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WR_12.31.2014-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) February 25, 2015

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 February 25, 2015, we issued a press release announcing our earnings for the period ended December 31, 2014. A copy of our February 25, 2015 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2014 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 9.01. Financial Statements and Exhibits.

Exhibit 99.1    Press Release dated February 25, 2015
Exhibit 99.2    2014 Fourth Quarter and Year-End 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:
 
February 25, 2015
 
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 25, 2015
Exhibit 99.2
 
2014 Fourth Quarter and Year-End Earnings Package




12.31.2014 8-K Exhibit 99.1

Exhibit 99.1
WESTAR ENERGY ANNOUNCES 2014 RESULTS
TOPEKA, Kan., Feb. 25, 2015 - Westar Energy, Inc. (NYSE:WR) today announced earnings of $313 million, or $2.40 per share, for 2014 compared with earnings of $293 million, or $2.29 per share, for 2013. Fourth quarter 2014 earnings were $43 million, or $0.33 per share, compared with earnings of $41 million, or $0.32 per share, for the fourth quarter 2013.
    
Higher net income for 2014 was driven primarily by higher prices resulting from investments in air quality controls and transmission infrastructure and an increase in retail sales led by industrial customers. The increase in revenues was partially offset with higher operating costs primarily due to planned maintenance, selling, general and administrative and depreciation expense.

Higher net income for the fourth quarter 2014 was driven primarily by higher prices, offset by an increase in selling, general and administrative costs and higher depreciation.
Earnings Guidance
The company issued 2015 earnings guidance of $2.25 to $2.45 per share and posted to its website a summary of factors it considers to be principal drivers and assumptions 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 36 cents per share payable April 1, 2015 on the company's common stock payable to shareholders of record as of March 9, 2015. The new dividend reflects a 3 percent increase over the company's previous quarterly dividend of 35 cents per share, and results in an indicated annual dividend of $1.44 per share.
Conference Call and Additional Company Information
Westar Energy management will host a conference call Thursday, Feb. 26, 2015 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 866-515-2909, participant code 67205944. 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.


WESTAR ENERGY NEWS RELEASE    Page 1 of 3

Westar Energy announces 2014 results


This earnings announcement, a package of detailed fourth quarter and year-end 2014 financial information, the company's annual report on Form 10-K for the period ended Dec. 31, 2014 and other filings the company made with the Securities and Exchange Commission are available on the company's website at www.WestarEnergy.com.


- 30 -

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, 2014 (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.

Media Contact:
Gina Penzig
Media Relations Manager
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 2014 results


Westar Energy, Inc.
Consolidated Statements of Income
(Unaudited)
 
Three Months Ended Dec. 31,
 
Twelve Months Ended Dec. 31,
 
2014
 
2013
 
Change
 
% Change
 
2014
 
2013
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
$
164,522

 
$
160,190

 
$
4,332

 
2.7
 
$
793,586

 
$
728,852

 
$
64,734

 
8.9
Commercial
165,082

 
154,057

 
11,025

 
7.2
 
727,964

 
667,106

 
60,858

 
9.1
Industrial
100,478

 
92,670

 
7,808

 
8.4
 
414,997

 
374,825

 
40,172

 
10.7
Other retail
(6,592
)
 
6,034

 
(12,626
)
 
(209.2)
 
(24,180
)
 
8,939

 
(33,119
)
 
(370.5)
Total Retail Revenues
423,490

 
412,951

 
10,539

 
2.6
 
1,912,367

 
1,779,722

 
132,645

 
7.5
Wholesale
102,003

 
85,491

 
16,512

 
19.3
 
392,730

 
348,239

 
44,491

 
12.8
Transmission
64,527

 
53,556

 
10,971

 
20.5
 
256,838

 
210,281

 
46,557

 
22.1
Other
6,419

 
7,880

 
(1,461
)
 
(18.5)
 
39,768

 
32,412

 
7,356

 
22.7
Total Revenues
596,439

 
559,878

 
36,561

 
6.5
 
2,601,703

 
2,370,654

 
231,049

 
9.7
OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Fuel and purchased power
166,077

 
151,783

 
14,294

 
9.4
 
705,450

 
634,797

 
70,653

 
11.1
SPP network transmission costs
55,713

 
44,894

 
10,819

 
24.1
 
218,924

 
178,604

 
40,320

 
22.6
Operating and maintenance
89,347

 
93,528

 
(4,181
)
 
(4.5)
 
