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WR_6.30.2014-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) August 6, 2014

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 August 6, 2014, we issued a press release announcing our earnings for the period ended June 30, 2014. A copy of our August 6, 2014 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2014 Second 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 August 6, 2014
Exhibit 99.2
2014 Second Quarter Earnings package and 2014 Earnings Guidance August Update





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:
 
August 6, 2014
 
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 August 6, 2014
Exhibit 99.2
 
2014 Second Quarter Earnings package and 2014 Earnings Guidance August Update



WR-06.30.2014-8-K Exhibit 99.1
Exhibit 99.1


Westar Energy announces 2nd quarter 2014 results.
TOPEKA, Kan., Aug. 6, 2014 - Westar Energy, Inc. (NYSE:WR) today announced earnings of $53 million, or $0.41 per share, for the second quarter 2014 compared with earnings of $67 million, or $0.53 per share, for the second quarter 2013. Without COLI proceeds, second quarter 2013 earnings would have been $57 million or $0.45 per share. Earnings for the six months ended June 30, 2014 were $122 million, or $0.95 per share, compared with $118 million, or $0.93 per share, for the same period in 2013. Without COLI proceeds, the first half of 2013 earnings would have been $108 million or $0.86 per share.

Lower net income for the three months ended June 30, 2014 was driven largely by no corporate-owned life insurance proceeds and higher planned maintenance costs for the generating fleet. These factors were partially offset by higher revenues for the quarter.
    
Higher net income for the six months ended June 30, 2014 was largely driven by higher revenues. The higher revenues are due principally from higher energy sales from colder weather in the first quarter and higher prices resulting from investments in air quality controls and transmission infrastructure.

Earnings Guidance

The company affirmed its 2014 earnings guidance of $2.30 to $2.45 per share. The earnings guidance drivers are located under Supplemental Materials within the investor section of the company website at www.WestarEnergy.com.

Conference Call and Additional Company Information

Westar Energy management will host a conference call Thursday, Aug. 7 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 866-318-8620, participant code 77563283. 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 second quarter financial information, the company's quarterly report on Form 10-Q for the period ended June 30, 2014 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 NEWS RELEASE    Page 1 of 3
Westar Energy announces 2nd quarter results

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, digital meters 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, 2013 (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 Aug. 6, 2014, (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.


Media Contact:
Gina Penzig
Director, corporate communications
Phone: 785-575-8089
Gina.Penzig@westarenergy.com
Media line: 888-613-0003

Investor Contact:
Bruce Burns
Director, investor relations
Phone: 785-575-8227
Bruce.Burns@westarenergy.com


WESTAR ENERGY NEWS RELEASE    Page 2 of 3
Westar Energy announces 2nd quarter results

Westar Energy, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
 
Three Months Ended Jun. 30,
 
Six Months Ended Jun. 30,
 
2014
 
2013
 
Change
 
% Change
 
2014
 
2013
 
Change
 
% Change
 
(Dollars In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
$
175,671

 
$
165,302

 
$
10,369

 
6.3

 
$
367,958

 
$
330,678

 
$
37,280

 
11.3

Commercial
178,194

 
165,172

 
13,022

 
7.9

 
339,294

 
313,128

 
26,166

 
8.4

Industrial
106,984

 
92,820

 
14,164

 
15.3

 
201,480

 
183,745

 
17,735

 
9.7

Other retail
(3,033
)
 
2,228

 
(5,261
)
 
(236.1
)
 
(11,557
)
 
(944
)
 
(10,613
)
 
(a)

Total Retail Revenues
457,816

 
425,522

 
32,294

 
7.6

 
897,175

 
826,607

 
70,568

 
8.5

Wholesale
82,434

 
81,783

 
651

 
0.8

 
193,047

 
168,253

 
24,794

 
14.7

Transmission
63,700

 
52,804

 
10,896

 
20.6

 
125,166

 
104,315

 
20,851

 
20.0

Other
8,718

 
9,480

 
(762
)
 
(8.0
)
 
25,836

 
16,626

 
9,210

 
55.4

Total Revenues
612,668

 
569,589

 
43,079

 
7.6

 
1,241,224

 
1,115,801

 
125,423

 
11.2

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Fuel and purchased power
164,779

