1,433	)		(2.9	)

Total Operating Expenses		404,312			390,561			13,751			3.5

INCOME FROM OPERATIONS		71,365			91,159			(19,794	)		(21.7	)

OTHER INCOME (EXPENSE):
Investment income		4,324			1,968			2,356			119.7
Other income		13,590			2,249			11,341			504.3
Other expense		(5,553	)		(5,368	)		(185	)		(3.4	)

Total Other Income (Expense)		12,361			(1,151	)		13,512			nm

Interest expense		42,046			43,538			(1,492	)		(3.4	)

INCOME BEFORE INCOME TAXES		41,680			46,470			(4,790	)		(10.3	)
Income tax expense		12,443			13,513			(1,070	)		(7.9	)

NET INCOME		29,237			32,957			(3,720	)		(11.3	)
Less: Net income attributable to noncontrolling interests		1,713			1,373			340			24.8

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY		27,524			31,584			(4,060	)		(12.9	)
Preferred dividends		242			242			—			—

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	27,282		$	31,342		$	(4,060	)		(13.0	)

Earnings per common share, basic	$	0.21		$	0.27		$	(0.06	)		(22.2	)

Average equivalent common shares outstanding		126,495			113,875			12,620			11.1

DIVIDENDS DECLARED PER COMMON SHARE	$	0.33		$	0.32		$	0.01			3.1

Effective income tax rate		29.85	%		29.08	%

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 March 31, 2012 should be read in conjunction with this financial information.

Westar Energy, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, except par values)

(Unaudited)


	March 31,		December 31,
	2012		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,726	$	3,539
Accounts receivable, net		197,826		226,428
Fuel inventory and supplies		254,604		229,118
Energy marketing contracts		6,079		8,180
Taxes receivable		—		5,334
Deferred tax assets		—		394
Prepaid expenses		17,396		13,078
Regulatory assets		130,179		123,818
Other		22,041		23,696

Total Current Assets		631,851		633,585

PROPERTY, PLANT AND EQUIPMENT, NET		6,554,272		6,411,922

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		330,614		333,494

OTHER ASSETS:
Regulatory assets		917,169		922,272
Nuclear decommissioning trust		143,164		130,270
Other		264,321		251,308

Total Other Assets		1,324,654		1,303,850

TOTAL ASSETS	$	8,841,391	$	8,682,851

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt of variable interest entities	$	48,394	$	28,114
Short-term debt		281,667		286,300
Accounts payable		202,154		187,428
Accrued taxes		80,943		52,451
Energy marketing contracts		5,877		6,353
Accrued interest		93,019		77,437
Regulatory liabilities		43,627		40,857
Other		117,660		148,347

Total Current Liabilities		873,341		827,287

LONG-TERM LIABILITIES:
Long-term debt, net		2,670,469		2,491,109
Long-term debt of variable interest entities, net		223,756		249,283
Deferred income taxes		1,108,793		1,110,463
Unamortized investment tax credits		162,219		164,175
Regulatory liabilities		240,658		230,530
Accrued employee benefits		556,097		592,617
Asset retirement obligations		144,585		142,508
Other		72,508		74,138

Total Long-Term Liabilities		5,179,085		5,054,823

COMMITMENTS AND CONTINGENCIES (See Note 8 and 9 in Form 10-Q)

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 shares; issued and outstanding 126,068,973 and 125,698,396 shares, respectively		630,345		628,492
Paid-in capital		1,641,892		1,639,503
Retained earnings		486,272		501,216

Total Westar Energy Shareholders’ Equity		2,779,945		2,790,647

Noncontrolling Interests		9,020		10,094

Total Equity		2,788,965		2,800,741

TOTAL LIABILITIES AND EQUITY	$	8,841,391	$	8,682,851

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

for the period ended March 31, 2012 should be read in conjunction with this financial information.

Westar Energy, Inc.

Consolidated Statements of Cash Flows

(Dollars in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2012			2011
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	29,237		$	32,957
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		73,280			70,259
Amortization of nuclear fuel		1,378			5,787
Amortization of deferred regulatory gain from sale-leaseback		(1,374	)		(1,374	)
Amortization of corporate-owned life insurance		7,375			6,308
Non-cash compensation		2,028			2,201
Net changes in energy marketing assets and liabilities		(733	)		455
Net deferred income taxes and credits		3,958			16,286
Stock based compensation excess tax benefits		(1,381	)		(629	)
Allowance for equity funds used during construction		(3,940	)		(1,752	)
Changes in working capital items:
Accounts receivable		28,603			20,344
Fuel inventory and supplies		(25,294	)		(13,584	)
Prepaid expenses and other		(8,799	)		5,640
Accounts payable		(5,453	)		(2,164	)
Accrued taxes		34,047			17,123
Other current liabilities		(5,706	)		(19,493	)
Changes in other assets		(40,643	)		(20,327	)
Changes in other liabilities		(22,620	)		(22,661	)