367,188

 
359,060

 
8,128

 
2.3
Depreciation and amortization
73,172

 
69,289

 
3,883

 
5.6
 
286,442

 
272,593

 
13,849

 
5.1
Selling, general and administrative
70,807

 
66,464

 
4,343

 
6.5
 
250,439

 
224,133

 
26,306

 
11.7
Taxes other than income tax
36,054

 
30,392

 
5,662

 
18.6
 
140,302

 
122,282

 
18,020

 
14.7
Total Operating Expenses
491,170

 
456,350

 
34,820

 
7.6
 
1,968,745

 
1,791,469

 
177,276

 
9.9
INCOME FROM OPERATIONS
105,269

 
103,528

 
1,741

 
1.7
 
632,958

 
579,185

 
53,773

 
9.3
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Investment earnings
3,414

 
1,444

 
1,970

 
136.4
 
10,622

 
10,056

 
566

 
5.6
Other income
4,956

 
5,861

 
(905
)
 
(15.4)
 
31,522

 
35,609

 
(4,087
)
 
(11.5)
Other expense
(4,196
)
 
(4,188
)
 
(8
)
 
(0.2)
 
(18,389
)
 
(18,099
)
 
(290
)
 
(1.6)
Total Other Income (Expense)
4,174

 
3,117

 
1,057

 
33.9
 
23,755

 
27,566

 
(3,811
)
 
(13.8)
Interest expense
45,043

 
46,377

 
(1,334
)
 
(2.9)
 
183,118

 
182,167

 
951

 
0.5
INCOME BEFORE INCOME TAXES
64,400

 
60,268

 
4,132

 
6.9
 
473,595

 
424,584

 
49,011

 
11.5
Income tax expense
18,627

 
17,207

 
1,420

 
8.3
 
151,270

 
123,721

 
27,549

 
22.3
NET INCOME
45,773

 
43,061

 
2,712

 
6.3
 
322,325

 
300,863

 
21,462

 
7.1
Less: Net income attributable to noncontrolling interests
2,324

 
1,999

 
325

 
16.3
 
9,066

 
8,343

 
723

 
8.7
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
43,449

 
41,062

 
2,387

 
5.8
 
313,259

 
292,520

 
20,739

 
7.1
Earnings per common share, basic
$
0.33

 
$
0.32

 
$
0.01

 
3.1
 
$
2.40

 
$
2.29

 
$
0.11

 
4.8
Average equivalent common shares outstanding
131,467

 
127,892

 
3,575

 
2.8
 
130,015

 
127,463

 
2,552

 
2.0
DIVIDENDS DECLARED PER COMMON SHARE
$
0.35

 
$
0.34

 
$
0.01

 
2.9
 
$
1.40

 
$
1.36

 
$
0.04

 
2.9
Effective income tax rate
28.92
%
 
28.55
%
 
 
 
 
 
31.94
%
 
29.14
%
 
 
 
 

WESTAR ENERGY NEWS RELEASE    Page 3 of 3

12.31.2014 8-K Exhibit 99.2


Exhibit 99.2
Westar Energy, Inc.
Fourth Quarter and Year-end 2014 Earnings
Released February 25, 2015





Contents
Page
 
 
Supplemental Slides
 












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, 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.
Consolidated Statements of Income
(Unaudited)

 
Three Months Ended December 31,
 
2014
 
2013
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
 
 
REVENUES:
 
 
 
 
 
 
 
Residential
$
164,522


$
160,190

 
$
4,332

 
2.7

Commercial
165,082


154,057

 
11,025

 
7.2

Industrial
100,478


92,670

 
7,808

 
8.4

Other retail
(6,592
)

6,034

 
(12,626
)
 
(209.2
)
Total Retail Revenues
423,490

 
412,951

 
10,539

 
2.6

Wholesale
102,003


85,491

 
16,512

 
19.3

Transmission
64,527


53,556

 
10,971

 
20.5

Other
6,419


7,880

 
(1,461
)
 
(18.5
)
Total Revenues
596,439

 
559,878

 
36,561

 
6.5

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
166,077


151,783

 
14,294

 
9.4

SPP network transmission costs
55,713

 
44,894

 
10,819

 
24.1

Operating and maintenance
89,347


93,528

 
(4,181
)
 
(4.5
)
Depreciation and amortization
73,172


69,289

 
3,883

 
5.6

Selling, general and administrative
70,807


66,464

 
4,343

 
6.5

Taxes other than income
36,054

 
30,392

 
5,662

 
18.6

Total Operating Expenses
491,170

 
456,350

 
34,820

 
7.6

INCOME FROM OPERATIONS
105,269

 
103,528

 
1,741

 
1.7

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
3,414

 
1,444

 
1,970

 
136.4

Other income
4,956

 
5,861

 
(905
)
 
