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WR-03.31.2013-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) May 8, 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
 
66612
 
(785) 575-6300
(Address of principal executive offices)
 
(Zip Code)
 
(Registrant's telephone number, including area code)


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 8, 2013, we issued a press release announcing our earnings for the period ended March 31, 2013. A copy of our May 8, 2013 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2013 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 8, 2013
Exhibit 99.2    2013 First Quarter Earnings Package





EXHIBIT INDEX

Exhibit Number
 
Description of Exhibit
Exhibit 99.1
 
Press Release dated May 8, 2013
Exhibit 99.2
 
2013 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 8, 2013
 
By:
 
/s/ Larry D. Irick
 
 
 
 
Name:
 
Larry D. Irick
 
 
 
 
Title:
 
Vice President, General Counsel and Corporate Secretary



WR-03.31.2013-8-K Exhibit 99.1

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 1ST QUARTER 2013 RESULTS
TOPEKA, Kan., May 8, 2013 - Westar Energy, Inc. (NYSE:WR) today announced earnings of $51 million, or $0.40 per share, for the first quarter 2013 compared with earnings of $27 million, or $0.21 per share, for the first quarter 2012.
Higher net income for the quarter compared with last year, was driven primarily by higher revenues, largely as a result of price increases and higher energy sales primarily from colder weather. The increase in revenues was partially offset by higher operating costs, increased interest expense and having recorded corporate-owned life insurance proceeds last year.
Earnings Guidance
The company affirmed its 2013 earnings guidance of $2.00 to $2.15 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.
Conference Call and Additional Company Information
Westar Energy management will host a conference call Thursday, May 9 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

Westar Energy announces first quarter 2013 results                      Page 2 of 4

866-953-6859, participant code 30092045. 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 first quarter financial information, the company's quarterly report on Form 10-Q for the period ended Mar. 31, 2013 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 first quarter 2013 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; (2) those discussed in the company's Quarterly Report on Form 10-Q filed May 8, 2013, (a) in ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 10 and 11;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 first quarter 2013 results                      Page 4 of 4

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

 
Three Months Ended Mar. 31,
 
2013
 
2012
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
165,375

 
$
138,418

 
$
26,957

 
19.5

Commercial
147,956

 
129,651

 
18,305

 
14.1

Industrial
90,925

 
85,420

 
5,505

 
6.4

Other retail
(3,171
)
 
(2,920
)
 
(251
)
 
(8.6
)
Total Retail Revenues
401,085

 
350,569

 
50,516

 
14.4

Wholesale
86,469

 
71,212

 
15,257

 
21.4

Transmission
51,510

 
45,963

 
5,547

 
12.1

Other
7,148

 
7,933

 
(785
)
 
(9.9
)
Total Revenues
546,212

 
475,677

 
70,535

 
14.8

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
151,752

 
127,654

 
24,098

 
18.9

Operating and maintenance
158,729

 
156,044

 
2,685

 
1.7

Depreciation and amortization
66,846

 
73,280

 
(6,434
)
 
(8.8
)
Selling, general and administrative
48,945

 
47,334

 
1,611

 
3.4

Total Operating Expenses
426,272

 
404,312

 
21,960

 
5.4

INCOME FROM OPERATIONS
119,940

 
71,365

 
48,575

 
68.1

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
4,059

 
4,324

 
(265
)
 
(6.1
)
Other income
3,715

 
13,590

 
(9,875
)
 
(72.7
)
Other expense
(5,361
)
 
(5,553
)
 
192

 
3.5

Total Other Income
2,413

 
12,361

 
(9,948
)
 
(80.5
)
Interest expense
44,284

 
42,046

 
2,238

 
5.3

INCOME BEFORE INCOME TAXES
78,069

 
41,680

 
36,389

 
87.3

Income tax expense
24,813

 
12,443

 
12,370

 
99.4

NET INCOME
53,256

 
29,237

 
24,019

 
82.2

Less: Net income attributable to noncontrolling interests
2,112

 
1,713

 
399

 
23.3

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
51,144

 
27,524

 
23,620

 
85.8

Preferred dividends
—

 
242

 
(242
)
 
(100.0
)
NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
51,144

 
$
27,282

 
$
23,862

 
87.5

Earnings per common share, basic
$
0.40

 
$
0.21

 
$
0.19

 
90.5

Average equivalent common shares outstanding
127,196

 
126,495

 
701

 
0.6

DIVIDENDS DECLARED PER COMMON SHARE
$
0.34

 
$
0.33

 
$
0.01

 
3.0

Effective income tax rate
31.78
%
 
29.85
%
 
 
 