 
152,700

 
12,079

 
7.9

 
338,618

 
304,452

 
34,166

 
11.2

SPP network transmission costs
55,533

 
44,600

 
10,933

 
24.5

 
107,491

 
88,396

 
19,095

 
21.6

Operating and maintenance
101,839

 
87,999

 
13,840

 
15.7

 
193,629

 
172,154

 
21,475

 
12.5

Depreciation and amortization
70,882

 
67,597

 
3,285

 
4.9

 
140,992

 
134,443

 
6,549

 
4.9

Selling, general and administrative
62,168

 
54,477

 
7,691

 
14.1

 
118,653

 
103,422

 
15,231

 
14.7

Taxes other than income tax
34,738

 
30,704

 
4,034

 
13.1

 
69,571

 
61,482

 
8,089

 
13.2

Total Operating Expenses
489,939

 
438,077

 
51,862

 
11.8

 
968,954

 
864,349

 
104,605

 
12.1

INCOME FROM OPERATIONS
122,729

 
131,512

 
(8,783
)
 
(6.7
)
 
272,270

 
251,452

 
20,818

 
8.3

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Investment earnings
3,175

 
1,690

 
1,485

 
87.9

 
5,553

 
5,749

 
(196
)
 
(3.4
)
Other income
5,658

 
13,711

 
(8,053
)
 
(58.7
)
 
11,575

 
17,427

 
(5,852
)
 
(33.6
)
Other expense
(2,287
)
 
(2,354
)
 
67

 
2.8

 
(7,952
)
 
(7,715
)
 
(237
)
 
(3.1
)
Total Other Income
6,546

 
13,047

 
(6,501
)
 
(49.8
)
 
9,176

 
15,461

 
(6,285
)
 
(40.7
)
Interest expense
47,303

 
45,798

 
1,505

 
3.3

 
93,543

 
90,082

 
3,461

 
3.8

INCOME BEFORE INCOME TAXES
81,972

 
98,761

 
(16,789
)
 
(17.0
)
 
187,903

 
176,831

 
11,072

 
6.3

Income tax expense
26,150

 
29,310

 
(3,160
)
 
(10.8
)
 
61,111

 
54,123

 
6,988

 
12.9

NET INCOME
55,822

 
69,451

 
(13,629
)
 
(19.6
)
 
126,792

 
122,708

 
4,084

 
3.3

Less: Net income attributable to noncontrolling interests
2,349

 
2,263

 
86

 
3.8

 
4,365

 
4,375

 
(10
)
 
(0.2
)
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
53,473

 
$
67,188

 
$
(13,715
)
 
(20.4
)
 
$
122,427

 
$
118,333

 
$
4,094

 
3.5

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share
$
0.41

 
$
0.53

 
$
(0.12
)
 
(22.6
)
 
$
0.95

 
$
0.93

 
$
0.02

 
2.2

Diluted earnings per common share
$
0.40

 
$
0.52

 
$
(0.12
)
 
(23.1
)
 
$
0.93

 
$
0.92

 
$
0.01

 
1.1

AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
129,363

 
127,311

 
2,052

 
1.6

 
129,185

 
127,254

 
1,931

 
1.5

Diluted
131,973

 
127,930

 
4,043

 
3.2

 
131,779

 
127,735

 
4,044

 
3.2

DIVIDENDS DECLARED PER COMMON SHARE
$
0.35

 
$
0.34

 
$
0.01

 
2.9

 
$
0.70

 
$
0.68

 
$
0.02

 
2.9

Effective income tax rate
31.90
%
 
29.68
%
 
 
 
 
 
32.52
%
 
30.61
%
 
 
 
 
(a) Change greater than 1,000%.

WESTAR ENERGY NEWS RELEASE    Page 3 of 3
WR-06.30.2014-8-K Exhibit 99.2


Exhibit 99.2
Westar Energy, Inc.
Second Quarter 2014 Earnings
Released August 6, 2014





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 June 30, 2014 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.
Condensed Consolidated Statements of Income
(Unaudited)

 
Three Months Ended June 30,
 
2014
 
2013
 
Change
 
% Change
 
(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
175,671

 
$
165,302

 
$
10,369

 
6.3

Commercial
178,194

 
165,172

 
13,022

 
7.9

Industrial
106,984

 
92,820

 
14,164

 
15.3

Other retail
(3,033
)
 
2,228

 
(5,261
)
 
(236.1
)
Total Retail Revenues
457,816

 
425,522

 
32,294

 
7.6

Wholesale
82,434

 
81,783

 
651

 
0.8

Transmission
63,700

 
52,804

 
10,896

 
20.6

Other
8,718

 
9,480

 
(762
)
 
