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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 3, 2016

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 3, 2016, we issued a press release announcing our earnings for the period ended March 31, 2016. A copy of our May 3, 2016 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. We are also including our 2016 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 3, 2016
Exhibit 99.2
2016 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 3, 2016
 
By:
 
/s/ Larry D. Irick
 
 
 
 
Name:
 
Larry D. Irick
 
 
 
 
Title:
 
Vice President, General Counsel and Corporate Secretary







EXHIBIT INDEX

Exhibit Number
 
Description of Exhibit
Exhibit 99.1
 
Press Release dated May 3, 2016
Exhibit 99.2
 
2016 First Quarter Earnings package




Exhibit
Exhibit 99.1


Westar Energy Announces 1st Quarter 2016 Results.
TOPEKA, Kan., May 3, 2016 - Westar Energy, Inc. (NYSE:WR) today announced earnings of $66 million, or $0.46 per share, for the first quarter 2016 compared with earnings of $51 million, or $0.38 per share, for the first quarter 2015.

Higher net income for the quarter, compared with last year, was driven by the impact of last fall's rate order which recovered the costs of mandated air quality controls, higher corporate owned life insurance proceeds, lower distribution system expenses, and lower operating and maintenance costs as a result of the company retiring some of its older, smaller generating plants late last year. The higher revenues were partially offset by the effects of unusually mild weather.

Earnings Guidance
The company affirmed its 2016 earnings guidance of $2.38 to $2.53 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 Wednesday, May 4 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 866-411-8234, participant code 86800330. 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 Jana Dawson 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, 2016 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, 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,”

WESTAR ENERGY NEWS RELEASE    Page 1 of 3
Westar Energy announces 1st quarter results

“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, 2015 (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 3, 2016, (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:
Jana Dawson
Director, corporate communications
Phone: 785-575-1975
Jana.Dawson@westarenergy.com
Media line: 888-613-0003

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


WESTAR ENERGY NEWS RELEASE    Page 2 of 3
Westar Energy announces 1st quarter results

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

 
Three Months Ended Mar. 31,
 
2016
 
2015
 
Change
 
% Change
 
(Dollars In Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
179,290

 
$
181,294

 
$
(2,004
)
 
(1.1
)
Commercial
165,673

 
161,305

 
4,368

 
2.7

Industrial
100,697

 
96,479

 
4,218

 
4.4

Other retail
(14,381
)
 
539

 
(14,920
)
 
nm

Total Retail Revenues
431,279

 
439,617

 
(8,338
)
 
(1.9
)
Wholesale
67,412

 
86,755

 
(19,343
)
 
(22.3
)
Transmission
63,915

 
58,585

 
5,330

 
9.1

Other
6,844

 
5,850

 
994

 
17.0

Total Revenues
569,450

 
590,807

 
(21,357
)
 
(3.6
)
OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
100,058

 
155,482

 
(55,424
)
 
(35.6
)
SPP network transmission costs
60,760

 
56,812

 
3,948

 
6.9

Operating and maintenance
77,757

 
85,080

 
(7,323
)
 
(8.6
)
Depreciation and amortization
83,640

 
74,586

 
9,054

 
12.1

Selling, general and administrative
56,456

 
55,418

 
1,038

 
1.9

Taxes other than income tax
48,968

 
37,871

 
11,097

 
29.3

Total Operating Expenses
427,639

 
465,249

 
(37,610
)
 
(8.1
)
INCOME FROM OPERATIONS
141,811

 
125,558

 
16,253

 
12.9

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
2,016

 
2,480

 
(464
)
 
(18.7
)
Other income
9,477

 
2,814

 
6,663

 
236.8

Other expense
(5,543
)
 
(5,713
)
 
170

 
3.0

Total Other Income (Expense)
5,950

 
(419
)
 
6,369

 
nm

Interest expense
40,431

 
44,298

 
(3,867
)
 