 
 
 
 
 
 
 
 
 


WR-03.31.2013-8-K Exhibit 99.2


Exhibit 99.2
Westar Energy, Inc.
First Quarter 2013 Earnings
Released May 8, 2013





Contents
Page
 
 














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, 2013 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,
 
2013
 
2012
 
Change
 
% Change
 
(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
165,375

 
$
138,418

 
$
26,957

 
19.5

Commercial
147,956

 
129,651

 
18,305

 
14.1

Industrial
90,925

 
85,420

 
5,505

 
6.4

Other retail
(3,171
)
 
(2,920
)
 
(251
)
 
(8.6
)
Total Retail Revenues
401,085

 
350,569

 
50,516

 
14.4

Wholesale
86,469

 
71,212

 
15,257

 
21.4

Transmission
51,510

 
45,963

 
5,547

 
12.1

Other
7,148

 
7,933

 
(785
)
 
(9.9
)
Total Revenues
546,212

 
475,677

 
70,535

 
14.8

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
151,752

 
127,654

 
24,098

 
18.9

Operating and maintenance
158,729

 
156,044

 
2,685

 
1.7

Depreciation and amortization
66,846

 
73,280

 
(6,434
)
 
(8.8
)
Selling, general and administrative
48,945

 
47,334

 
1,611

 
3.4

Total Operating Expenses
426,272

 
404,312

 
21,960

 
5.4

INCOME FROM OPERATIONS
119,940

 
71,365

 
48,575

 
68.1

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
4,059

 
4,324

 
(265
)
 
(6.1
)
Other income
3,715

 
13,590

 
(9,875
)
 
(72.7
)
Other expense
(5,361
)
 
(5,553
)
 
192

 
3.5

Total Other Income
2,413

 
12,361

 
(9,948
)
 
(80.5
)
Interest expense
44,284

 
42,046

 
2,238

 
5.3

INCOME BEFORE INCOME TAXES
78,069

 
41,680

 
36,389

 
87.3

Income tax expense
24,813

 
12,443

 
12,370

 
99.4

NET INCOME
53,256

 
29,237

 
24,019

 
82.2

Less: Net income attributable to noncontrolling interests
2,112

 
1,713

 
399

 
23.3

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
51,144

 
27,524

 
23,620

 
85.8

Preferred dividends
—

 
242

 
(242
)
 
(100.0
)
NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
51,144

 
$
27,282

 
$
23,862

 
87.5

Earnings per common share, basic
$
0.40

 
$
0.21

 
$
0.19

 
90.5

Average equivalent common shares outstanding, basic
127,196

 
126,495

 
701

 
0.6

DIVIDENDS DECLARED PER COMMON SHARE
$
0.34

 
$
0.33

 
$
0.01

 
3.0

Effective income tax rate
31.78
%
 
29.85
%
 
 
 
 
 
 
 
 
 
 
 
 




The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 1


Westar Energy, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except Par Values)
(Unaudited)

 
March 31, 2013
 
December 31, 2012
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
5,643

 
$
5,829

Restricted cash
513

 
573

Accounts receivable, net of allowance for doubtful accounts of $6,353 and $4,916, respectively
226,250

 
224,439

Fuel inventory and supplies
236,991

 
249,016

Prepaid expenses
18,046

 
15,847

Regulatory assets
111,555

 
114,895

Other
24,680

 
32,476

Total Current Assets
623,678

 
643,075

PROPERTY, PLANT AND EQUIPMENT, NET
7,115,482

 
7,013,765

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
319,095

 
321,975

OTHER ASSETS:
 
 
 
Regulatory assets
903,472

 
887,777

Nuclear decommissioning trust
160,869

 
150,754

Other
267,888

 
247,885

Total Other Assets
1,332,229

 
1,286,416

TOTAL ASSETS
$
9,390,484

 
$
9,265,231

LIABILITIES AND EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current maturities of long-term debt of variable interest entities
$
27,721