(8.0
)
Total Revenues
612,668

 
569,589

 
43,079

 
7.6

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
164,779

 
152,700

 
12,079

 
7.9

SPP network transmission costs
55,533

 
44,600

 
10,933

 
24.5

Operating and maintenance
101,839

 
87,999

 
13,840

 
15.7

Depreciation and amortization
70,882

 
67,597

 
3,285

 
4.9

Selling, general and administrative
62,168

 
54,477

 
7,691

 
14.1

Taxes other than income tax
34,738

 
30,704

 
4,034

 
13.1

Total Operating Expenses
489,939

 
438,077

 
51,862

 
11.8

INCOME FROM OPERATIONS
122,729

 
131,512

 
(8,783
)
 
(6.7
)
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
3,175

 
1,690

 
1,485

 
87.9

Other income
5,658

 
13,711

 
(8,053
)
 
(58.7
)
Other expense
(2,287
)
 
(2,354
)
 
67

 
2.8

Total Other Income
6,546

 
13,047

 
(6,501
)
 
(49.8
)
Interest expense
47,303

 
45,798

 
1,505

 
3.3

INCOME BEFORE INCOME TAXES
81,972

 
98,761

 
(16,789
)
 
(17.0
)
Income tax expense
26,150

 
29,310

 
(3,160
)
 
(10.8
)
NET INCOME
55,822

 
69,451

 
(13,629
)
 
(19.6
)
Less: Net income attributable to noncontrolling interests
2,349

 
2,263

 
86

 
3.8

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
53,473

 
$
67,188

 
$
(13,715
)
 
(20.4
)
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.41

 
$
0.53

 
$
(0.12
)
 
(22.6
)
Diluted earnings per common share
$
0.40

 
$
0.52

 
$
(0.12
)
 
(23.1
)
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
129,363

 
127,311

 
2,052

 
1.6

Diluted
131,973

 
127,930

 
4,043

 
3.2

DIVIDENDS DECLARED PER COMMON SHARE
$
0.35

 
$
0.34

 
$
0.01

 
2.9

Effective income tax rate
31.90
%
 
29.68
%
 
 
 
 
 
 
 
 
 
 
 
 






The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 1


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

 
Six Months Ended June 30,
 
2014
 
2013
 
Change
 
% Change
 
(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
367,958

 
$
330,678

 
$
37,280

 
11.3

Commercial
339,294

 
313,128

 
26,166

 
8.4

Industrial
201,480

 
183,745

 
17,735

 
9.7

Other retail
(11,557
)
 
(944
)
 
(10,613
)
 
(a)

Total Retail Revenues
897,175

 
826,607

 
70,568

 
8.5

Wholesale
193,047

 
168,253

 
24,794

 
14.7

Transmission
125,166

 
104,315

 
20,851

 
20.0

Other
25,836

 
16,626

 
9,210

 
55.4

Total Revenues
1,241,224

 
1,115,801

 
125,423

 
11.2

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
338,618

 
304,452

 
34,166

 
11.2

SPP network transmission costs
107,491

 
88,396

 
19,095

 
21.6

Operating and maintenance
193,629

 
172,154

 
21,475

 
12.5

Depreciation and amortization
140,992

 
134,443

 
6,549

 
4.9

Selling, general and administrative
118,653

 
103,422

 
15,231

 
14.7

Taxes other than income tax
69,571

 
61,482

 
8,089

 
13.2

Total Operating Expenses
968,954

 
864,349

 
104,605

 
12.1

INCOME FROM OPERATIONS
272,270

 
251,452

 
20,818

 
8.3

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
5,553

 
5,749

 
(196
)
 
(3.4
)
Other income
11,575

 
17,427

 
(5,852
)
 
(33.6
)
Other expense
(7,952
)
 
(7,715
)
 
(237
)
 
(3.1
)
Total Other Income
9,176

 
15,461

 
(6,285
)
 
(40.7
)
Interest expense
93,543

 
90,082

 
3,461

 
3.8

INCOME BEFORE INCOME TAXES
187,903

 
176,831

 
11,072

 
6.3

Income tax expense
61,111

 
54,123

 
6,988

 
12.9

NET INCOME
126,792

 
122,708

 
4,084

 
3.3

Less: Net income attributable to noncontrolling interests
4,365

 
4,375

 
(10
)
 
(0.2
)
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
122,427

 
$
118,333

 
$
4,094

 
3.5

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.95

 
$
0.93

 
$
0.02

 
2.2

Diluted earnings per common share
$
0.93

 
$
0.92

 
$
0.01

 
1.1

AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
129,185

 
127,254

 
1,931

 
1.5

Diluted
131,779

 
127,735

 
4,044

 
3.2

DIVIDENDS DECLARED PER COMMON SHARE
$
0.70

 
$
0.68

 
$
0.02

 
2.9

Effective income tax rate
32.52
%
 
30.61
%
 
 
 
 
 
 
 
 
 
 
 
 

(a) Change greater than 1,000%.