(8.7
)
INCOME BEFORE INCOME TAXES
107,330

 
80,841

 
26,489

 
32.8

Income tax expense
38,622

 
27,678

 
10,944

 
39.5

NET INCOME
68,708

 
53,163

 
15,545

 
29.2

Less: Net income attributable to noncontrolling interests
3,123

 
2,183

 
940

 
43.1

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
65,585

 
$
50,980

 
$
14,605

 
28.6

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.46

 
$
0.38

 
$
0.08

 
21.1

Diluted earnings per common share
$
0.46

 
$
0.38

 
$
0.08

 
21.1

AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
141,993

 
132,395

 
9,598

 
7.2

Diluted
142,311

 
135,540

 
6,771

 
5.0

DIVIDENDS DECLARED PER COMMON SHARE
$
0.38

 
$
0.36

 
$
0.02

 
5.6

Effective income tax rate
36
%
 
34
%
 
 
 
 
nm - not meaningful

WESTAR ENERGY NEWS RELEASE    Page 3 of 3
Exhibit


Exhibit 99.2
Westar Energy, Inc.
First Quarter 2016 Earnings
Released May 3, 2016





Contents
Page
 
 
 
 
 
 











Cody VandeVelde
Director Investor Relations
785-575-8227
cody.vandevelde@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, 2016 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 March 31,
 
2016
 
2015
 
Change
 
% Change
 
(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
 
 
 
 
 
 
 
Residential
$
179,290

 
$
181,294

 
$
(2,004
)
 
(1.1
)
Commercial
165,673

 
161,305

 
4,368

 
2.7

Industrial
100,697

 
96,479

 
4,218

 
4.4

Other retail
(14,381
)
 
539

 
(14,920
)
 
nm

Total Retail Revenues
431,279

 
439,617

 
(8,338
)
 
(1.9
)
Wholesale
67,412

 
86,755

 
(19,343
)
 
(22.3
)
Transmission
63,915

 
58,585

 
5,330

 
9.1

Other
6,844

 
5,850

 
994

 
17.0

Total Revenues
569,450

 
590,807

 
(21,357
)
 
(3.6
)
OPERATING EXPENSES:
 
 
 
 
 
 
 
Fuel and purchased power
100,058

 
155,482

 
(55,424
)
 
(35.6
)
SPP network transmission costs
60,760

 
56,812

 
3,948

 
6.9

Operating and maintenance
77,757

 
85,080

 
(7,323
)
 
(8.6
)
Depreciation and amortization
83,640

 
74,586

 
9,054

 
12.1

Selling, general and administrative
56,456

 
55,418

 
1,038

 
1.9

Taxes other than income tax
48,968

 
37,871

 
11,097

 
29.3

Total Operating Expenses
427,639

 
465,249

 
(37,610
)
 
(8.1
)
INCOME FROM OPERATIONS
141,811

 
125,558

 
16,253

 
12.9

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Investment earnings
2,016

 
2,480

 
(464
)
 
(18.7
)
Other income
9,477

 
2,814

 
6,663

 
236.8

Other expense
(5,543
)
 
(5,713
)
 
170

 
3.0

Total Other Income (Expense)
5,950

 
(419
)
 
6,369

 
nm

Interest expense
40,431

 
44,298

 
(3,867
)
 
(8.7
)
INCOME BEFORE INCOME TAXES
107,330

 
80,841

 
26,489

 
32.8

Income tax expense
38,622

 
27,678

 
10,944

 
39.5

NET INCOME
68,708

 
53,163

 
15,545

 
29.2

Less: Net income attributable to noncontrolling interests
3,123

 
2,183

 
940

 
43.1

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
$
65,585

 
$
50,980

 
$
14,605

 
28.6

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
 
 
 
 
 
 
 
Basic earnings per common share
$
0.46

 
$
0.38

 
$
0.08

 
21.1

Diluted earnings per common share
$
0.46

 
$
0.38

 
$
0.08

 
21.1

AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
 
 
 
 
 
 
 
Basic
141,993

 
132,395

 
9,598

 
7.2

Diluted
142,311

 
135,540

 
6,771

 
5.0

DIVIDENDS DECLARED PER COMMON SHARE
$
0.38

 
$
0.36

 
$
0.02

 
5.6

Effective income tax rate
36
%
 
34
%
 
 
 
