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WR_12.31.2012-Earnings Release 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) February 28, 2013

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
 
66,612
(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 February 28, 2013, we issued a press release announcing our earnings for the period ended December 31, 2012. A copy of our February 28, 2013 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2012 Fourth Quarter and Year-End 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 7.01. Regulation FD Disclosure.

We are furnishing our 2013 Earnings Guidance summary, which is attached hereto as Exhibit 99.3 and is incorporated herein by reference. This information is available to the public on our website, http://www.WestarEnergy.com. The information furnished pursuant to this Item 7.01, including Exhibit 99.3, 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 February 28, 2013
Exhibit 99.2    2012 Fourth Quarter and Year-End Earnings Package
Exhibit 99.3    2013 Earnings Guidance





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:
 
February 28, 2013
 
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 February 28, 2013
Exhibit 99.2
 
2012 Fourth Quarter and Year-End Earnings Package
Exhibit 99.3
 
2013 Earnings Guidance




12.31.2012 8-K Exhibit 99.1

Exhibit 99.1
Media contact:
Erin La Row,
Senior communications rep.
Phone: 785.575.6060
Erin.la.row@WestarEnergy.com
 
Investor contact:
Bruce Burns,
director, investor relations
Phone: 785.575.8227
bruce.burns@WestarEnergy.com
WESTAR ENERGY ANNOUNCES 2012 RESULTS
Board declares 34 cent quarterly dividend
TOPEKA, Kan., Feb. 28, 2013 - Westar Energy, Inc. (NYSE:WR) today announced earnings of
$274 million, or $2.15 per share, for 2012 compared with earnings of $229 million, or $1.95 per share, for 2011. Earnings for 2011 included the benefits of reversing previously recorded accruals as a result of legal settlements and a gain on the sale of a non-utility investment. Earnings were $46 million, or $0.36 per share, for the fourth quarter 2012 compared with earnings of $19 million, or $0.16 per share, for the fourth quarter 2011.
Following are reconciliations of GAAP to ongoing (non-GAAP) net income and earnings per share:
 
Three Months Ended Dec. 31,
 
 
Twelve Months Ended Dec. 31,
 
2012
 
2011
 
Change
 
2012
 
2011
 
Change
 
(In millions, except per share amounts)
Net income attributable to common stock
$
45.6

 
$
19.3

 
$
26.3

 
$
273.5

 
$
229.3

 
$
44.2

Less adjustments for:
 
 
 
 
 
 
 
 
 
 
 
Reversal of accruals related to legal settlements (a)
—

 
—

 
—

 
—

 
8.9

 
(8.9
)
Gain on sale of non-utility investment
—

 
—

 
—

 
—

 
7.2

 
(7.2
)
Ongoing (non-GAAP) net income
$
45.6

 
$
19.3

 
$
26.3

 
$
273.5

 
$
213.2

 
$
60.3

 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.36

 
$
0.16

 
$
0.20

 
$
2.15

 
$
1.95

 
$
0.20

Less adjustment for:
 
 
 
 

 
 
 
 
 
 
Reversal of accruals related to legal settlements (a)
—

 
—

 
—

 
—

 
0.08

 
(0.08
)
Gain on sale of non-utility investment
—

 
—

 
—

 
—

 
0.06

 
(0.06
)
Ongoing (non-GAAP) earnings per share
$
0.36

 
$
0.16

 
$
0.20

 
$
2.15


$
1.81

 
$
0.34

 
 
 
 
 
 
 
 
 
 
 
 
(a) Adjusted for income taxes and legal expenses related to legal settlement
The primary driver for the $26 million increase in fourth quarter ongoing net income was higher retail revenues. The primary drivers for the $60 million increase in full year 2012 ongoing net income were higher

Westar Energy announces 2012 results                                Page 2 of 4

retail revenues, reduced depreciation expense and recording $17 million in corporate-owned life insurance benefits. These items were partially offset by increases in operating costs due in part to implementing a rate order in April. Per share results for both periods in 2012 reflect additional shares outstanding as a result of the company having issued shares to fund capital investments.
Earnings Guidance
The company issued earnings guidance for 2013 of $2.00 to $2.15 per share and 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.
Dividend Declaration
The Board of Directors today declared a quarterly dividend of 34 cents per share payable Apr. 1, 2013 on the company's common stock payable to shareholders of record as of Mar. 11, 2013. The new dividend reflects a 3 percent increase over the company's previous quarterly dividend of 33 cents per share, and results in an indicated annual dividend of $1.36 per share.
Conference Call and Additional Company Information
Westar Energy management will host a conference call Friday, Mar. 1 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 866-730-5762, participant code 45237361. 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 Erin La Row with any follow-up questions.
This earnings announcement, a package of detailed fourth quarter and year-end 2012 financial information, the company's annual report on Form 10-K for the period ended Dec. 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.
- 30 -



Westar Energy announces 2012 results                                Page 3 of 4


Westar Energy, Inc. (NYSE: WR) is Kansas' largest electric utility. For more than a century, we have provided Kansans the safe, reliable electricity needed to power their businesses and homes. Every day our team of professionals takes on projects to generate and deliver electricity, protect the environment and provide excellent service to our nearly 700,000 customers. Westar has 7,200 MW of electric generation capacity fueled by coal, uranium, natural gas, wind and landfill gas. We are also a leader in electric transmission in Kansas. Our innovative customer service programs include mobile-enabled customer care, a smart meter pilot project and paving the way for electric vehicle adoption. Our employees live, volunteer and work in the communities we serve.