Cash flows from operating activities		63,963			95,376

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment		(189,966	)		(155,945	)
Purchase of securities within trusts		(7,160	)		(28,152	)
Sale of securities within trusts		8,023			27,582
Proceeds from investment in corporate-owned life insurance		16,177			512
Proceeds from federal grant		2,461			2,113
Investment in affiliated company		(2,502	)		(381	)
Investment in non-utitlity investments		(168	)		—
Other investing activities		(863	)		2,198

Cash flows used in investing activities		(173,998	)		(152,073	)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net		(4,633	)		78,640
Proceeds from long-term debt		246,656			—
Retirements of long-term debt		(70,563	)		(191	)
Retirements of long-term debt of variable interest entities		(5,088	)		(8,386	)
Repayment of capital leases		(614	)		(444	)
Borrowings against cash surrender value of corporate-owned life insurance		1,074			1,062
Repayment of borrowings against cash surrender value of corporate-owned life insurance		(18,131	)		(2,897	)
Stock based compensation excess tax benefits		1,381			629
Issuance of common stock		1,811			25,787
Distributions to shareholders of noncontrolling interests		(2,787	)		(1,880	)
Cash dividends paid		(38,884	)		(33,208	)

Cash flows from financing activities		110,222			59,112

NET INCREASE IN CASH AND CASH EQUIVALENTS		187			2,415

CASH AND CASH EQUIVALENTS:
Beginning of period		3,539			928

End of period	$	3,726		$	3,343

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

for the period ended March 31, 2012 should be read in conjunction with this financial information.

Westar Energy, Inc.

1st Quarter 2012 vs. 2011

Earnings Variances


				Change
	($ per share)			(Dollars in thousands)
2011 earnings attributable to common stock	$	0.27		$	31,342


				*Favorable / (Unfavorable)*

Retail					(7,348	)	A
Wholesale					(7,382	)	B
Transmission					8,787
Other revenues					(100	)
Fuel and purchased power					6,530		C
SPP network transmission costs					(7,311	)

Gross Margin					(6,824	)
Operating and maintenance w/o SPP NITS					(11,382	)	D
Depreciation and amortization					(3,021	)	E
Selling, general and administrative					1,433		F
Other income (expense)					13,512		G
Interest expense					1,492
Income tax expense					1,070
Net income attributable to noncontrolling interests					(340	)
Change in shares outstanding		(0.02	)

2012 earnings attributable to common stock	$	0.21		$	27,282

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

A	Due principally to 6% decrease in MWh sales ( see page 5 for changes by customer class)

B	Due to decreased demand; MWh sales decreased by 11% (see page 5 for changes by customer class)

C	Due principally to under collection of fuel expense through Retail Energy Clause Adjustment

D	Increases due principally to: unplanned outage expense at Wolf Creek — ($6.2M); higher amortization of deferred refuel and maintenance outage expenses — ($2.3M); increase property tax expense (this is largely offset in revenues through property tax surcharge — ($2.4M)

E	Higher plant balances due to additions at power plants, including environmental controls and the addition of tranmission facilities

F	Decrease due primarily to lower legal costs — $1.7M

G	Increase due primarily to: increased mark-to-market gains on investments in a trust to fund retirement benefits — $2.2M; increase in equity AFUDC primarily due to increased construction activity — $2.2M; and recording death proceeds from COLI program — $9.2M

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

for the period ended March 31, 2012 should be read in conjunction with this financial information.

Westar Energy, Inc

Revenue, Sales and Energy Supply

Supplemental Data


	Three Months Ended March 31,
	2012			2011			Change			% Change
	(Dollars In Thousands)
Revenues
Residential	$	138,418		$	152,908		$	(14,490	)		(9.5	)
Commercial		129,651			128,827			824			0.6
Industrial		85,420			79,196			6,224			7.9
Other retail		3,055			3,018			37			1.2
Provision for rate refunds		(5,975	)		(6,032	)		57			0.9

Total Retail Revenues		350,569			357,917			(7,348	)		(2.1	)
Tariff-based wholesale		62,532			60,138			2,394			4.0
Market-based wholesale		8,680			18,456			(9,776	)		(53.0	)
Transmission		45,963			37,176			8,787			23.6
Other		7,933			8,033			(100	)		(1.2	)

Total Revenues	$	475,677		$	481,720		$	(6,043	)		(1.3	)


	(Thousands of MWh)
Electricity Sales
Residential		1,415			1,658			(243	)		(14.7	)
Commercial		1,649			1,704			(55	)		(3.2	)
Industrial		1,361			1,337			24			1.8
Other retail		21			22			(1	)		(4.5	)

Total Retail		4,446			4,721			(275	)		(5.8	)