(15.4
)
Other expense
(4,196
)
 
(4,188
)
 
(8
)
 
(0.2
)
Total Other Income
4,174

 
3,117

 
1,057

 
33.9

Interest expense
45,043

 
46,377

 
(1,334
)
 
(2.9
)
INCOME BEFORE INCOME TAXES
64,400

 
60,268

 
4,132

 
6.9

Income tax expense
18,627

 
17,207

 
1,420

 
8.3

NET INCOME
45,773

 
43,061

 
2,712

 
6.3

Less: Net income attributable to noncontrolling interests
2,324

 
1,999

 
325

 
16.3

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
43,449

 
$
41,062

 
$
2,387

 
5.8

Earnings per common share, basic
$
0.33

 
$
0.32

 
$
0.01

 
3.1

Diluted earnings per common share
$
0.32

 
$
0.32

 
$
—

 
—

Weighted average equivalent common shares outstanding – basic (in thousands)
131,467

 
127,892

 
3,575

 
2.8

Weighted average equivalent common shares outstanding – diluted (in thousands)
134,522

 
129,643

 
4,879

 
3.8

DIVIDENDS DECLARED PER COMMON SHARE
$
0.35

 
$
0.34

 
$
0.01

 
2.9

Effective income tax rate
28.92
%
 
28.55
%
 
 
 
 
 
 
 
 
 
 
 
 







The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 2


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

 
Twelve Months Ended December 31,
 
2014
 
2013
 
Change
 
% Change
 
(In Thousands, Except Per Share Amounts)
 
 
REVENUES:
 
 
 
 
 
 
 
Residential
$
793,586


$
728,852

 
$
64,734

 
8.9

Commercial
727,964


667,106

 
60,858

 
9.1

Industrial
414,997


374,825

 
40,172

 
10.7

Other retail
(24,180
)

8,939

 
(33,119
)
 
(370.5
)
Total Retail Revenues
1,912,367

 
1,779,722

 
132,645

 
7.5

Wholesale
392,730


348,239

 
44,491

 
12.8

Transmission
256,838


210,281

 
46,557

 
22.1

Other
39,768


32,412

 
7,356

 
22.7

Total Revenues
2,601,703

 
2,370,654

 
231,049

 
9.7

OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
705,450

 
634,797

 
70,653

 
11.1

SPP network transmission costs
218,924

 
178,604

 
40,320

 
22.6

Operating and maintenance
367,188

 
359,060

 
8,128

 
2.3

Depreciation and amortization
286,442

 
272,593

 
13,849

 
5.1

Selling, general and administrative
250,439

 
224,133

 
26,306

 
11.7

Taxes other than income
140,302

 
122,282

 
18,020

 
14.7

Total Operating Expenses
1,968,745

 
1,791,469

 
177,276

 
9.9

INCOME FROM OPERATIONS
632,958

 
579,185

 
53,773

 
9.3

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
10,622

 
10,056

 
566

 
5.6

Other income
31,522

 
35,609

 
(4,087
)
 
(11.5
)
Other expense
(18,389
)
 
(18,099
)
 
(290
)
 
(1.6
)
Total Other Income
23,755

 
27,566

 
(3,811
)
 
(13.8
)
Interest expense
183,118

 
182,167

 
951

 
0.5

INCOME BEFORE INCOME TAXES
473,595

 
424,584

 
49,011

 
11.5

Income tax expense
151,270

 
123,721

 
27,549

 
22.3

NET INCOME
322,325

 
300,863

 
21,462

 
7.1

Less: Net income attributable to noncontrolling interests
9,066

 
8,343

 
723

 
8.7

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
313,259

 
$
292,520

 
$
20,739

 
7.1

Earnings per common share, basic
$
2.40

 
$
2.29

 
$
0.11

 
4.8

Diluted earnings per common share
$
2.35

 
$
2.27

 
$
0.08

 
3.5

Weighted average equivalent common shares outstanding – basic (in thousands)
130,015

 
127,463

 
2,552

 
2.0

Weighted average equivalent common shares outstanding – diluted (in thousands)
132,825

 
128,299

 
$
4,526

 
3.5

DIVIDENDS DECLARED PER COMMON SHARE
$
1.40

 
$
1.36

 
$
0.04

 
2.9

Effective income tax rate
31.94
%
 
29.14
%
 
 
 
 
 
 
 
 
 
 
 
 



The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 3


Westar Energy, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except Par Values)
(Unaudited)
 
December 31, 2014
 
December 31, 2013
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
4,556

 
$
4,487

Accounts receivable, net of allowance for doubtful accounts of $5,309 and $4,596, respectively
267,327