 
$
25,942

Short-term debt
143,065

 
339,200

Accounts payable
199,196

 
180,825

Accrued dividends
43,109

 
41,743

Accrued taxes
89,868

 
58,624

Accrued interest
88,076

 
77,891

Regulatory liabilities
43,413

 
37,557

Other
91,801

 
84,359

Total Current Liabilities
726,249

 
846,141

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
3,068,481

 
2,819,271

Long-term debt of variable interest entities, net
195,472

 
222,743

Deferred income taxes
1,207,234

 
1,197,837

Unamortized investment tax credits
190,722

 
191,512

Regulatory liabilities
290,184

 
285,618

Accrued employee benefits
559,839

 
564,870

Asset retirement obligations
154,667

 
152,648

Other
74,014

 
74,336

Total Long-Term Liabilities
5,740,613

 
5,508,835

COMMITMENTS AND CONTINGENCIES (See Notes 10 and 11)
 
 
 
EQUITY:
 
 
 
Westar Energy, Inc. Shareholders’ Equity:
 
 
 
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 126,801,458 shares and 126,503,748 shares, respective to each date
634,007

 
632,519

Paid-in capital
1,659,271

 
1,656,972

Retained earnings
614,118

 
606,649

Total Westar Energy, Inc. Shareholders’ Equity
2,907,396

 
2,896,140

Noncontrolling Interests
16,226

 
14,115

Total Equity
2,923,622

 
2,910,255

TOTAL LIABILITIES AND EQUITY
$
9,390,484

 
$
9,265,231



The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 2


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

 
Three Months Ended March 31,
 
2013
 
2012
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
53,256

 
$
29,237

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
66,846

 
73,280

Amortization of nuclear fuel
2,857

 
1,378

Amortization of deferred regulatory gain from sale leaseback
(1,374
)
 
(1,374
)
Amortization of corporate-owned life insurance
3,522

 
7,375

Non-cash compensation
2,221

 
2,028

Net deferred income taxes and credits
22,387

 
3,958

Stock-based compensation excess tax benefits
(202
)
 
(1,381
)
Allowance for equity funds used during construction
(2,746
)
 
(3,940
)
Changes in working capital items:
 
 
 
Accounts receivable
(2,313
)
 
28,603

Fuel inventory and supplies
12,180

 
(25,294
)
Prepaid expenses and other
7,641

 
(7,395
)
Accounts payable
28,214

 
(5,453
)
Accrued taxes
31,431

 
34,047

Other current liabilities
(7,251
)
 
(7,843
)
Changes in other assets
(31,259
)
 
(40,643
)
Changes in other liabilities
8,224

 
(22,620
)
Cash Flows from Operating Activities
193,634

 
63,963

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(181,987
)
 
(189,966
)
Purchase of securities within trusts
(32,582
)
 
(7,160
)
Sale of securities within trusts
33,305

 
8,023

Proceeds from trust
498

 
—

Proceeds from investment in corporate-owned life insurance
79,508

 
16,177

Proceeds from federal grant
876

 
2,461

Investment in affiliated company
—

 
(2,502
)
Other investing activities
(258
)
 
(1,031
)
Cash Flows used in Investing Activities
(100,640
)
 
(173,998
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
(196,318
)
 
(4,633
)
Proceeds from long-term debt
246,179

 
246,656

Retirements of long-term debt
—

 
(70,563
)
Retirements of long-term debt of variable interest entities
(25,368
)
 
(5,088
)
Repayment of capital leases
(802
)
 
(614
)
Borrowings against cash surrender value of corporate-owned life insurance
—

 
1,074

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(78,655
)
 
(18,131
)
Stock-based compensation excess tax benefits
202

 
1,381

Issuance of common stock
1,546

 
1,811

Distributions to shareholders of noncontrolling interests
—

 
(2,787
)
Cash dividends paid
(39,964
)
 
(38,884
)
Cash Flows (used in) from Financing Activities
(93,180
)
 
110,222

NET CHANGE IN CASH AND CASH EQUIVALENTS
(186
)
 
187

CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
5,829

 
3,539

End of period
$
5,643

 
$
3,726


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 3



Westar Energy, Inc.
1st Quarter 2013 vs. 2012

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2012 earnings attributable to common stock
 
 
 
$
27,282

 
 
 
$
0.21

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
50,516

 
A
 
 
 
Wholesale
 
 
 
15,257

 
B
 
 
 
Transmission
 
 
 
5,547

 
 
 
 
 
Other revenues
 
 
 
(785
)
 
 
 
 
 
Fuel and purchased power
 
 
 
(24,098
)
 
C
 
 
 
SPP network transmission costs
 
 
 
(4,434
)
 
 
 
 
 