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, 2012 (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; 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 2012 results                                Page 4 of 4

Westar Energy, Inc.
Consolidated Statements of Income
(Unaudited)

 
Three Months Ended Dec. 31,
 
Twelve Months Ended Dec. 31,
 
2012
 
2011
 
Change
 
% Change
 
2012
 
2011
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
$
148,494

 
$
136,604

 
$
11,890

 
8.7
 
$
714,562

 
$
693,388

 
$
21,174

 
3.1
Commercial
146,839

 
134,175

 
12,664

 
9.4
 
640,654

 
604,626

 
36,028

 
6.0
Industrial
90,873

 
79,379

 
11,494

 
14.5
 
368,909

 
347,881

 
21,028

 
6.0
Other retail
(6,970
)
 
(205
)
 
(6,765
)
 
nm
 
(5,845
)
 
(8,964
)
 
3,119

 
34.8
Total Retail Revenues
379,236

 
349,953

 
29,283

 
8.4
 
1,718,280

 
1,636,931

 
81,349

 
5.0
Wholesale
87,387

 
89,752

 
(2,365
)
 
(2.6)
 
316,353

 
346,948

 
(30,595
)
 
(8.8)
Transmission
49,317

 
39,158

 
10,159

 
25.9
 
193,797

 
154,569

 
39,228

 
25.4
Other
7,832

 
7,365

 
467

 
6.3
 
33,040

 
32,543

 
497

 
1.5
Total Revenues
523,772

 
486,228

 
37,544

 
7.7
 
2,261,470

 
2,170,991

 
90,479

 
4.2
OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Fuel and purchased power
137,150

 
144,096

 
(6,946
)
 
(4.8)
 
589,990

 
630,793

 
(40,803
)
 
(6.5)
Operating and maintenance
151,356

 
145,323

 
6,033

 
4.2
 
612,871

 
557,752

 
55,119

 
9.9
Depreciation and amortization
65,823

 
71,771

 
(5,948
)
 
(8.3)
 
270,464

 
285,322

 
(14,858
)
 
(5.2)
Selling, general and administrative
61,668

 
52,463

 
9,205

 
17.5
 
226,012

 
184,695

 
41,317

 
22.4
Total Operating Expenses
415,997

 
413,653

 
2,344

 
0.6
 
1,699,337

 
1,658,562

 
40,775

 
2.5
INCOME FROM OPERATIONS
107,775

 
72,575

 
35,200

 
48.5
 
562,133

 
512,429

 
49,704

 
9.7
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Investment earnings
955

 
3,046

 
(2,091
)
 
(68.6)
 
7,411

 
9,301

 
(1,890
)
 
(20.3)
Other income
8,136

 
441

 
7,695

 
nm
 
35,378

 
8,652

 
26,726

 
308.9
Other expense
(5,740
)
 
(4,445
)
 
(1,295
)
 
(29.1)
 
(19,987
)
 
(18,398
)
 
(1,589
)
 
(8.6)
Total Other Income (Expense)
3,351

 
(958
)
 
4,309

 
449.8
 
22,802

 
(445
)
 
23,247

 
nm
Interest expense
44,451

 
41,779

 
2,672

 
6.4
 
176,337

 
172,460

 
3,877

 
2.2
INCOME BEFORE INCOME TAXES
66,675

 
29,838

 
36,837

 
123.5
 
408,598

 
339,524

 
69,074

 
20.3
Income tax expense
18,980

 
8,532

 
10,448

 
122.5
 
126,136

 
103,344

 
22,792

 
22.1
NET INCOME
47,695

 
21,306

 
26,389

 
123.9
 
282,462

 
236,180

 
46,282

 
19.6
Less: Net income attributable to noncontrolling interests
2,088

 
1,729

 
359

 
20.8
 
7,316

 
5,941

 
1,375

 
23.1
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
45,607

 
19,577

 
26,030

 
133.0
 
275,146

 
230,239

 
44,907

 
19.5
Preferred dividends
—

 
242

 
(242
)
 
(100.0)
 
1,616

 
970

 
646

 
66.6
NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
45,607

 
$
19,335

 
$
26,272

 
135.9
 
$
273,530

 
$
229,269

 
$
44,261

 
19.3
Earnings per common share, basic
$
0.36

 
$
0.16

 
$
0.20

 
125.0
 
$
2.15

 
$
1.95

 
$
0.20

 
10.3
Average equivalent common shares outstanding
126,929

 
121,880

 
5,049

 
4.1
 
126,712

 
116,891

 
9,821

 
8.4
DIVIDENDS DECLARED PER COMMON SHARE
$
0.33

 
$
0.32

 
$
0.01

 
3.1
 
$
1.32

 
$
1.28

 
$
0.04

 
3.1
Effective income tax rate
28.47
%
 
28.59
%
 
 
 