 
250,036

Fuel inventory and supplies
247,406

 
239,511

Deferred tax assets
29,636

 
37,954

Prepaid expenses
15,793

 
15,821

Regulatory assets
105,549

 
135,408

Other
30,655

 
23,608

Total Current Assets
700,922

 
706,825

PROPERTY, PLANT AND EQUIPMENT, NET
8,162,908

 
7,551,916

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
278,573

 
296,626

OTHER ASSETS:
 
 
 
Regulatory assets
754,229

 
620,006

Nuclear decommissioning trust
185,016

 
175,625

Other
265,353

 
246,140

Total Other Assets
1,204,598

 
1,041,771

TOTAL ASSETS
$
10,347,001

 
$
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
27,933

 
27,479

Short-term debt
257,600

 
134,600

Accounts payable
219,351

 
233,351

Accrued dividends
44,971

 
43,604

Accrued taxes
74,356

 
69,769

Accrued interest
79,707

 
80,457

Regulatory liabilities
55,142

 
35,982

Other
90,571

 
80,184

Total Current Liabilities
849,631

 
955,426

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
3,215,539

 
2,968,958

Long-term debt of variable interest entities, net
166,565

 
194,802

Deferred income taxes
1,475,487

 
1,363,148

Unamortized investment tax credits
211,040

 
192,265

Regulatory liabilities
288,343

 
293,574

Accrued employee benefits
532,622

 
331,558

Asset retirement obligations
230,668

 
160,682

Other
75,799

 
68,194

Total Long-Term Liabilities
6,196,063

 
5,573,181

COMMITMENTS AND CONTINGENCIES (See Notes 13 and 15)
 
 
 
EQUITY:
 
 
 
Westar Energy, Inc. Shareholders’ Equity:
 
 
 
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 131,687,454 shares and 128,254,229 shares, respective to each date
658,437

 
641,271

Paid-in capital
1,781,120

 
1,696,727

Retained earnings
855,299

 
724,776

Total Westar Energy, Inc. Shareholders’ Equity
3,294,856

 
3,062,774

Noncontrolling Interests
6,451

 
5,757

Total Equity
3,301,307

 
3,068,531

TOTAL LIABILITIES AND EQUITY
$
10,347,001

 
$
9,597,138


The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 4



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

 
Twelve Months Ended December 31,
 
2014
 
2013
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
322,325

 
$
300,863

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
286,442

 
272,593

Amortization of nuclear fuel
26,051

 
22,690

Amortization of deferred regulatory gain from sale leaseback
(5,495
)
 
(5,495
)
Amortization of corporate-owned life insurance
20,202

 
15,149

Non-cash compensation
7,280

 
8,188

Net deferred income taxes and credits
151,451

 
123,307

Stock-based compensation excess tax benefits
(875
)
 
(576
)
Allowance for equity funds used during construction
(17,029
)
 
(14,143
)
Changes in working capital items:
 
 
 
Accounts receivable
(17,291
)
 
(24,649
)
Fuel inventory and supplies
(8,773
)
 
10,124

Prepaid expenses and other
36,717

 
(12,316
)
Accounts payable
6,189

 
7,856

Accrued taxes
6,596

 
14,218

Other current liabilities
(31,624
)
 
(52,829
)
Changes in other assets
6,378

 
(4,167
)
Changes in other liabilities
35,811

 
41,990

Cash Flows from Operating Activities
824,355

 
702,803

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(852,052
)
 
(780,098
)
Purchase of securities - trust
(9,075
)
 
(66,668
)
Sale of securities - trust
11,125

 
81,994

Investment in corporate-owned life insurance
(16,250
)
 
(17,724
)
Proceeds from investment in corporate-owned life insurance
43,234

 
147,658

Proceeds from federal grant
—

 
876

Investment in affiliated company
(8,000
)
 
(4,947
)
Other investing activities
(7,730
)
 
(2,992
)
Cash Flows used in Investing Activities
(838,748
)
 
(641,901
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
122,406

 
(205,241
)
Proceeds from long-term debt
417,943

 
492,347

Retirements of long-term debt
(427,500
)
 
(100,000
)
Retirements of long-term debt of variable interest entities
(27,479
)
 
(25,942
)
Repayment of capital leases
(3,340
)
 
(2,995
)
Borrowings against cash surrender value of corporate-owned life insurance
59,766

 
59,565

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(41,249
)
 
(145,418
)
Stock-based compensation excess tax benefits
875

 
576

Issuance of common stock
87,669

 
32,906

Distributions to shareholders of noncontrolling interests
(1,030
)
 
(2,419
)
Cash dividends paid
(171,507
)
 