 
 
 
 
 
 
 
 
 
nm - not meaningful
 
 
 
 
 
 
 



The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 should be read in conjunction with this financial information.
Page 1


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

 
March 31, 2016
 
December 31, 2015
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
3,471

 
$
3,231

Accounts receivable, net of allowance for doubtful accounts of $6,790 and $5,294, respectively
225,090

 
258,286

Fuel inventory and supplies
301,340

 
301,294

Prepaid expenses
20,271

 
16,864

Regulatory assets
98,368

 
109,606

Other
27,039

 
27,860

Total Current Assets
675,579

 
717,141

PROPERTY, PLANT AND EQUIPMENT, NET
8,675,925

 
8,524,902

PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
265,655

 
268,239

OTHER ASSETS:
 
 
 
Regulatory assets
746,741

 
751,312

Nuclear decommissioning trust
183,455

 
184,057

Other
258,242

 
260,015

Total Other Assets
1,188,438

 
1,195,384

TOTAL ASSETS
$
10,805,597

 
$
10,705,666

LIABILITIES AND EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current maturities of long-term debt
$
125,000

 
$
—

Current maturities of long-term debt of variable interest entities
26,842

 
28,309

Short-term debt
316,800

 
250,300

Accounts payable
230,307

 
220,969

Accrued dividends
52,695

 
49,829

Accrued taxes
128,152

 
83,773

Accrued interest
86,222

 
71,426

Regulatory liabilities
31,461

 
25,697

Other
76,454

 
106,632

Total Current Liabilities
1,073,933

 
836,935

LONG-TERM LIABILITIES:
 
 
 
Long-term debt, net
3,039,239

 
3,163,950

Long-term debt of variable interest entities, net
111,239

 
138,097

Deferred income taxes
1,619,112

 
1,591,430

Unamortized investment tax credits
209,040

 
209,763

Regulatory liabilities
250,545

 
267,114

Accrued employee benefits
456,541

 
462,304

Asset retirement obligations
276,718

 
275,285

Other
82,025

 
88,825

Total Long-Term Liabilities
6,044,459

 
6,196,768

COMMITMENTS AND CONTINGENCIES (See 10-Q Notes 3, 10 and 11)
 
 
 
EQUITY:
 
 
 
Westar Energy, Inc. Shareholders’ Equity:
 
 
 
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 141,628,562 shares and 141,353,426 shares, respective to each date
708,143

 
706,767

Paid-in capital
2,003,311

 
2,004,124

Retained earnings
959,936

 
945,830

Total Westar Energy, Inc. Shareholders’ Equity
3,671,390

 
3,656,721

Noncontrolling Interests
15,815

 
15,242

Total Equity
3,687,205

 
3,671,963

TOTAL LIABILITIES AND EQUITY
$
10,805,597

 
$
10,705,666


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 should be read in conjunction with this financial information.
Page 2


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

 
Three Months Ended March 31,
 
2016
 
2015
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
68,708

 
$
53,163

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
83,640

 
74,586

Amortization of nuclear fuel
8,329

 
4,960

Amortization of deferred regulatory gain from sale leaseback
(1,374
)
 
(1,374
)
Amortization of corporate-owned life insurance
5,261

 
5,747

Non-cash compensation
2,491

 
2,226

Net deferred income taxes and credits
33,984

 
26,573

Allowance for equity funds used during construction
(2,464
)
 
(1,950
)
Changes in working capital items:
 
 
 
Accounts receivable
33,196

 
31,042

Fuel inventory and supplies
109

 
(18,404
)
Prepaid expenses and other
7,712

 
4,638

Accounts payable
(31,158
)
 
17,321

Accrued taxes
49,339

 
40,007

Other current liabilities
(28,984
)
 
(20,327
)
Changes in other assets
21,933

 
(17,034
)
Changes in other liabilities
(11,846
)
 
12,394

Cash Flows from Operating Activities
238,876

 
213,568

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Additions to property, plant and equipment
(220,849
)
 