 
 
30.87
%
 
30.44
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
nm - not meaningful


12.31.2012 8-K Exhibit 99.2


Exhibit 99.2
Westar Energy, Inc.
Fourth Quarter and Year-end 2012 Earnings
Released February 28, 2013





Contents
Page
 
 
1
3
4
5
7
9
10
11














Bruce Burns
Director Investor Relations
785-575-8227
bruce.burns@WestarEnergy.com



NOTE:
The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K for the period ended December 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 December 31,
 
2012
 
2011
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
 
 
REVENUES:
 
 
 
 
 
 
 
Residential
$
148,494


$
136,604

 
$
11,890

 
8.7

Commercial
146,839


134,175

 
12,664

 
9.4

Industrial
90,873


79,379

 
11,494

 
14.5

Other retail
(6,970
)

(205
)
 
(6,765
)
 
nm

Total Retail Revenues
379,236

 
349,953

 
29,283

 
8.4

Wholesale
87,387


89,752

 
(2,365
)
 
(2.6
)
Transmission
49,317


39,158

 
10,159

 
25.9

Other
7,832


7,365

 
467

 
6.3

Total Revenues
523,772

 
486,228

 
37,544

 
7.7

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
137,150


144,096

 
(6,946
)
 
(4.8
)
Operating and maintenance
151,356


145,323

 
6,033

 
4.2

Depreciation and amortization
65,823


71,771

 
(5,948
)
 
(8.3
)
Selling, general and administrative
61,668


52,463

 
9,205

 
17.5

Total Operating Expenses
415,997

 
413,653

 
2,344

 
0.6

INCOME FROM OPERATIONS
107,775

 
72,575

 
35,200

 
48.5

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
955

 
3,046

 
(2,091
)
 
(68.6
)
Other income
8,136

 
441

 
7,695

 
nm

Other expense
(5,740
)
 
(4,445
)
 
(1,295
)
 
(29.1
)
Total Other Income (Expense)
3,351

 
(958
)
 
4,309

 
449.8

Interest expense
44,451

 
41,779

 
2,672

 
6.4

INCOME BEFORE INCOME TAXES
66,675

 
29,838

 
36,837

 
123.5

Income tax expense
18,980

 
8,532

 
10,448

 
122.5

NET INCOME
47,695

 
21,306

 
26,389

 
123.9

Less: Net income attributable to noncontrolling interests
2,088

 
1,729

 
359

 
20.8

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
45,607

 
19,577

 
26,030

 
133.0

Preferred dividends
—

 
242

 
(242
)
 
(100.0
)
NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
45,607

 
$
19,335

 
$
26,272

 
135.9

Earnings per common share, basic
$
0.36

 
$
0.16

 
$
0.20

 
125.0

Average equivalent common shares outstanding
126,929

 
121,880

 
5,049

 
4.1

DIVIDENDS DECLARED PER COMMON SHARE
$
0.33

 
$
0.32

 
$
0.01

 
3.1

Effective income tax rate
28.47
%
 
28.59
%
 
 
 
 
 
 
 
 
 
 
 
 
nm - not meaningful






The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 1




Westar Energy, Inc.
Consolidated Statements of Income
(Unaudited)

 
Twelve Months Ended December 31,
 
2012
 
2011
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
 
 
REVENUES:
 
 
 
 
 
 
 
Residential
$
714,562


$
693,388

 
$
21,174

 
3.1

Commercial
640,654


604,626

 
36,028

 
6.0

Industrial
368,909


347,881

 
21,028

 
6.0

Other retail
(5,845
)

(8,964
)
 
3,119

 
34.8

Total Retail Revenues
1,718,280

 
1,636,931

 
81,349

 
5.0

Wholesale
316,353


346,948

 
(30,595
)
 
(8.8
)
Transmission
193,797


154,569

 
39,228

 
25.4

Other
33,040


32,543

 
497

 
1.5

Total Revenues
2,261,470

 
2,170,991

 
90,479

 
4.2

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
589,990

 
630,793

 
(40,803
)
 
(6.5
)
Operating and maintenance
612,871

 
557,752

 
55,119

 
9.9

Depreciation and amortization
270,464

 
285,322

 
(14,858
)
 
(5.2
)
Selling, general and administrative
226,012

 
184,695

 
41,317

 
22.4

Total Operating Expenses
1,699,337

 
1,658,562

 
40,775

 
2.5

INCOME FROM OPERATIONS
562,133

 
512,429

 
49,704

 
9.7

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
7,411

 
9,301

 
(1,890
)
 
(20.3
)
Other income
35,378

 
8,652

 
26,726

 
308.9

Other expense
(19,987
)
 
(18,398
)
 
(1,589
)
 
(8.6
)
Total Other Income (Expense)
22,802

 
(445
)
 