(162,904
)
Other financing activities
(2,092
)
 
(2,719
)
Cash Flows from (used in) Financing Activities
14,462

 
(62,244
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
69

 
(1,342
)
CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
4,487

 
5,829

End of period
$
4,556

 
$
4,487


The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 5



Westar Energy, Inc.
4th Quarter 2014 vs. 2013

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2013 earnings attributable to common stock
 
 
 
$
41,062

 
 
 
$
0.32

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
10,539

 
A
 
 
 
Wholesale
 
 
 
16,512

 
B
 
 
 
Transmission
 
 
 
10,971

 
 
 
 
 
Other revenues
 
 
 
(1,461
)
 
 
 
 
 
Fuel and purchased power
 
 
 
(14,294
)
 
C
 
 
 
SPP network transmission costs
 
 
 
(10,819
)
 
D
 
 
 
Gross Margin
 
 
 
11,448

 
 
 
 
 
Operating and maintenance
 
 
 
4,181

 
E
 
 
 
Depreciation and amortization
 
 
 
(3,883
)
 
F
 
 
 
Selling, general and administrative
 
 
 
(4,343
)
 
G
 
 
 
Taxes other than income taxes
 
 
 
(5,662
)
 
H
 
 
 
Other income (expense)
 
 
 
1,057

 
I
 
 
 
Interest expense
 
 
 
1,334

 
 
 
 
 
Income tax expense
 
 
 
(1,420
)
 
 
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(325
)
 
 
 
 
 
Change in shares outstanding
 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014 earnings attributable to common stock
 
 
 
$
43,449

 
 
 
$
0.33

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due primarily to a 6% increase in average retail prices (see page 8 for changes by customer class)


 
 
 
 
 
 
 
 
 
 
B
Due primarily to a 22% increase in MWh sales(see page 8 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due primarily to an increase in purchased power
 
 
 
 
 
 
 
 
 
 
D
Due principally to increased investment in the transmission system (offset through increased prices)
 
 
 
 
 
 
 
 
 
 
E
Due primarily to decrease in maintenance costs at Wolf Creek - $4.8M; reduction in storm deferral -- $1.4M; and timing of tree trimming costs -- $1.2M; offset by an increase in planned maintenance outages -- ($3.9M)

 
 
 
 
 
 
 
 
 
 
F
Due to additional depreciation expense associated primarily with additions at our power plants
 
 
 
 
 
 
 
 
 
 
G
Higher fees related to implementing new software systems ($2.4M); and higher allowance for uncollectible accounts -- ($0.6M)
 
 
 
 
 
 
 
 
 
 
H
Due primarily to increase in property taxes (offset through increased prices) -- ($5.5M)
 
 
 
 
 
 
 
 
 
 
I
Due primarily to Prairie Wind equity earnings -- $3M; partially offset by a decrease in equity AFUDC -- ($1M)

 
 
 
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 6


Westar Energy, Inc.
YTD December 2014 vs. 2013
Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2013 earnings attributable to common stock
 
 
 
$
292,520

 
 
 
$
2.29

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
 
132,645

 
A
 
 
 
Wholesale
 
 
 
44,491

 
B
 
 
 
Transmission
 
 
 
46,557

 
 
 
 
 
Other revenues
 
 
 
7,356

 
 
 
 
 
Fuel and purchased power
 
 
 
(70,653
)
 
C
 
 
 
SPP network transmission costs
 
 
 
(40,320
)
 
D
 
 
 
Gross Margin
 
 
 
120,076

 
 
 
 
 
Operating and maintenance
 
 
 
(8,128
)
 
E
 
 
 
Depreciation and amortization
 
 
 
(13,849
)
 
 
 
 
 
Selling, general and administrative
 
 
 
(26,306
)
 
F
 
 
 
Taxes other than income
 
 
 
(18,020
)
 
G
 
 
 
Other income (expense)
 
 
 
(3,811
)
 
H
 
 
 
Interest expense
 
 
 
(951
)
 
 
 
 
 
Income tax expense
 
 
 
(27,549
)
 
 
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(723
)
 
 
 
 
 
Preferred dividends
 
 
 
—

 
 
 
 
 
Change in shares outstanding
 
(0.05
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014 earnings attributable to common stock
 
 
 
$
313,259

 
 
 
$
2.40

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due primarily to a 6% increase in average retail prices (see page 9 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
B
Due to a 11% increase in MWh sales (see page 9 for changes by customer class)
 
 
 
 
 
 
 
 
 
 
C
Due primarily to an increase in purchased power
 
 
 
 
 
 
 
 
 