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 2


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

 
June 30, 2014
 
December 31, 2013
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
10,751

 
$
4,487

Accounts receivable, net of allowance for doubtful accounts of $4,503 and $4,596, respectively
259,205

 
250,036

Fuel inventory and supplies
256,521

 
239,511

Deferred tax assets
41,878

 
37,954

Prepaid expenses
18,058

 
15,821

Regulatory assets
136,809

 
135,408

Other
24,931

 
23,608

Total Current Assets
748,153

 
706,825

PROPERTY, PLANT AND EQUIPMENT, NET
7,816,120

 
7,551,916

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
291,253

 
296,626

OTHER ASSETS:
 
 
 
Regulatory assets
599,721

 
620,006

Nuclear decommissioning trust
185,896

 
175,625

Other
230,099

 
246,140

Total Other Assets
1,015,716

 
1,041,771

TOTAL ASSETS
$
9,871,242

 
$
9,597,138

LIABILITIES AND EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current maturities of long-term debt
$
—

 
$
250,000

Current maturities of long-term debt of variable interest entities
28,098

 
27,479

Short-term debt
343,300

 
134,600

Accounts payable
171,162

 
233,351

Accrued dividends
45,182

 
43,604

Accrued taxes
76,592

 
69,769

Accrued interest
55,556

 
80,457

Regulatory liabilities
54,185

 
35,982

Other
85,579

 
80,184

Total Current Liabilities
859,654

 
955,426

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
3,215,805

 
2,968,958

Long-term debt of variable interest entities, net
166,720

 
194,802

Deferred income taxes
1,423,021

 
1,363,148

Unamortized investment tax credits
190,702

 
192,265

Regulatory liabilities
307,053

 
293,574

Accrued employee benefits
325,449

 
331,558

Asset retirement obligations
177,755

 
160,682

Other
74,140

 
68,194

Total Long-Term Liabilities
5,880,645

 
5,573,181

COMMITMENTS AND CONTINGENCIES (See 10-Q 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 129,272,835 shares and 128,254,229 shares, respective to each date
646,364

 
641,271

Paid-in capital
1,718,017

 
1,696,727

Retained earnings
756,442

 
724,776

Total Westar Energy, Inc. Shareholders’ Equity
3,120,823

 
3,062,774

Noncontrolling Interests
10,120

 
5,757

Total Equity
3,130,943

 
3,068,531

TOTAL LIABILITIES AND EQUITY
$
9,871,242

 
$
9,597,138


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 3


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

 
Six Months Ended June 30,
 
2014
 
2013
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
126,792

 
$
122,708

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
140,992

 
134,443

Amortization of nuclear fuel
10,304

 
8,631

Amortization of deferred regulatory gain from sale leaseback
(2,748
)
 
(2,748
)
Amortization of corporate-owned life insurance
8,712

 
4,138

Non-cash compensation
3,945

 
4,146

Net deferred income taxes and credits
58,097

 
45,409

Stock-based compensation excess tax benefits
544

 
(399
)
Allowance for equity funds used during construction
(9,718
)
 
(5,689
)
Changes in working capital items:
 
 
 
Accounts receivable
(10,586
)
 
(15,271
)
Fuel inventory and supplies
(16,248
)
 
11,780

Prepaid expenses and other
(4,891
)
 
2,396

Accounts payable
(16,199
)
 
(24,838
)
Accrued taxes
8,293

 
16,196

Other current liabilities
(32,477
)
 
(58,624
)
Changes in other assets
1,828

 
(28,048
)
Changes in other liabilities
16,674

 
17,080

Cash Flows from Operating Activities
283,314

 
231,310

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(427,124
)
 
(398,998
)
Purchase of securities - trusts
(4,410
)
 
(59,986
)
Sale of securities - trusts
5,552

 
75,475

Investment in corporate-owned life insurance
(15,903
)
 