23,247

 
nm

Interest expense
176,337

 
172,460

 
3,877

 
2.2

INCOME BEFORE INCOME TAXES
408,598

 
339,524

 
69,074

 
20.3

Income tax expense
126,136

 
103,344

 
22,792

 
22.1

NET INCOME
282,462

 
236,180

 
46,282

 
19.6

Less: Net income attributable to noncontrolling interests
7,316

 
5,941

 
1,375

 
23.1

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
275,146

 
230,239

 
44,907

 
19.5

Preferred dividends
1,616

 
970

 
646

 
66.6

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
273,530

 
$
229,269

 
$
44,261

 
19.3

Earnings per common share, basic
$
2.15

 
$
1.95

 
$
0.20

 
10.3

Average equivalent common shares outstanding
126,712

 
116,891

 
9,821

 
8.4

DIVIDENDS DECLARED PER COMMON SHARE
$
1.32

 
$
1.28

 
$
0.04

 
3.1

Effective income tax rate
30.87
%
 
30.44
%
 
 
 
 
 
 
 
 
 
 
 
 
nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 2



Westar Energy, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except Par Values)
(Unaudited)
 
December 31, 2012
 
December 31, 2011
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
5,829

 
$
3,539

Restricted Cash
573

 
—

Accounts receivable, net of allowance for doubtful accounts of $4,916 and $7,384, respectively
224,439

 
226,428

Fuel inventory and supplies
249,016

 
229,118

Taxes receivable
—

 
5,334

Deferred tax assets
—

 
394

Prepaid expenses
15,847

 
13,078

Regulatory assets
114,895

 
123,818

Other
32,476

 
31,876

Total Current Assets
643,075

 
633,585

PROPERTY, PLANT AND EQUIPMENT, NET
7,013,765

 
6,411,922

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
321,975

 
333,494

OTHER ASSETS:
 
 
 
Regulatory assets
887,777

 
922,272

Nuclear decommissioning trust
150,754

 
130,270

Other
247,885

 
251,308

Total Other Assets
1,286,416

 
1,303,850

TOTAL ASSETS
$
9,265,231

 
$
8,682,851

LIABILITIES AND EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current maturities of long-term debt of variable interest entities
$
25,942

 
$
28,114

Short-term debt
339,200

 
286,300

Accounts payable
180,825

 
187,428

Accrued dividends
41,743

 
40,463

Accrued taxes
58,624

 
52,451

Accrued interest
77,891

 
77,437

Regulatory liabilities
37,557

 
40,857

Other
84,359

 
114,237

Total Current Liabilities
846,141

 
827,287

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
2,819,271

 
2,491,109

Long-term debt of variable interest entities, net
222,743

 
249,283

Deferred income taxes
1,197,837

 
1,110,463

Unamortized investment tax credits
191,512

 
164,175

Regulatory liabilities
285,618

 
230,530

Accrued employee benefits
564,870

 
592,617

Asset retirement obligations
152,648

 
142,508

Other
74,336

 
74,138

Total Long-Term Liabilities
5,508,835

 
5,054,823

COMMITMENTS AND CONTINGENCIES (See Notes 13 and 15)
 
 
 
EQUITY:
 
 
 
Westar Energy, Inc. Shareholders’ Equity:
 
 
 
Cumulative preferred stock, par value $100 per share; authorized 600,000 shares; issued and outstanding zero shares and 214,363 shares, respective to each date
—

 
21,436

Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 126,503,748 shares and 125,698,396 shares, respective to each date
632,519

 
628,492

Paid-in capital
1,656,972

 
1,639,503

Retained earnings
606,649

 
501,216

Total Westar Energy, Inc. Shareholders’ Equity
2,896,140

 
2,790,647

Noncontrolling Interests
14,115

 
10,094

Total Equity
2,910,255

 
2,800,741

TOTAL LIABILITIES AND EQUITY
$
9,265,231

 
$
8,682,851


The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 3



Westar Energy, Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)

 
Twelve Months Ended December 31,
 
2012
 
2011
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
282,462

 
$
236,180

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
270,464

 
285,322

Amortization of nuclear fuel
24,369

 
21,151

Amortization of deferred regulatory gain from sale leaseback
(5,495
)
 
(5,495
)
Amortization of corporate-owned life insurance
28,792

 
25,650

Non-cash compensation
7,255

 
8,422

Net changes in energy marketing assets and liabilities
(372
)
 
926

Net deferred income taxes and credits
126,248

 
111,723

Stock-based compensation excess tax benefits
(1,698
)
 
(1,180
)
Allowance for equity funds used during construction
(11,706
)
 
(5,550
)
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
2,408

 
(1,638
)
Fuel inventory and supplies
(19,227
)
 
(21,485
)
Prepaid expenses and other
(3,630
)
 
(50,138
)
Accounts payable
(19,161
)
 
3,008

Accrued taxes
11,937

 
18,633

Other current liabilities
(105,169
)
 
(107,012
)
Changes in other assets
13,015

 
(10,167
)
Changes in other liabilities
(1,386
)
 
(16,369
)
Cash Flows from Operating Activities
599,106

 
462,696

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(810,209
)
 
(697,451
)
Purchase of securities within trusts
(20,473
)
 