 
D
Due principally to increased investment in the transmission system (offset through increased prices)
 
 
 
 
 
 
 
 
 
 
E
Due primarily to planned outage at Wolf Creek -- ($9M); higher costs at generating plants primarily for planned outages at coal-fired plants -- ($6.4M); and higher costs for transmission system -- ($4.3); partially offset by lower expense for previously deferred storm costs -- $7.8M; and lower maintenance expenses for Wolf Creek -- $5M
 
 
 
 
 
 
 
 
 
 
F
Due primarily to: increase in employee benefit costs including the effect of restructuring insurance contracts in 2013 -- ($10.6M); integration costs associated with implementing new software systems -- ($6.1M); and higher allowance for uncollectible accounts -- ($2.7M)

 
 
 
 
 
 
 
 
 
 
G
Due primarily to an increase in property taxes (offset through increased prices) -- ($16.2M)

 
 
 
 
 
 
 
 
 
 
H
Due primarily to: increased investment earnings in Prairie Wind Transmission JV -- $4.9M; and higher equity AFUDC -- $2.9M; offset by lower COLI proceeds -- ($7M); and reduced earnings in a trust to fund retirement benefits ($4.1M)

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 7


Westar Energy, Inc.
Revenue, Sales and Energy Supply
Supplemental Data
Three Months Ended December 31,
 
2014
 
2013
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
164,522

 
$
160,190

 
$
4,332

 
2.7

Commercial
165,082

 
154,057

 
11,025

 
7.2

Industrial
100,478

 
92,670

 
7,808

 
8.4

Other retail
3,561

 
3,219

 
342

 
10.6

Provision for rate refunds
(10,153
)
 
2,815

 
(12,968
)
 
(460.7
)
Total Retail Revenues
423,490

 
412,951

 
10,539

 
2.6

Tariff-based wholesale
66,454

 
66,088

 
366

 
0.6

Market-based wholesale
35,549

 
19,403

 
16,146

 
83.2

Transmission
64,527

 
53,556

 
10,971

 
20.5

Other
6,419

 
7,880

 
(1,461
)
 
(18.5
)
Total Revenues
$
596,439

 
$
559,878

 
$
36,561

 
6.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
1,352

 
1,448

 
(96
)
 
(6.6
)
Commercial
1,729

 
1,758

 
(29
)
 
(1.6
)
Industrial
1,349

 
1,387

 
(38
)
 
(2.7
)
Other retail
21

 
21

 
—

 
—

Total Retail
4,451

 
4,614

 
(163
)
 
(3.5
)
Tariff-based wholesale
1,212

 
1,359

 
(147
)
 
(10.8
)
Market-based wholesale
1,386

 
775

 
611

 
78.8

Total wholesale
2,598

 
2,134

 
464

 
21.7

Total Electricity Sales
7,049

 
6,748

 
301

 
4.5

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
95.14

 
$
89.50

 
$
5.64

 
6.3

Tariff-based wholesale
$
54.83

 
$
48.63

 
$
6.20

 
12.7

Market-based wholesale
$
25.65

 
$
25.04

 
$
0.61

 
2.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
112,497

 
$
119,215

 
$
(6,718
)
 
(5.6
)
Purchased power
44,590

 
27,823

 
16,767

 
60.3

Subtotal
157,087

 
147,038

 
10,049

 
6.8

RECA recovery and other
8,990

 
4,745

 
4,245

 
89.5

Total fuel and purchased power expense
$
166,077

 
$
151,783

 
$
14,294

 
9.4

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
298

 
301

 
(3
)
 
(1.0
)
                    Coal
4,326

 
4,768

 
(442
)
 
(9.3
)
                    Nuclear
1,253

 
1,110

 
143

 
12.9

                    Wind
111

 
116

 
(5
)
 
(4.3
)
Subtotal electricity generated
5,988

 
6,295

 
(307
)
 
(4.9
)
Purchased
1,324

 
825

 
499

 
60.5

Total Electricity Supply
7,312

 
7,120

 
192

 
2.7

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
18.79

 
$
18.94

 
$
(0.15
)
 
(0.8
)
Average cost of purchased power
$
33.68

 
$
33.72

 
$
(0.04
)
 
(0.1
)
Average cost of fuel and purchased power
$
21.48

 
$
20.65

 
$
0.83

 
4.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2013/
 
 
 
 
 
2014
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
52

 
45

 
7

 
15.6

Actual compared to 20 year average
52

 
39

 
13

 
33.3

Heating
 
 
 
 
 
 
 
Actual compared to last year
1,795

 
2,052

 
(257
)
 
(12.5
)
Actual compared to 20 year average
1,795

 
1,808

 
(13
)
 