Tariff-based wholesale		1,349			1,376			(27	)		(2.0	)
Market-based wholesale		344			534			(190	)		(35.6	)

Total wholesale		1,693			1,910			(217	)		(11.4	)

Total Electricity Sales		6,139			6,631			(492	)		(7.4	)


	(Dollars per MWh)
Total retail	$	78.85		$	75.81		$	3.04			4.0
Tariff-based wholesale	$	46.35		$	43.70		$	2.65			6.1
Market-based wholesale	$	25.23		$	34.56		$	(9.33	)		(27.0	)

	(Dollars In Thousands)
Fuel and Purchased Power
Fuel used for generation	$	99,635		$	114,536		$	(14,901	)		(13.0	)
Purchased power		37,410			20,836			16,574			79.5

Subtotal		137,045			135,372			1,673			1.2
RECA recovery and other		(9,391	)		(1,188	)		(8,203	)		(690.5	)

Total fuel and purchased power expense	$	127,654		$	134,184		$	(6,530	)		(4.9	)


	(Thousands of MWh)
Electricity Supply
Generated - Gas/oil		453			332			121			36.4
Coal		4,129			4,859			(730	)		(15.0	)
Nuclear		201			1,024			(823	)		(80.4	)
Wind		125			116			9			7.8

Subtotal electricity generated		4,908			6,331			(1,423	)		(22.5	)
Purchased		1,571			598			973			162.7

Total Electricity Supply		6,479			6,929			(450	)		(6.5	)


	(Dollars per MWh)
Average cost of fuel used for generation	$	20.30		$	18.09		$	2.21			12.2
Average cost of purchased power	$	23.81		$	34.84		$	(11.03	)		(31.7	)
Average cost of fuel and purchased power	$	21.15		$	19.54		$	1.61			8.2


	2012			2011 / 20 yr Avg			Change			% Change
Degree Days
Cooling
Actual compared to last year		45			12			33			275.0
Actual compared to 20 year average		45			2			43			2,150.0
Heating
Actual compared to last year		1,826			2,692			(866	)		(32.2	)
Actual compared to 20 year average		1,826			2,447			(621	)		(25.4	)

Westar Energy, Inc.

Capitalization


	March 31, 2012				December 31, 2011
	(Dollars in Thousands)
Current maturities of long-term debt of VIEs	$	48,394			$	28,114
Long-term debt, net		2,670,469				2,491,109
Long-term debt of variable interest entities, net		223,756				249,283

Total debt		2,942,619	51.3	%		2,768,506	49.7	%
Preferred		21,436	0.4	%		21,436	0.4	%
Common equity		2,758,509	48.1	%		2,769,211	49.7	%
Noncontrolling interests		9,020	0.2	%		10,094	0.2	%

Total capitalization	$	5,731,584	100.0	%	$	5,569,247	100.0	%

GAAP Book value per share	$	21.88			$	22.03
Period end shares outstanding (in thousands)		126,069				125,698

Outstanding long-term debt table


	CUSIP			March 31, 2012			December 31, 2011
				(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
4.125% Series due December 2042		95709TAH3			250,000			—

					1,600,000			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

					75,500			132,745

Total Westar Energy					1,675,500			1,482,745

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
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

					373,940			387,258

Total KGE					998,940			1,012,258

Total long-term debt					2,674,440			2,495,003

Unamortized debt discount					(3,971	)		(3,894	)
Long-term debt due within one year					—			—

Total long-term debt, net				$	2,670,469		$	2,491,109

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 months ended March 31, 2012 and 2011 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 March 31,
	2012			2011			Change
	(Dollars In Thousands)
Revenues
Residential	$	138,418		$	152,908		$	(14,490	)
Commercial		129,651			128,827			824
Industrial		85,420			79,196			6,224
Other retail		(2,920	)		(3,014	)		94

Total Retail Revenues		350,569			357,917			(7,348	)
Wholesale		71,212			78,594			(7,382	)
Transmission		45,963			37,176			8,787
Other		7,933			8,033			(100	)

Total Revenues		475,677			481,720			(6,043	)
Less: Fuel and purchased power expense		127,654			134,184			(6,530	)
SPP network transmission costs		39,362			32,051			7,311

Gross Margin	$	308,661		$	315,485		$	(6,824	)

Gross margin	$	308,661		$	315,485		$	(6,824	)
Add: SPP network transmission costs		39,362			32,051			7,311
Less: Operating and maintenance expense		156,044			137,351			18,693
Depreciation and amortization expense		73,280			70,259			3,021
Selling, general and administrative expense		47,334			48,767			(1,433	)

Income from operations	$	71,365		$	91,159		$	(19,794	)

Operating and maintenance expense	$	156,044		$	137,351		$	18,693
Less: SPP Network transmission costs		39,362			32,051			7,311

Operating and maintenance expense w/o SPP NITS	$	116,682		$	105,300		$	11,382