(49,737
)
Sale of securities within trusts
21,604

 
47,534

Proceeds from trust
2,022

 
—

Investment in corporate-owned life insurance
(18,404
)
 
(19,214
)
Proceeds from investment in corporate-owned life insurance
33,542

 
1,295

Proceeds from federal grant
4,775

 
8,561

Investment in affiliated company
(8,669
)
 
(1,943
)
Proceeds from sale of non-utility investments
—

 
9,246

Other investing activities
(1,525
)
 
193

Cash Flows used in Investing Activities
(797,337
)
 
(701,516
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
52,900

 
54,081

Proceeds from long-term debt
541,374

 
—

Retirements of long-term debt
(220,563
)
 
(371
)
Retirements of long-term debt of variable interest entities
(28,114
)
 
(30,159
)
Repayment of capital leases
(2,679
)
 
(2,233
)
Borrowings against cash surrender value of corporate-owned life insurance
67,791

 
67,562

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(34,838
)
 
(3,421
)
Stock-based compensation excess tax benefits
1,698

 
1,180

Preferred stock redemption
(22,567
)
 
—

Issuance of common stock
6,996

 
294,942

Distributions to shareholders of noncontrolling interests
(3,295
)
 
(1,917
)
Cash dividends paid
(158,182
)
 
(138,233
)
Cash Flows from Financing Activities
200,521

 
241,431

NET INCREASE IN CASH AND CASH EQUIVALENTS
2,290

 
2,611

CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
3,539

 
928

End of period
$
5,829

 
$
3,539


The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 4



Westar Energy, Inc.
4th Quarter 2012 vs. 2011

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2011 earnings attributable to common stock
 
 
 
$
19,335

 
 
 
$
0.16

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
29,283

 
A
 
 
 
Wholesale
 
 
 
(2,365
)
 
B
 
 
 
Transmission
 
 
 
10,159

 
 
 
 
 
Other revenues
 
 
 
467

 
 
 
 
 
Fuel and purchased power
 
 
 
6,946

 
C
 
 
 
SPP network transmission costs
 
 
 
(8,864
)
 
 
 
 
 
Gross Margin
 
 
 
35,626

 
 
 
 
 
Operating and maintenance w/o SPP NITS
 
 
 
2,831

 
D
 
 
 
Depreciation and amortization
 
 
 
5,948

 
E
 
 
 
Selling, general and administrative
 
 
 
(9,205
)
 
F
 
 
 
Other income (expense)
 
 
 
4,309

 
G
 
 
 
Interest expense
 
 
 
(2,672
)
 
 
 
 
 
Income tax expense
 
 
 
(10,448
)
 
H
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(359
)
 
 
 
 
 
Preferred dividends
 
 
 
242

 
 
 
 
 
Change in shares outstanding
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012 earnings attributable to common stock
 
 
 
$
45,607

 
 
 
$
0.36

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due principally to increased average retail prices (see page 7 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due to decreased demand; MWh sales decreased 3% (see page 7 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due principally to collecting less-than-estimated fuel and purchased power expense in revenue
 
 
 
 
 
 
 
 
 
 
D
Due primarily to lower costs at Wolf Creek -- $3.3M
 
 
 
 
 
 
 
 
 
 
E
Due to reduced depreciation rates to reflect changes in the estimated useful lives of some of our assets
 
 
 
 
 
 
 
 
 
 
F
Due primarily to higher pension and other employee benefit costs -- ($6.4M); a contribution to our charitable organization -- ($3.5M)
 
 
 
 
 
 
 
 
 
 
G
Due primarily to COLI proceeds -- $4.7M
 
 
 
 
 
 
 
 
 
 
H
Due primarily to increased pretax income before operations

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 5


Westar Energy, Inc.
YTD December 2012 vs. 2011

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2011 earnings attributable to common stock
 
 
 
$
229,269

 
 
 
$
1.95

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
81,349

 
A
 
 
 
Wholesale
 
 
 
(30,595
)
 
B
 
 
 
Transmission
 
 
 
39,228

 
 
 
 
 
Other revenues
 
 
 
497

 
 
 
 
 
Fuel and purchased power
 
 
 
40,803

 
C
 
 
 
SPP network transmission costs
 
 
 
(34,383
)
 
 
 
 
 
Gross Margin
 
 
 
96,899

 
 
 
 
 
Operating and maintenance w/o SPP NITS
 
 
 
(20,736
)
 
D
 
 
 
Depreciation and amortization
 
 
 
14,858

 
E
 
 
 
Selling, general and administrative
 
 
 
(41,317
)
 
F
 
 
 
Other income (expense)
 
 
 
23,247

 
G
 
 
 
Interest expense
 
 
 
(3,877
)
 
 
 
 
 
Income tax expense
 
 
 
(22,792
)
 
H
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(1,375
)
 
 
 
 
 
Preferred dividends
 
 
 
(646
)
 
 
 
 
 
Change in shares outstanding
 
(0.18
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012 earnings attributable to common stock
 
 
 
$
273,530

 
 
 
$
2.15

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due to increased average retail prices (see page 8 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due primarily to decreased demand; MWh sales decreased 6% (see page 8 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due principally to decreased MWhs generated
 