(17,408
)
Proceeds from investment in corporate-owned life insurance
1,773

 
101,085

Proceeds from federal grant
—

 
876

Investment in affiliated company
1,418

 
—

Other investing activities
(1,544
)
 
(2,362
)
Cash Flows used in Investing Activities
(440,238
)
 
(301,318
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
208,533

 
70,617

Proceeds from long-term debt
171,785

 
245,813

Retirements of long-term debt
(177,500
)
 
(100,000
)
Retirements of long-term debt of variable interest entities
(27,305
)
 
(25,474
)
Repayment of capital leases
(1,628
)
 
(1,539
)
Borrowings against cash surrender value of corporate-owned life insurance
56,577

 
57,948

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(1,123
)
 
(100,060
)
Stock-based compensation excess tax benefits
(544
)
 
399

Issuance of common stock
20,699

 
2,992

Distributions to shareholders of noncontrolling interests
—

 
(1,658
)
Cash dividends paid
(84,419
)
 
(80,886
)
Other financing activities
(1,887
)
 
—

Cash Flows from Financing Activities
163,188

 
68,152

NET CHANGE IN CASH AND CASH EQUIVALENTS
6,264

 
(1,856
)
CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
4,487

 
5,829

End of period
$
10,751

 
$
3,973


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 4


Westar Energy, Inc.
2nd Quarter 2014 vs. 2013
Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2013 basic earnings attributable to common stock
 
 
 
$
67,188

 
 
 
$
0.53

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
32,294

 
A
 
 
 
Wholesale
 
 
 
651

 
 
 
 
 
Transmission
 
 
 
10,896

 
 
 
 
 
Other revenues
 
 
 
(762
)
 
 
 
 
 
Fuel and purchased power
 
 
 
(12,079
)
 
B
 
 
 
SPP network transmission costs
 
 
 
(10,933
)
 
 
 
 
 
Gross Margin
 
 
 
20,067

 
 
 
 
 
Operating and maintenance
 
 
 
(13,840
)
 
C
 
 
 
Depreciation and amortization
 
 
 
(3,285
)
 
D
 
 
 
Selling, general and administrative
 
 
 
(7,691
)
 
E
 
 
 
Taxes other than income tax
 
 
 
(4,034
)
 
F
 
 
 
Other income (expense)
 
 
 
(6,501
)
 
G
 
 
 
Interest expense
 
 
 
(1,505
)
 
 
 
 
 
Income tax expense
 
 
 
3,160

 
H
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(86
)
 
 
 
 
 
Change in shares outstanding
 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014 basic earnings attributable to common stock
 
 
 
$
53,473

 
 
 
$
0.41

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due primarily to increased average retail prices (see page 7 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due primarily to an increase in purchased power
 
 
 
 
 
 
 
 
 
 
C
Due primarily to higher planned maintenance costs at coal-fired plants -- ($9.2M); and higher costs at Wolf Creek incurred during a scheduled outage-- ($4.3M)
 
 
 
 
 
 
 
 
 
 
 
D
Due principally to property additions and implementing new software systems
 
 
 
 
 
 
 
 
 
 
E
Due principally to higher benefit costs including the effect of restructuring insurance contracts in 2013 used to fund those benefits -- ($4.5M)
 
 
 
 
 
 
 
 
 
 
F
Due primarily to higher property tax expense that is largely offset by increased prices -- ($3.5M)
 
 
 
 
 
 
 
 
 
 
G
Due primarily to no COLI death benefits this year -- ($10.0M); higher equity AFUDC -- $1.8M
 
 
 
 
 
 
 
 
 
 
H
Due primarily to lower 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 June 30, 2014 should be read in conjunction with this financial information.
Page 5


Westar Energy, Inc.
YTD June 2014 vs. 2013
Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2013 basic earnings attributable to common stock
 
 
 
$
118,333

 
 
 
$
0.93

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
70,568

 
A
 
 
 
Wholesale
 
 
 
24,794

 
B
 
 
 
Transmission
 
 
 
20,851

 
 
 
 
 
Other revenues
 
 
 
9,210

 
C
 
 
 
Fuel and purchased power
 
 
 
(34,166
)
 
D
 
 
 
SPP network transmission costs
 
 
 
(19,095
)
 
 
 
 
 
Gross Margin
 
 
 
72,162

 
 
 
 
 
Operating and maintenance
 
 
 
(21,475
)
 
E
 
 
 
Depreciation and amortization
 
 
 
(6,549
)
 