(187,223
)
Purchase of securities - trusts
(13,712
)
 
(7,345
)
Sale of securities - trusts
16,332

 
7,847

Proceeds from investment in corporate-owned life insurance
23,963

 
1,144

Investment in affiliated company
(655
)
 
—

Other investing activities
(2,840
)
 
(717
)
Cash Flows used in Investing Activities
(197,761
)
 
(186,294
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Short-term debt, net
66,500

 
167,800

Proceeds from long-term debt of variable interest entities
162,048

 
—

Retirements of long-term debt
—

 
(125,000
)
Retirements of long-term debt of variable interest entities
(190,355
)
 
(27,925
)
Repayment of capital leases
(675
)
 
(886
)
Borrowings against cash surrender value of corporate-owned life insurance
963

 
1,045

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(22,837
)
 
(899
)
Issuance of common stock
657

 
8,206

Distributions to shareholders of noncontrolling interests
(2,550
)
 
(1,076
)
Cash dividends paid
(49,665
)
 
(43,787
)
Other financing activities
(4,961
)
 
(3,234
)
Cash Flows used in Financing Activities
(40,875
)
 
(25,756
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
240

 
1,518

CASH AND CASH EQUIVALENTS:
 
 
 
Beginning of period
3,231

 
4,556

End of period
$
3,471

 
$
6,074


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 should be read in conjunction with this financial information.
Page 3


Westar Energy, Inc.
1st Quarter 2016 vs. 2015

Earnings Variances
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
 
 
 
 
 
($ per share)
 
(Dollars in Thousands)
 
 
 
($ per share)
2015 earnings attributable to common stock
 
 
 
$
50,980

 
 
 
$
0.38

 
 
 
 
 
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
 
 
 
 
 
 
 
 
 
Gross Margin
 
 
 
30,119

 
A
 
 
 
Operating and maintenance
 
 
 
7,323

 
B
 
 
 
Depreciation and amortization
 
 
 
(9,054
)
 
C
 
 
 
Selling, general and administrative
 
 
 
(1,038
)
 
 
 
 
 
Taxes other than income tax
 
 
 
(11,097
)
 
D
 
 
 
Other income (expense)
 
 
 
6,369

 
E
 
 
 
Interest expense
 
 
 
3,867

 
F
 
 
 
Income tax expense
 
 
 
(10,944
)
 
G
 
 
 
Net income attributable to noncontrolling interests
 
 
 
(940
)
 
 
 
 
 
Change in shares outstanding
 
(0.03
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016 earnings attributable to common stock
 
 
 
$
65,585

 
 
 
$
0.46

 
 
 
 
 
 
 
 
 
 
 
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A
Due primarily to: general rate case increase of $78.0M (annual); estimated annual transmission margin increase of $22.0M; partially offset by 5.4% decrease in retail MWh sales significantly due to extremely mild winter weather

 
 
 
 
 
 
 
 
 
 
 
B
Due primarily to: lower distribution maintenance expense -- $4.1M; and decrease operating and maintenance expenses resulting from power plant retirements late 2015 -- $2.0M

 
 
 
 
 
 
 
 
 
 
C
Due primarily to property additions

 
 
 
 
 
 
 
 
 
 
D
Due primarily to an increase in property taxes (offset through price adjustments) -- ($11.5M)

 
 
 
 
 
 
 
 
 
 
E
Due primarily to an increase in COLI benefits -- $6.5M

 
 
 
 
 
 
 
 
 
 
F
Due primarily to a decrease in long-term interest expense -- $3.5M

 
 
 
 
 
 
 
 
 
 
G
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, 2016 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,
 
2016
 
2015
 
Change
 
% Change
Revenues
(Dollars In Thousands)
 
 
Residential
$
179,290

 
$
181,294

 
$
(2,004
)
 
(1.1
)
Commercial
165,673

 
161,305

 
4,368

 
2.7

Industrial
100,697

 
96,479

 
4,218

 
4.4

Other retail
3,842

 
3,505

 
337

 
9.6

Provision for rate refunds
(18,223
)
 
(2,966
)
 
(15,257
)
 