 
 
 
 
 
 
 
 
 
D
Due principally to increased property tax expense (this is largely offset in revenues through property tax surcharge) -- ($9.2M); increased tree trimming expense -- ($5.9M); higher costs at Wolf Creek -- ($4.6M);
 
 
 
 
 
 
 
 
 
 
E
Due to reduced depreciation rates to reflect changes in the estimated useful lives of some of our assets
 
 
 
 
 
 
 
 
 
 
F
Due primarily to reversing accruals as a result of legal settlements in 2011 ($22.0M); higher pension and other employee benefit costs -- ($20.2M); higher transition costs as a result of sustainable cost reduction activities -- ($4.5M); lower legal costs related to arbitration claim in 2011 -- $9.4M
 
 
 
 
 
 
 
 
 
 
G
Due primarily to COLI proceeds -- $17.4M; increased equity AFUDC related to construction activity -- $6.2M; additional sales of oil inventory -- $3.1M
 
 
 
 
 
 
 
 
 
 
H
Due primarily to increased pretax income from operations

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 6



Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Three Months Ended December 31,
 
2012
 
2011
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
148,494

 
$
136,604

 
$
11,890

 
8.7

Commercial
146,839

 
134,175

 
12,664

 
9.4

Industrial
90,873

 
79,379

 
11,494

 
14.5

Other retail
3,125

 
3,046

 
79

 
2.6

Provision for rate refunds
(10,095
)
 
(3,251
)
 
(6,844
)
 
(210.5
)
Total Retail Revenues
379,236

 
349,953

 
29,283

 
8.4

Tariff-based wholesale
62,718

 
60,218

 
2,500

 
4.2

Market-based wholesale
24,669

 
29,534

 
(4,865
)
 
(16.5
)
Transmission
49,317

 
39,158

 
10,159

 
25.9

Other
7,832

 
7,365

 
467

 
6.3

Total Revenues
$
523,772

 
$
486,228

 
$
37,544

 
7.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
1,371

 
1,407

 
(36
)
 
(2.6
)
Commercial
1,740

 
1,748

 
(8
)
 
(0.5
)
Industrial
1,372

 
1,285

 
87

 
6.8

Other retail
21

 
22

 
(1
)
 
(4.5
)
Total Retail
4,504

 
4,462

 
42

 
0.9

Tariff-based wholesale
1,354

 
1,393

 
(39
)
 
(2.8
)
Market-based wholesale
974

 
1,015

 
(41
)
 
(4.0
)
Total wholesale
2,328

 
2,408

 
(80
)
 
(3.3
)
Total Electricity Sales
6,832

 
6,870

 
(38
)
 
(0.6
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
84.20

 
$
78.43

 
$
5.77

 
7.4

Tariff-based wholesale
$
46.32

 
$
43.23

 
$
3.09

 
7.1

Market-based wholesale
$
25.33

 
$
29.10

 
$
(3.77
)
 
(13.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
115,115

 
$
119,413

 
$
(4,298
)
 
(3.6
)
Purchased power
26,343

 
18,566

 
7,777

 
41.9

Subtotal
141,458

 
137,979

 
3,479

 
2.5

RECA recovery and other
(4,308
)
 
6,117

 
(10,425
)
 
(170.4
)
Total fuel and purchased power expense
$
137,150

 
$
144,096

 
$
(6,946
)
 
(4.8
)
 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
55

 
82

 
(27
)
 
(32.9
)
                    Coal
4,842

 
5,198

 
(356
)
 
(6.8
)
                    Nuclear
1,253

 
1,248

 
5

 
nm

                    Wind
100

 
128

 
(28
)
 
(21.9
)
Subtotal electricity generated
6,250

 
6,656

 
(406
)
 
(6.1
)
Purchased
865

 
565

 
300

 
53.1

Total Electricity Supply
7,115

 
7,221

 
(106
)
 
(1.5
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
18.42

 
$
17.94

 
$
0.48

 
2.7

Average cost of purchased power
$
30.45

 
$
32.86

 
$
(2.41
)
 
(7.3
)
Average cost of fuel and purchased power
$
19.88

 
$
19.11

 
$
0.77

 
4.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2011/
 
 
 
 
 
2012
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
44

 
52

 
(8
)
 
(15.4
)
Actual compared to 20 year average
44

 
39

 
5

 
12.8

Heating
 
 
 
 
 
 
 
Actual compared to last year
1,651

 
1,691

 
(40
)
 
(2.4
)
Actual compared to 20 year average
1,651

 
1,809

 
(158
)
 
(8.7
)
nm - not meaningful
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 7


Westar Energy, Inc.
Revenue, Sales and Energy Supply

Supplemental Data
Twelve Months Ended December 31,
 
2012
 
2011
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
714,562

 
$
693,388

 
$
21,174

 
3.1

Commercial
640,654

 
604,626

 
36,028

 
6.0

Industrial
368,909

 
347,881

 
21,028

 
6.0

Other retail
12,374

 
12,252

 
122

 
1.0

Provision for rate refunds
(18,219
)
 
(21,216
)
 