F
 
 
 
Selling, general and administrative
 
 
 
(15,231
)
 
G
 
 
 
Taxes other than income tax
 
 
 
(8,089
)
 
H
 
 
 
Other income (expense)
 
 
 
(6,285
)
 
I
 
 
 
Interest expense
 
 
 
(3,461
)
 
 
 
 
 
Income tax expense
 
 
 
(6,988
)
 
J
 
 
 
Net income attributable to noncontrolling interests
 
 
 
10

 
 
 
 
 
Change in shares outstanding
 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014 basic earnings attributable to common stock
 
 
 
$
122,427

 
 
 
$
0.95

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due primarily to increased average retail prices (see page 8 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due to a 10% increase in MWh sales at higher average prices (see page 8 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due primarily to an increase in energy marketing margins from favorable market conditions primarily in Q1 -- $11.1M
 
 
 
 
 
 
 
 
 
 
D
Due primarily to higher average cost of purchased power
 
 
 
 
 
 
 
 
 
 
E
Due primarily to higher costs at Wolf Creek incurred during a planned outage -- ($11.4M); and higher costs for planned maintenance at coal fired plants -- ($7.0M)
 
 
 
 
 
 
 
 
 
 
 
F
Due principally to property additions and implementing new software systems
 
 
 
 
 
 
 
 
 
 
G
Due principally to higher benefit costs including the effect of restructuring insurance contracts in 2013 -- ($7.8M); integration costs associated with implementing new software systems -- ($2.3M)
 
 
 
 
 
 
 
 
 
 
H
Due primarily to higher property tax expense that is largely offset by increased prices -- ($6.8M)
 
 
 
 
 
 
 
 
 
 
I
Due primarily to no COLI death benefits this year -- ($10.0M); higher equity AFUDC -- $4.0 M
 
 
 
 
 
 
 
 
 
 
J
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 June 30, 2014 should be read in conjunction with this financial information.
Page 6



Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Three Months Ended June 30,
 
2014
 
2013
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
175,671

 
$
165,302

 
$
10,369

 
6.3

Commercial
178,194

 
165,172

 
13,022

 
7.9

Industrial
106,984

 
92,820

 
14,164

 
15.3

Other retail
3,521

 
3,170

 
351

 
11.1

Provision for rate refunds
(6,554
)
 
(942
)
 
(5,612
)
 
(595.8
)
Total Retail Revenues
457,816

 
425,522

 
32,294

 
7.6

Tariff-based wholesale
63,976

 
62,490

 
1,486

 
2.4

Market-based wholesale
18,458

 
19,293

 
(835
)
 
(4.3
)
Transmission
63,700

 
52,804

 
10,896

 
20.6

Other
8,718

 
9,480

 
(762
)
 
(8.0
)
Total Revenues
$
612,668

 
$
569,589

 
$
43,079

 
7.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
1,416

 
1,460

 
(44
)
 
(3.0
)
Commercial
1,842

 
1,856

 
(14
)
 
(0.8
)
Industrial
1,447

 
1,312

 
135

 
10.3

Other retail
21

 
21

 
—

 
—

Total Retail
4,726

 
4,649

 
77

 
1.7

Tariff-based wholesale
1,191

 
1,327

 
(136
)
 
(10.2
)
Market-based wholesale
813

 
721

 
92

 
12.8

Total wholesale
2,004

 
2,048

 
(44
)
 
(2.1
)
Total Electricity Sales
6,730

 
6,697

 
33

 
0.5

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
96.87

 
$
91.53

 
$
5.34

 
5.8

Tariff-based wholesale
$
53.72

 
$
47.09

 
$
6.63

 
14.1

Market-based wholesale
$
22.70

 
$
26.76

 
$
(4.06
)
 
(15.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
115,813

 
$
130,158

 
$
(14,345
)
 
(11.0
)
Purchased power
59,071

 
30,518

 
28,553

 
93.6

Subtotal
174,884

 
160,676

 
14,208

 
8.8

RECA recovery and other
(10,105
)
 
(7,976
)
 
(2,129
)
 
(26.7
)
Total fuel and purchased power expense
$
164,779

 
$
152,700

 
$
12,079

 
7.9

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
321

 
514

 
(193
)
 
(37.5
)
                    Coal
4,459

 
4,748

 
(289
)
 
(6.1
)
                    Nuclear
633

 
837

 
(204
)
 
(24.4
)
                    Wind
116

 
110

 
6

 
5.5

Subtotal electricity generated
5,529

 
6,209

 
(680
)
 