(514.4
)
Total Retail Revenues
431,279

 
439,617

 
(8,338
)
 
(1.9
)
Tariff-based wholesale
59,020

 
60,334

 
(1,314
)
 
(2.2
)
Market-based wholesale
8,392

 
26,421

 
(18,029
)
 
(68.2
)
Transmission
63,915

 
58,585

 
5,330

 
9.1

Other
6,844

 
5,850

 
994

 
17.0

Total Revenues
$
569,450

 
$
590,807

 
$
(21,357
)
 
(3.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity Sales
(Thousands of MWh)
 
 
Residential
1,397

 
1,554

 
(157
)
 
(10.1
)
Commercial
1,659

 
1,731

 
(72
)
 
(4.2
)
Industrial
1,302

 
1,324

 
(22
)
 
(1.7
)
Other retail
20

 
20

 
—

 
—

Total Retail
4,378

 
4,629

 
(251
)
 
(5.4
)
Tariff-based wholesale
995

 
1,284

 
(289
)
 
(22.5
)
Market-based wholesale
880

 
1,287

 
(407
)
 
(31.6
)
Total wholesale
1,875

 
2,571

 
(696
)
 
(27.1
)
Total Electricity Sales
6,253

 
7,200

 
(947
)
 
(13.2
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
 
 
Total retail
$
98.51

 
$
94.97

 
$
3.54

 
3.7

Tariff-based wholesale
$
59.32

 
$
46.99

 
$
12.33

 
26.2

Market-based wholesale
$
9.54

 
$
20.53

 
$
(10.99
)
 
(53.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel and Purchased Power
(Dollars In Thousands)
 
 
Fuel used for generation
$
81,639

 
$
108,248

 
$
(26,609
)
 
(24.6
)
Purchased power
38,830

 
45,527

 
(6,697
)
 
(14.7
)
Subtotal
120,469

 
153,775

 
(33,306
)
 
(21.7
)
RECA recovery and other
(20,411
)
 
1,707

 
(22,118
)
 
nm

Total fuel and purchased power expense
$
100,058

 
$
155,482

 
$
(55,424
)
 
(35.6
)
 
 
 
 
 
 
 
 
Electricity Supply
(Thousands of MWh)
 
 
Generated - Gas
225

 
312

 
(87
)
 
(27.9
)
                    Coal
3,288

 
4,452

 
(1,164
)
 
(26.1
)
                    Nuclear
1,252

 
794

 
458

 
57.7

                    Wind
122

 
106

 
16

 
15.1

Subtotal electricity generated
4,887

 
5,664

 
(777
)
 
(13.7
)
Purchased
1,585

 
1,324

 
261

 
19.7

Total Electricity Supply
6,472

 
6,988

 
(516
)
 
(7.4
)
 
 
 
 
 
 
 
 
 
(Dollars per MWh)
 
 
Average cost of fuel used for generation
$
16.71

 
$
19.11

 
$
(2.40
)
 
(12.6
)
Average cost of purchased power
$
24.50

 
$
34.39

 
$
(9.89
)
 
(28.8
)
Average cost of fuel and purchased power
$
18.61

 
$
22.01

 
$
(3.40
)
 
(15.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Degree Days
 
 
2015/
 
 
 
 
 
2016
 
20 yr Avg
 
 Change
 
 % Change
Cooling
 
 
 
 
 
 
 
Actual compared to last year
4

 
1

 
3

 
300.0

Actual compared to 20 year average
4

 
2

 
2

 
100.0

Heating
 
 
 
 
 
 
 
Actual compared to last year
2,081

 
2,433

 
(352
)
 
(14.5
)
Actual compared to 20 year average
2,081

 
2,429

 
(348
)
 
(14.3
)
nm - not meaningful

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 should be read in conjunction with this financial information.
Page 5



Westar Energy, Inc.
Capitalization
 
 
March 31, 2016
 
 
 
December 31, 2015
 
 
 
 
(Dollars in Thousands)
 
 
Current maturities of long-term debt
 
$
125,000

 
 
 
$
—

 
 