Gross Margin
 
 
 
42,003

 
 
 
 
 
Operating and maintenance w/o SPP NITS
 
 
 
1,749

 
D
 
 
 
Depreciation and amortization
 
 
 
6,434

 
E
 
 
 
Selling, general and administrative
 
 
 
(1,611
)
 
F
 
 
 
Other income (expense)
 
 
 
(9,948
)
 
G
 
 
 
Interest expense
 
 
 
(2,238
)
 
 
 
 
 
Income tax expense
 
 
 
(12,370
)
 
H
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(399
)
 
 
 
 
 
Preferred dividends
 
 
 
242

 
 
 
 
 
Change in shares outstanding
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 earnings attributable to common stock
 
 
 
$
51,144

 
 
 
$
0.40

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due to increased average retail prices; retail MWh sales increased 3% (see page 5 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due to 21% increase in MWh sales (see page 5 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due primarily to increased MWhs generated offset by reduced MWhs purchased
 
 
 
 
 
 
 
 
 
 
D
Due principally to decreased unplanned outage expense at Wolf Creek -- $6.6M; increased property tax expense (this is largely offset in revenues through property tax surcharge) -- ($5.2M)
 
 
 
 
 
 
 
 
 
 
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 costs -- ($9.1M); lower other employee and benefit costs -- $7.0M
 
 
 
 
 
 
 
 
 
 
G
Due primarily to recording in 2012 COLI proceeds -- ($9.2 M)
 
 
 
 
 
 
 
 
 
 
H
Due primarily to higher income before income taxes

 
 
 
 
 
 
 
 
 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 4



Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Three Months Ended March 31,
 
2013
 
2012
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
165,375

 
$
138,418

 
$
26,957

 
19.5

Commercial
147,956

 
129,651

 
18,305

 
14.1

Industrial
90,925

 
85,420

 
5,505

 
6.4

Other retail
3,198

 
3,054

 
144

 
4.7

Provision for rate refunds
(6,369
)
 
(5,974
)
 
(395
)
 
(6.6
)
Total Retail Revenues
401,085

 
350,569

 
50,516

 
14.4

Tariff-based wholesale
71,749

 
62,532

 
9,217

 
14.7

Market-based wholesale
14,720

 
8,680

 
6,040

 
69.6

Transmission
51,510

 
45,963

 
5,547

 
12.1

Other
7,148

 
7,933

 
(785
)
 
(9.9
)
Total Revenues
$
546,212

 
$
475,677

 
$
70,535

 
14.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
1,543

 
1,415

 
128

 
9.0

Commercial
1,703

 
1,649

 
54

 
3.3

Industrial
1,312

 
1,361

 
(49
)
 
(3.6
)
Other retail
21

 
21

 
—

 
—

Total Retail
4,579

 
4,446

 
133

 
3.0

Tariff-based wholesale
1,479

 
1,349

 
130

 
9.6

Market-based wholesale
566

 
344

 
222

 
64.5

Total wholesale
2,045

 
1,693

 
352

 
20.8

Total Electricity Sales
6,624

 
6,139

 
485

 
7.9

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
87.59

 
$
78.85

 
$
8.74

 
11.1

Tariff-based wholesale
$
48.51

 
$
46.35

 
$
2.16

 
4.7

Market-based wholesale
$
26.01

 
$
25.23

 
$
0.78

 
3.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
127,653

 
$
99,635

 
$
28,018

 
28.1

Purchased power
29,016

 
37,410

 
(8,394
)
 
(22.4
)
Subtotal
156,669

 
137,045

 
19,624

 
14.3

RECA recovery and other
(4,917
)
 
(9,391
)
 
4,474

 
47.6

Total fuel and purchased power expense
$
151,752

 
$
127,654

 
$
24,098

 
18.9

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
350

 
453

 
(103
)
 
(22.7
)
                    Coal
5,185

 
4,129

 
1,056

 
25.6

                    Nuclear
454

 
201

 
253

 
125.9

                    Wind
104

 
125

 
(21
)
 
(16.8
)
Subtotal electricity generated
6,093

 
4,908

 
1,185

 
24.1

Purchased
857

 
1,571

 
(714
)
 
(45.4
)
Total Electricity Supply
6,950

 
6,479

 
471

 
7.3

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
20.95

 
$
20.30

 
$
0.65

 
3.2

Average cost of purchased power
$
33.86

 
$
23.81

 
$
10.05

 
42.2

Average cost of fuel and purchased power
$
22.54

 
$
21.15

 
$
1.39

 
6.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2011/
 
 
 