2,997

 
14.1

Total Retail Revenues
1,718,280

 
1,636,931

 
81,349

 
5.0

Tariff-based wholesale
261,375

 
265,360

 
(3,985
)
 
(1.5
)
Market-based wholesale
54,978

 
81,588

 
(26,610
)
 
(32.6
)
Transmission
193,797

 
154,569

 
39,228

 
25.4

Other
33,040

 
32,543

 
497

 
1.5

Total Revenues
$
2,261,470

 
$
2,170,991

 
$
90,479

 
4.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
6,684

 
6,986

 
(302
)
 
(4.3
)
Commercial
7,581

 
7,573

 
8

 
0.1

Industrial
5,588

 
5,589

 
(1
)
 
nm

Other retail
85

 
88

 
(3
)
 
(3.4
)
Total Retail
19,938

 
20,236

 
(298
)
 
(1.5
)
Tariff-based wholesale
5,643

 
5,883

 
(240
)
 
(4.1
)
Market-based wholesale
2,076

 
2,332

 
(256
)
 
(11.0
)
Total wholesale
7,719

 
8,215

 
(496
)
 
(6.0
)
Total Electricity Sales
27,657

 
28,451

 
(794
)
 
(2.8
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
86.18

 
$
80.89

 
$
5.29

 
6.5

Tariff-based wholesale
$
46.32

 
$
45.11

 
$
1.21

 
2.7

Market-based wholesale
$
26.48

 
$
34.99

 
$
(8.51
)
 
(24.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
489,268

 
$
556,771

 
$
(67,503
)
 
(12.1
)
Purchased power
103,902

 
91,851

 
12,051

 
13.1

Subtotal
593,170

 
648,622

 
(55,452
)
 
(8.5
)
RECA recovery and other
(3,180
)
 
(17,829
)
 
14,649

 
82.2

Total fuel and purchased power expense
$
589,990

 
$
630,793

 
$
(40,803
)
 
(6.5
)
 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
2,238

 
2,305

 
(67
)
 
(2.9
)
                    Coal
18,691

 
21,184

 
(2,493
)
 
(11.8
)
                    Nuclear
3,894

 
3,440

 
454

 
13.2

                    Wind
438

 
454

 
(16
)
 
(3.5
)
Subtotal electricity generated
25,261

 
27,383

 
(2,122
)
 
(7.7
)
Purchased
3,935

 
2,680

 
1,255

 
46.8

Total Electricity Supply
29,196

 
30,063

 
(867
)
 
(2.9
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
19.37

 
$
20.33

 
$
(0.96
)
 
(4.7
)
Average cost of purchased power
$
26.40

 
$
34.27

 
$
(7.87
)
 
(23.0
)
Average cost of fuel and purchased power
$
20.32

 
$
21.58

 
$
(1.26
)
 
(5.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2011/
 
 
 
 
 
2012
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
2,140

 
2,118

 
22

 
1.0

Actual compared to 20 year average
2,140

 
1,624

 
516

 
31.8

Heating
 
 
 
 
 
 
 
Actual compared to last year
3,688

 
4,801

 
(1,113
)
 
(23.2
)
Actual compared to 20 year average
3,688

 
4,678

 
(990
)
 
(21.2
)
nm - not meaningful
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 8




Westar Energy, Inc.
Capitalization
 
 
December 31, 2012
 
 
 
December 31, 2011
 
 
 
 
(Dollars in Thousands)
 
 
Current maturities of long-term debt of VIEs
 
$
25,942

 
 
 
28,114

 
 
Long-term debt, net
 
2,819,271

 
 
 
2,491,109

 
 
Long-term debt of variable interest entities, net
 
222,743

 
 
 
249,283

 
 
Total debt
 
3,067,956

 
51.4
%
 
2,768,506

 
49.7
%
Preferred
 
—

 
—
%
 
21,436

 
0.4
%
Common equity
 
2,896,140

 
48.4
%
 
2,769,211

 
49.7
%
Noncontrolling interests
 
14,115

 
0.2
%
 
10,094

 
0.2
%
Total capitalization
 
$
5,978,211

 
100.0
%
 
$
5,569,247

 
100.0
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
22.89

 
 
 
$
22.03

 


Period end shares outstanding (in thousands)
 
126,504

 
 
 
125,698

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
December 31, 2012
 
 
 
December 31, 2011
 
 
Westar Energy:
 
(Dollars in Thousands)
 
 
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

 
 
8.625% Series due December 2018
95709TAG5
300,000

 
 
 
300,000

 
 
4.125% Series due December 2042
95709TAH3
550,000

 
 
 
—

 
 
 
 
1,750,000

 
 
 
1,350,000

 
 
Pollution control bond series:
 
 
 
 
 
 
 
 
Variable series due April 2032 (St Marys)
792609AF6
45,000

 
 
 
45,000

 
 
Variable series due April 2032 (Wamego)
933623BN9
30,500

 
 
 
30,500

 
 
5.0% Series due February 2033 (Wamego)
933623BQ2
—

 
 
 
57,245

 
 
 
 
75,500

 
 
 
132,745

 
 