(0.7
)
 
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 8


Westar Energy, Inc.
Revenue, Sales and Energy Supply

Supplemental Data
Twelve Months Ended December 31,
 
2014
 
2013
 
Change
 
% Change
Revenues
(Dollars In Thousands)
Residential
$
793,586

 
$
728,852

 
$
64,734

 
8.9

Commercial
727,964

 
667,106

 
60,858

 
9.1

Industrial
414,997

 
374,825

 
40,172

 
10.7

Other retail
14,076

 
12,739

 
1,337

 
10.5

Provision for rate refunds
(38,256
)
 
(3,800
)
 
(34,456
)
 
(906.7
)
Total Retail Revenues
1,912,367

 
1,779,722

 
132,645

 
7.5

Tariff-based wholesale
270,868

 
276,638

 
(5,770
)
 
(2.1
)
Market-based wholesale
121,862

 
71,801

 
50,061

 
69.7

Transmission
256,838

 
210,281

 
46,557

 
22.1

Other
39,768

 
32,412

 
7,356

 
22.7

Total Revenues
$
2,601,703

 
$
2,370,854

 
$
230,849

 
9.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
Residential
6,580

 
6,523

 
57

 
0.9

Commercial
7,521

 
7,480

 
41

 
0.5

Industrial
5,601

 
5,407

 
194

 
3.6

Other retail
86

 
86

 
—

 
—

Total Retail
19,788

 
19,496

 
292

 
1.5

Tariff-based wholesale
5,204

 
5,777

 
(573
)
 
(9.9
)
Market-based wholesale
4,340

 
2,816

 
1,524

 
54.1

Total wholesale
9,544

 
8,593

 
951

 
11.1

Total Electricity Sales
29,332

 
28,089

 
1,243

 
4.4

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Total retail
$
96.64

 
$
91.29

 
$
5.35

 
5.9

Tariff-based wholesale
$
52.05

 
$
47.89

 
$
4.16

 
8.7

Market-based wholesale
$
28.08

 
$
25.50

 
$
2.58

 
10.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
Fuel used for generation
$
510,892

 
$
532,277

 
$
(21,385
)
 
(4.0
)
Purchased power
190,483

 
114,783

 
75,700

 
66.0

Subtotal
701,375

 
647,060

 
54,315

 
8.4

RECA recovery and other
4,075

 
(12,263
)
 
16,338

 
133.2

Total fuel and purchased power expense
$
705,450

 
$
634,797

 
$
70,653

 
11.1

 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
Generated - Gas
1,380

 
1,785

 
(405
)
 
(22.7
)
                    Coal
19,495

 
20,677

 
(1,182
)
 
(5.7
)
                    Nuclear
4,022

 
3,369

 
653

 
19.4

                    Wind
426

 
427

 
(1
)
 
(0.2
)
Subtotal electricity generated
25,323

 
26,258

 
(935
)
 
(3.6
)
Purchased
5,112

 
3,413

 
1,699

 
49.8

Total Electricity Supply
30,435

 
29,671

 
764

 
2.6

 
 
 
 
 
 
 
 
 
(Dollars per MWh)
Average cost of fuel used for generation
$
20.18

 
$
20.27

 
$
(0.09
)
 
(0.4
)
Average cost of purchased power
$
37.26

 
$
33.63

 
$
3.63

 
10.8

Average cost of fuel and purchased power
$
23.05

 
$
21.81

 
$
1.24

 
5.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2013/
 
 
 
 
 
2014
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
1,689

 
1,642

 
47

 
2.9

Actual compared to 20 year average
1,689

 
1,622

 
67

 
4.1

Heating
 
 
 
 
 
 
 
Actual compared to last year
4,538

 
5,158

 
(620
)
 
(12.0
)
Actual compared to 20 year average
4,538

 
4,292

 
246

 
5.7

 
 
 
 
 
 
 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 9




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

 
 
 
$
250,000

 
 
Current maturities of long-term debt of VIEs
 
27,933

 
 
 
27,479

 
 
Long-term debt, net
 
3,215,539

 
 
 
2,968,958

 
 
Long-term debt of variable interest entities, net
 
166,565

 
 
 
194,802

 
 
Total debt
 
3,410,037

 
50.9
%
 
3,441,239

 
51.4
%
Common equity
 
3,294,856

 
46.9
%
 
3,062,774

 
47.0
%
Noncontrolling interests
 
6,451

 
0.1
%
 
5,757

 
0.1
%
Total capitalization
 
$
6,711,344

 
97.9
%
 
$
6,509,770

 
98.5
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
25.02

 
 