 
 
2013
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
—

 
45

 
(45
)
 
(100.0
)
Actual compared to 20 year average
—

 
2

 
(2
)
 
(100.0
)
Heating
 
 
 
 
 
 
 
Actual compared to last year
2,511

 
1,825

 
686

 
37.6

Actual compared to 20 year average
2,511

 
2,428

 
83

 
3.4


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 5


Westar Energy, Inc.
Capitalization
 
 
March 31, 2013
 
 
 
December 31, 2012
 
 
 
 
(Dollars in Thousands)
 
 
Current maturities of long-term debt of VIEs
 
$
27,721

 
 
 
$
25,942

 
 
Long-term debt, net
 
3,068,481

 
 
 
2,819,271

 
 
Long-term debt of variable interest entities, net
 
195,472

 
 
 
222,743

 
 
Total long-term debt
 
3,291,674

 
52.9
%
 
3,067,956

 
51.4
%
Common equity
 
2,907,396

 
46.8
%
 
2,896,140

 
48.4
%
Noncontrolling interests
 
16,226

 
0.3
%
 
14,115

 
0.2
%
Total capitalization
 
$
6,215,296

 
100.0
%
 
$
5,978,211

 
100.0
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
22.93

 
 
 
$
22.89

 


Period end shares outstanding (in thousands)
 
126,801

 
 
 
126,504

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
March 31, 2013
 
 
 
December 31, 2012
 
 
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

 
 
8.625% Series due December 2018
95709TAG5
300,000

 
 
 
300,000

 
 
4.125% Series due March 2042
95709TAH3
550,000

 
 
 
550,000

 
 
4.10% Series due April 2043
95709TAJ9
250,000

 
 
 
—

 
 
 
 
2,000,000

 
 
 
1,750,000

 
 
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

 
 
 
 
75,500

 
 
 
75,500

 
 
Total Westar Energy
 
2,075,500

 
 
 
1,825,500

 
 
 
 
 
 
 
 
 
 
 
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:
 
 
 
 
 
 
 
 
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

 
 
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

 
 
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

 
 
 
 
373,940

 
 

373,940

 
 
Total KGE
 
998,940

 
 
 
998,940

 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
 
3,074,440

 
 
 
2,824,440

 
 
Unamortized debt discount
 
(5,959
)
 
 
 
(5,169
)
 
 
Long-term debt due within one year
 
—

 
 
 
—

 
 
Total long-term debt, net
 
$
3,068,481

 
 
 
$
2,819,271

 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 6



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 months ended March 31, 2013 and 2012 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,
 
2013
 
2012
 
Change
 
(Dollars in Thousands)
Revenues
 
 
 
 
 
Residential
$
165,375

 
$
138,418

 
$
26,957

Commercial
147,956

 
129,651

 
18,305

Industrial
90,925

 
85,420

 
5,505

Other retail
(3,171
)
 
(2,920
)
 
(251
)
Total Retail Revenues
401,085

 
350,569

 
50,516

Wholesale
86,469

 
71,212

 
15,257

Transmission
51,510

 
45,963

 
5,547

Other
7,148

 
7,933

 
(785
)
Total Revenues
546,212

 
475,677


70,535

Less: Fuel and purchased power expense
151,752

 
127,654

 
24,098

 SPP network transmission costs
43,796

 
39,362

 
4,434

Gross Margin
$
350,664


$
308,661


$
42,003

 
 
 
 
 
 
Gross margin
$
350,664

 
$
308,661

 
$
42,003

Add: SPP network transmission costs
43,796

 
39,362

 
4,434

Less: Operating and maintenance expense
158,729

 
156,044

 
2,685

Depreciation and amortization expense
66,846

 
73,280

 
(6,434
)
Selling, general and administrative expense
48,945

 
47,334

 
1,611

Income from operations
$
119,940

 
$
71,365


$
48,575

 
 
 
 
 
 
 
 
 
 
 
 
Operating and maintenance expense
$
158,729

 
$
156,044

 
$
2,685

Less: SPP network transmission costs
43,796

 
39,362

 
4,434

Operating and maintenance expense w/o SPP NITS
$
114,933

 
$
116,682


$
(1,749
)
 
 
 
 
 
 
 
 
 
 
 
 


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2013 should be read in conjunction with this financial information.
Page 7