Total Westar Energy
 
1,825,500

 
 
 
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:
 
 
 
 
 
 
 
 
5.10% Series due March 2023
502828AH9
—

 
 
 
13,318

 
 
Variable rate series due April 2027 (LaCygne)
502828AJ5
21,940

 
 
 
21,940

 
 
5.3% Series due June 2031
121825BW2
108,600

 
 
 
108,600

 
 
5.3% Series due June 2031
933623BR0
18,900

 
 
 
18,900

 
 
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

 
 
4.85% Series due June 2031
121825CB7
50,000

 
 
 
50,000

 
 
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
 
2,824,440

 
 
 
2,495,003

 
 
Unamortized debt discount
 
(5,169
)
 
 
 
(3,894
)
 
 
Long-term debt due within one year
 
—

 
 
 
—

 
 
Total long-term debt, net
 
$
2,819,271

 
 
 
$
2,491,109

 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 9



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 the costs of fuel and purchased power. Fuel and purchased power costs for wholesale customers are recovered at prevailing market prices or based on a predetermined formula with a price adjustment approved by FERC. As a result, changes in fuel and purchased power costs are offset in revenues with minimal impact on net income. For this reason, Westar management believes that gross margin is useful for understanding and analyzing changes in operating performance from one period to the next. Gross margin is calculated as total revenues, including transmission revenues, less the sum of fuel and purchased power costs and amounts billed by the SPP for network transmission costs (SPP NITS). Accordingly, gross margin reflects transmission revenues and costs on a net basis. However, transmission costs are recorded as operating and maintenance expense on Westar's consolidated statements of income.

The calculations of gross margin and operating and maintenance expense w/o SPP NITS for the three and twelve months ended 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 December 31,
 
Twelve Months Ended December 31,
 
2012
 
2011
 
Change
 
2012
 
2011
 
Change
 
(Dollars in Thousands)
Revenues
523,772

 
486,228


37,544


2,261,470

 
2,170,991


90,479

Less: Fuel and purchased power expense
137,150

 
144,096

 
(6,946
)
 
589,990

 
630,793

 
(40,803
)
 SPP network transmission costs
42,405

 
33,541

 
8,864

 
166,547

 
132,164

 
34,383

Gross Margin
$
344,217

 
$
308,591


$
35,626


$
1,504,933

 
$
1,408,034


$
96,899

 
 
 
 
 
 
 
 
 
 
 
 
Gross margin
$
344,217

 
$
308,591

 
$
35,626

 
$
1,504,933

 
$
1,408,034

 
$
96,899

Add: SPP network transmission costs
42,405

 
33,541

 
8,864

 
166,547

 
132,164

 
34,383

Less: Operating and maintenance expense
151,356

 
145,323

 
6,033

 
612,871

 
557,752

 
55,119

Depreciation and amortization expense
65,823

 
71,771

 
(5,948
)
 
270,464

 
285,322

 
(14,858
)
Selling, general and administrative expense
61,668

 
52,463

 
9,205

 
226,012

 
184,695

 
41,317

Income from operations
$
107,775

 
$
72,575


$
35,200


$
562,133

 
$
512,429


$
49,704

 
 
 
 
 
 
 
 
 
 
 
 
Operating and maintenance expense
$
151,356

 
$
145,323

 
$
6,033

 
$
612,871

 
$
557,752

 
$
55,119

Less: SPP network transmission costs
42,405

 
33,541

 
8,864

 
166,547

 
132,164

 
34,383

Operating and maintenance expense w/o SPP NITS
$
108,951

 
$
111,782


$
(2,831
)

$
446,324

 
$
425,588


$
20,736

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 10






The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 11




The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2012 should be read in conjunction with this financial information.
Page 12
12.31.2012 8-K Exhibit 99.3


Exhibit 99.3

2013 Earnings Guidance

2013 earnings per share range     $2.00 - $2.15

Key planning assumptions for 2013:
•
50 to 100 bp increase in weather adjusted total retail sales
•
Transmission revenue increase ≈$18 million effective January
•
Includes companion retail TDC of ≈$9 million to be effective April
•
Combined O&M and SG&A ≈5% gross increase
•
Reflects ≈1% decrease for all items without revenue offsets (i.e., gross increase includes
≈$49 million increase for items with a revenue offset, such as SPP Transmission, property taxes, pension and tree trimming expenses)
•
Depreciation and amortization expense increase ≈$7 million
•
Annual adjustment to Environmental Cost Recovery Rider ≈$31 million effective June 1
•
Includes ≈$14 million of actuarially-assumed COLI proceeds
•
No change in equity AFUDC
•
Prairie Wind joint venture earnings increase ≈$4 million
•
Effective tax rate of approximately 31-33%
•
Funding 2013 construction program:
•
Primary source will be debt
•
Issuance of ≈2 million shares already priced under forward sale agreements

The effects of the key assumptions are not necessarily independent of one another, and the combination of effects can cause individual impacts smaller or larger than the ranges indicated.


Forward-looking statements: Certain matters discussed in this document 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 “assumption,” “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, 2012 (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; 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.


Feb. 28, 2013