(11.0
)
Purchased
1,501

 
910

 
591

 
64.9

Total Electricity Supply
7,030

 
7,119

 
(89
)
 
(1.3
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
20.95

 
$
20.96

 
$
(0.01
)
 
—

Average cost of purchased power
$
39.35

 
$
33.54

 
$
5.81

 
17.3

Average cost of fuel and purchased power
$
24.88

 
$
22.57

 
$
2.31

 
10.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2013/
 
 
 
 
 
2014
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
553

 
496

 
57

 
11.5

Actual compared to 20 year average
553

 
457

 
96

 
21.0

Heating
 
 
 
 
 
 


Actual compared to last year
393

 
581

 
(188
)
 
(32.4
)
Actual compared to 20 year average
393

 
385

 
8

 
2.1



The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 7




Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Six Months Ended June 30,
 
2014
 
2013
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
367,958

 
$
330,678

 
$
37,280

 
11.3

Commercial
339,294

 
313,128

 
26,166

 
8.4

Industrial
201,480

 
183,745

 
17,735

 
9.7

Other retail
6,982


6,367

 
615

 
9.7

Provision for rate refunds
(18,539
)
 
(7,311
)
 
(11,228
)
 
(153.6
)
Total Retail Revenues
897,175

 
826,607

 
70,568

 
8.5

Tariff-based wholesale
131,870

 
134,239

 
(2,369
)
 
(1.8
)
Market-based wholesale
61,177

 
34,014

 
27,163

 
79.9

Transmission
125,166

 
104,315

 
20,851

 
20.0

Other
25,836

 
16,626

 
9,210

 
55.4

Total Revenues
$
1,241,224

 
$
1,115,801

 
$
125,423

 
11.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
3,125

 
3,003

 
122

 
4.1

Commercial
3,602

 
3,558

 
44

 
1.2

Industrial
2,786

 
2,624

 
162

 
6.2

Other retail
42

 
43

 
(1
)
 
(2.3
)
Total Retail
9,555

 
9,228

 
327

 
3.5

Tariff-based wholesale
2,563

 
2,807

 
(244
)
 
(8.7
)
Market-based wholesale
1,918

 
1,286

 
632

 
49.1

Total wholesale
4,481

 
4,093

 
388

 
9.5

Total Electricity Sales
14,036

 
13,321

 
715

 
5.4

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
93.90

 
$
89.58

 
$
4.32

 
4.8

Tariff-based wholesale
$
51.45

 
$
47.82

 
$
3.63

 
7.6

Market-based wholesale
$
31.90

 
$
26.45

 
$
5.45

 
20.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
254,463

 
$
257,812

 
$
(3,349
)
 
(1.3
)
Purchased power
98,522

 
59,534

 
38,988

 
65.5

Subtotal
352,985

 
317,346

 
35,639

 
11.2

RECA recovery and other
(14,367
)
 
(12,894
)
 
(1,473
)
 
(11.4
)
Total fuel and purchased power expense
$
338,618

 
$
304,452

 
$
34,166

 
11.2

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
625

 
864

 
(239
)
 
(27.7
)
                    Coal
9,640

 
9,934

 
(294
)
 
(3.0
)
                    Nuclear
1,527

 
1,292

 
235

 
18.2

                    Wind
229

 
214

 
15

 
7.0

Subtotal electricity generated
12,021

 
12,304

 
(283
)
 
(2.3
)
Purchased
2,546

 
1,767

 
779

 
44.1

Total Electricity Supply
14,567

 
14,071

 
496

 
3.5

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
21.17

 
$
20.95

 
$
0.22

 
1.1

Average cost of purchased power
$
38.70

 
$
33.69

 
$
5.01

 
14.9

Average cost of fuel and purchased power
$
24.23

 
$
22.55

 
$
1.68

 
7.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2013/
 
 
 
 
 
2014
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
553

 
496

 
57

 
11.5

Actual compared to 20 year average
553

 
459

 
94

 
20.5

Heating
 
 
 
 
 
 
 
Actual compared to last year
3,196

 
3,092

 
104

 
3.4

Actual compared to 20 year average
3,196

 
2,814

 
382

 
13.6

 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 8


Westar Energy, Inc.
Capitalization
 
 
June 30, 2014
 
 
 
December 31, 2013
 
 
 
 
(Dollars in Thousands)
 
 
Current maturities of long-term debt
 
$
—

 
 