Current maturities of long-term debt of VIEs
 
26,842

 
 
 
28,309

 
 
Long-term debt, net
 
3,039,239

 
 
 
3,163,950

 
 
Long-term debt of variable interest entities, net
 
111,239

 
 
 
138,097

 
 
Total long-term debt
 
3,302,320

 
47.3
%
 
3,330,356

 
47.6
%
Common equity
 
3,671,390

 
52.5
%
 
3,656,721

 
52.2
%
Noncontrolling interests
 
15,815

 
0.2
%
 
15,242

 
0.2
%
Total capitalization
 
$
6,989,525

 
100.0
%
 
$
7,002,319

 
100.0
%
 
 
 
 
 
 
 
 
 
GAAP Book value per share
 
$
25.92

 
 
 
$
25.87

 


Period end shares outstanding (in thousands)
 
141,629

 
 
 
141,353

 
 
 
 
 
 
 
 
 
 
 
Outstanding Long-Term Debt
 
 
 
 
 
 
 
 
 
 
CUSIP
March 31, 2016
 
 
 
December 31, 2015
 
 
Westar Energy:
 
(Dollars in Thousands)
 
 
First Mortgage Bond series:
 
 
 
 
 
 
 
 
5.15% Series due January 2017
95709TAB6
$
125,000

 
 
 
$
125,000

 
 
5.10% Series due July 2020
95709TAD2
250,000

 
 
 
250,000

 
 
3.250% Series due December 2025
95709TAL4
250,000

 
 
 
250,000

 
 
4.125% Series due March 2042
95709TAH3
550,000

 
 
 
550,000

 
 
4.10% Series due April 2043
95709TAJ9
430,000

 
 
 
430,000

 
 
4.625% Series due September 2043
95709TAK6
250,000

 
 
 
250,000

 
 
4.250% Series due December 2045
95709TAM2
300,000

 
 
 
300,000

 
 
 
 
2,155,000

 
 
 
2,155,000

 
 
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
 
2,230,500

 
 
 
2,230,500

 
 
 
 
 
 
 
 
 
 
 
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

 
 
4.3% Series due July 2044
485260BM4
250,000

 
 
 
250,000

 
 
 
 
875,000

 
 
 
875,000

 
 
Pollution control bond series:
 
 
 
 
 
 
 
 
Variable rate series due April 2027 (LaCygne)
502828AJ5
21,940

 
 
 
21,940

 
 
4.85% Series due June 2031
121825CB7
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

 
 
 
 
96,440

 
 

96,440

 
 
Total KGE
 
971,440

 
 
 
971,440

 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
 
3,201,940

 
 
 
3,201,940

 
 
Unamortized debt discount
 
(10,252
)
 
 
 
(10,374
)
 
 
Unamortized debt issuance expense
 
(27,449
)
 
 
 
(27,616
)
 
 
Long-term debt due within one year
 
(125,000
)
 
 
 
—

 
 
Total long-term debt, net
 
$
3,039,239

 
 
 
$
3,163,950

 
 

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 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.

The calculations of gross margin for the three months ended March 31, 2016 and 2015 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 March 31,
 
2016
 
2015
 
Change
 
(Dollars in Thousands)
Revenues
$
569,450

 
$
590,807


$
(21,357
)
Less: Fuel and purchased power expense
100,058

 
155,482

 
(55,424
)
 SPP network transmission costs
60,760

 
56,812

 
3,948

Gross Margin
$
408,632


$
378,513


$
30,119

 
 
 
 
 
 
Gross margin
$
408,632

 
$
378,513

 
$
30,119

Less: Operating and maintenance expense
77,757

 
85,080

 
(7,323
)
Depreciation and amortization expense
83,640

 
74,586

 
9,054

Selling, general and administrative expense
56,456

 
55,418

 
1,038

Taxes other than income tax
48,968

 
37,871

 
11,097

Income from operations
$
141,811

 
$
125,558


$
16,253

 
 
 
 
 
 
 
 
 
 
 
 


The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended March 31, 2016 should be read in conjunction with this financial information.
Page 7