 
$
23.88

 


Period end shares outstanding (in thousands)
 
131,687

 
 
 
128,254

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
December 31, 2014
 
 
 
December 31, 2013
 
 
Westar Energy:
 
(Dollars in Thousands)
 
 
First Mortgage Bond series:
 
 
 
 
 
 
 
 
6.00% Series due July 2014
95709TAA8
$
—

 
 
 
$
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 December 2042
95709TAH3
550,000

 
 
 
550,000

 
 
4.10% Series due March 2043
95709TAJ9
430,000

 
 
 
250,000

 
 
4.625% Series due August 2043
95709TAK6
250,000

 
 
 
250,000

 
 
 
 
2,180,000

 
 
 
2,250,000

 
 
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

 
 
 
 
75,500

 
 
 
75,500

 
 
Total Westar Energy
 
2,255,500

 
 
 
2,325,500

 
 
 
 
 
 
 
 
 
 
 
KGE
 
 
 
 
 
 
 
 
First mortgage bond series:
 
 
 
 
 
 
 
 
6.70%Series due June 2019
U24448AB5
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

 
 
4.30% Series due July 2044
485260BM4
250,000

 
 
 
—

 
 
 
 
875,000

 
 
 
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

 
 
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

 
 
5.0% Series due June 2031
121825CF8
—

 
 
 
50,000

 
 
 
 
96,440

 
 
 
273,940

 
 
Total KGE
 
971,440

 
 
 
898,940

 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
 
3,226,940

 
 
 
3,224,440

 
 
Unamortized debt discount
 
(11,401
)
 
 
 
(5,482
)
 
 
Long-term debt due within one year
 
—

 
 
 
(250,000
)
 
 
Total long-term debt, net
 
$
3,215,539

 
 
 
$
2,968,958

 
 

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
Page 10



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. In addition, SPP network transmission costs fluctuate due primarily to investments by us and other members of the SPP for upgrades to the transmission grid within the SPP RTO. As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices we charge customers 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 twelve months ended 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 December 31,
 
Twelve Months Ended December 31,
 
2014
 
2013
 
Change
 
2014
 
2013
 
Change
 
(Dollars in Thousands)
Revenues
$
596,439

 
$
559,878


$
36,561


$
2,601,703

 
$
2,370,654


$
231,049

Less: Fuel and purchased power expense
166,077

 
151,783

 
14,294

 
705,450

 
634,797

 
70,653

 SPP network transmission costs
55,713

 
44,894

 
10,819

 
218,924

 
178,604

 
40,320

Gross Margin
$
374,649

 
$
363,201


$
11,448


$
1,677,329

 
$
1,557,253


$
120,076

 
 
 
 
 
 
 
 
 
 
 
 
Gross margin
$
374,649

 
$
363,201

 
$
11,448

 
$
1,677,329

 
$
1,557,253

 
$
120,076

Less: Operating and maintenance expense
89,347

 
93,528

 
(4,181
)
 
367,188

 
359,060

 
8,128

Depreciation and amortization expense
73,172

 
69,289

 
3,883

 
286,442

 
272,593

 
13,849

Selling, general and administrative expense
70,807

 
66,464

 
4,343

 
250,439

 
224,133

 
26,306

Taxes other than income tax
36,054

 
30,392

 
5,662

 
140,302

 
122,282

 
18,020

Income from operations
$
105,269

 
$
103,528


$
1,741


$
632,958

 
$
579,185


$
53,773

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K
for the period ended December 31, 2014 should be read in conjunction with this financial information.
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2015 Earnings Guidance

2015 EPS guidance range                                    $2.25 - $2.45

2015 Drivers:
•
Retail MWh sales up 150 bp
•
Normal weather and energy marketing activity
•
Modest price adjustments
•
≈$19 million transmission margin
•
FERC transmission formula rate and companion TDC, net of increase in SPP expenses
•
≈$17 million environmental cost recovery rider
•
≈1% decrease in combined O&M and SG&A expenses
•
≈2% increase top line operating expense excluding fuel and depreciation
•
COLI proceeds ≈$15 million
•
Equity AFUDC decrease ≈$15 million
•
Depreciation increase ≈$24 million
•
Includes ≈$5 million of La Cygne depreciation beginning November
•
Effective tax rate 33-35%
•
Interest expense unchanged
•
Financing:
•
No sale of additional equity
•
Settle ≈9 million forward shares already priced
•
Yearend average annual shares outstanding 138 million
•
No additional debt issuance planned
•
Plan to refinance $250 million of first mortgage bonds
•
File a GRC March 2 with a decision by late October


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 “driver,” “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, 2014 (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.


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