 
$
250,000

 
 
Current maturities of long-term debt of VIEs
 
28,098

 
 
 
27,479

 
 
Long-term debt, net
 
3,215,805

 
 
 
2,968,958

 
 
Long-term debt of variable interest entities, net
 
166,720

 
 
 
194,802

 
 
Total long-term debt
 
3,410,623

 
52.1
%
 
3,441,239

 
52.9
%
Common equity
 
3,120,823

 
47.7
%
 
3,062,774

 
47.0
%
Noncontrolling interests
 
10,120

 
0.2
%
 
5,757

 
0.1
%
Total capitalization
 
$
6,541,566

 
100.0
%
 
$
6,509,770

 
100.0
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
24.14

 
 
 
$
23.88

 


Period end shares outstanding (in thousands)
 
129,273

 
 
 
128,254

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
June 30, 2014
 
 
 
December 31, 2013
 
 
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

 
 
8.625% Series due December 2018
95709TAG5
300,000

 
 
 
300,000

 
 
5.10% Series due July 2020
95709TAD2
250,000

 
 
 
250,000

 
 
5.95% Series due January 2035
95709TAC4
125,000

 
 
 
125,000

 
 
5.875% Series due July 2036
95709TAE0
150,000

 
 
 
150,000

 
 
4.125% Series due March 2042
95709TAH3
550,000

 
 
 
550,000

 
 
4.10% Series due April 2043
95709TAJ9
430,000

 
 
 
250,000

 
 
4.625% Series due September 2043
95709TAK6
250,000

 
 
 
250,000

 
 
 
 
2,430,000

 
 
 
2,250,000

 
 
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
 
2,505,500

 
 
 
2,325,500

 
 
 
 
 
 
 
 
 
 
 
KGE
 
 
 
 
 
 
 
 
First mortgage bond series:
 
 
 
 
 
 
 
 
6.70%Series due June 2019
485260BL6
300,000

 
 
 
300,000

 
 
6.15% Series due May 2023
485260B@1
50,000

 
 
 
50,000

 
 
6.53% Series due December 2037
485260BJ1
175,000

 
 
 
175,000

 
 
6.64%Series due May 2038
485260B#9
100,000

 
 
 
100,000

 
 
 
 
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

 
 
5.3% Series due June 2031
933623BR0
—

 
 
 
18,900

 
 
4.85% Series due June 2031
121825CB7
50,000

 
 
 
50,000

 
 
5.0% Series due June 2031
121825CF8
—

 
 
 
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

 
 
 
 
96,440

 
 

273,940

 
 
Total KGE
 
721,440

 
 
 
898,940

 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
 
3,226,940

 
 
 
3,224,440

 
 
Unamortized debt discount
 
(11,135
)
 
 
 
(5,482
)
 
 
Long-term debt due within one year
 
—

 
 
 
(250,000
)
 
 
Total long-term debt, net
 
$
3,215,805

 
 
 
$
2,968,958

 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 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.

The calculations of gross margin for the three and six months ended June 30, 2014 and 2013 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.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
Change
 
2014
 
2013
 
Change
 
(Dollars in Thousands)
Revenues
$
612,668

 
$
569,589


$
43,079


$
1,241,224


$
1,115,801


$
125,423

Less: Fuel and purchased power expense
164,779

 
152,700

 
12,079

 
338,618

 
304,452

 
34,166

 SPP network transmission costs
55,533

 
44,600

 
10,933

 
107,491

 
88,396

 
19,095

Gross Margin
$
392,356


$
372,289


$
20,067


$
795,115


$
722,953


$
72,162

 
 
 
 
 
 
 
 
 
 
 
 
Gross margin
$
392,356

 
$
372,289

 
$
20,067

 
$
795,115

 
$
722,953

 
$
72,162

Less: Operating and maintenance expense
101,839

 
87,999

 
13,840

 
193,629

 
172,154

 
21,475

Depreciation and amortization expense
70,882

 
67,597

 
3,285

 
140,992

 
134,443

 
6,549

Selling, general and administrative expense
62,168

 
54,477

 
7,691

 
118,653

 
103,422

 
15,231

Taxes other than income tax
34,738

 
30,704

 
4,034

 
69,571

 
61,482

 
8,089

Income from operations
$
122,729

 
$
131,512


$
(8,783
)

$
272,270


$
251,452


$
20,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended June 30, 2014 should be read in conjunction with this financial information.
Page 10