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) |
WESTAR ENERGY, INC. | ||||||
Date: | February 21, 2018 | By: | /s/ Larry D. Irick | |||
Name: | Larry D. Irick | |||||
Title: | Vice President, General Counsel and Corporate Secretary |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||||||||||||||||||||
2017 | 2016 | Change | % Change | 2017 | 2016 | Change | % Change | ||||||||||||||||||||
(In Thousands, Except Per Share Amounts) | |||||||||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||||
Residential | $ | 178,773 | $ | 174,598 | $ | 4,175 | 2.4 | $ | 821,222 | $ | 838,998 | $ | (17,776 | ) | (2.1) | ||||||||||||
Commercial | 172,511 | 168,819 | 3,692 | 2.2 | 729,743 | 741,066 | (11,323 | ) | (1.5) | ||||||||||||||||||
Industrial | 99,393 | 98,575 | 818 | 0.8 | 423,620 | 413,298 | 10,322 | 2.5 | |||||||||||||||||||
Other retail | (6,258 | ) | 7,989 | (14,247 | ) | (178.3) | (28,551 | ) | (15,013 | ) | (13,538 | ) | (90.2) | ||||||||||||||
Total Retail Revenues | 444,419 | 449,981 | (5,562 | ) | (1.2) | 1,946,034 | 1,978,349 | (32,315 | ) | (1.6) | |||||||||||||||||
Wholesale | 70,418 | 84,351 | (13,933 | ) | (16.5) | 312,942 | 304,871 | 8,071 | 2.6 | ||||||||||||||||||
Transmission | 70,348 | 64,717 | 5,631 | 8.7 | 279,446 | 253,713 | 25,733 | 10.1 | |||||||||||||||||||
Other | 9,596 | 7,486 | 2,110 | 28.2 | 32,581 | 25,154 | 7,427 | 29.5 | |||||||||||||||||||
Total Revenues | 594,781 | 606,535 | (11,754 | ) | (1.9) | 2,571,003 | 2,562,087 | 8,916 | 0.3 | ||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||
Fuel and purchased power | 126,086 | 135,135 | (9,049 | ) | (6.7) | 541,535 | 509,496 | 32,039 | 6.3 | ||||||||||||||||||
SPP network transmission costs | 62,867 | 58,838 | 4,029 | 6.8 | 247,882 | 232,763 | 15,119 | 6.5 | |||||||||||||||||||
Operating and maintenance | 85,711 | 96,178 | (10,467 | ) | (10.9) | 333,923 | 346,313 | (12,390 | ) | (3.6) | |||||||||||||||||
Depreciation and amortization | 94,424 | 85,681 | 8,743 | 10.2 | 371,747 | 338,519 | 33,228 | 9.8 | |||||||||||||||||||
Selling, general and administrative | 67,202 | 68,689 | (1,487 | ) | (2.2) | 249,567 | 261,451 | (11,884 | ) | (4.5) | |||||||||||||||||
Taxes other than income tax | 41,209 | 46,133 | (4,924 | ) | (10.7) | 167,630 | 191,662 | (24,032 | ) | (12.5) | |||||||||||||||||
Total Operating Expenses | 477,499 | 490,654 | (13,155 | ) | (2.7) | 1,912,284 | 1,880,204 | 32,080 | 1.7 | ||||||||||||||||||
INCOME FROM OPERATIONS | 117,282 | 115,881 | 1,401 | 1.2 | 658,719 | 681,883 | (23,164 | ) | (3.4) | ||||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||||
Investment earnings | 2,309 | 2,097 | 212 | 10.1 | 10,693 | 9,013 | 1,680 | 18.6 | |||||||||||||||||||
Other income | 2,679 | 8,369 | (5,690 | ) | (68.0) | 8,351 | 34,582 | (26,231 | ) | (75.9) | |||||||||||||||||
Other expense | (4,600 | ) | (3,672 | ) | (928 | ) | (25.3) | (19,055 | ) | (18,012 | ) | (1,043 | ) | (5.8) | |||||||||||||
Total Other Income (Expense) | 388 | 6,794 | (6,406 | ) | (94.3) | (11 | ) | 25,583 | (25,594 | ) | (100.0) | ||||||||||||||||
Interest expense | 42,768 | 40,715 | 2,053 | 5.0 | 171,001 | 161,726 | 9,275 | 5.7 | |||||||||||||||||||
INCOME BEFORE INCOME TAXES | 74,902 | 81,960 | (7,058 | ) | (8.6) | 487,707 | 545,740 | (58,033 | ) | (10.6) | |||||||||||||||||
Income tax expense | 38,596 | 24,165 | 14,431 | 59.7 | 151,155 | 184,540 | (33,385 | ) | (18.1) | ||||||||||||||||||
NET INCOME | 36,306 | 57,795 | (21,489 | ) | (37.2) | 336,552 | 361,200 | (24,648 | ) | (6.8) | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | 2,418 | 3,863 | (1,445 | ) | (37.4) | 12,632 | 14,623 | (1,991 | ) | (13.6) | |||||||||||||||||
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | 33,888 | 53,932 | (20,044 | ) | (37.2) | 323,920 | 346,577 | (22,657 | ) | (6.5) | |||||||||||||||||
Earnings per common share, basic | $ | 0.24 | $ | 0.38 | $ | (0.14 | ) | (36.8) | $ | 2.27 | $ | 2.43 | $ | (0.16 | ) | (6.6) | |||||||||||
Average equivalent common shares outstanding | 142,479 | 142,152 | 327 | 0.2 | 142,464 | 142,068 | 396 | 0.3 | |||||||||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.40 | $ | 0.38 | $ | 0.02 | 5.3 | $ | 1.60 | $ | 1.52 | $ | 0.08 | 5.3 | |||||||||||||
Effective income tax rate | 52 | % | 29 | % | 31 | % | 34 | % |
Three Months Ended December 31, | ||||||||||||||
2017 | 2016 | Change | % Change | |||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||
REVENUES: | ||||||||||||||
Residential | $ | 178,773 | $ | 174,598 | $ | 4,175 | 2.4 | |||||||
Commercial | 172,511 | 168,819 | 3,692 | 2.2 | ||||||||||
Industrial | 99,393 | 98,575 | 818 | 0.8 | ||||||||||
Other retail | (6,258 | ) | 7,989 | (14,247 | ) | (178.3 | ) | |||||||
Total Retail Revenues | 444,419 | 449,981 | (5,562 | ) | (1.2 | ) | ||||||||
Wholesale | 70,418 | 84,351 | (13,933 | ) | (16.5 | ) | ||||||||
Transmission | 70,348 | 64,717 | 5,631 | 8.7 | ||||||||||
Other | 9,596 | 7,486 | 2,110 | 28.2 | ||||||||||
Total Revenues | 594,781 | 606,535 | (11,754 | ) | (1.9 | ) | ||||||||
OPERATING EXPENSES: | ||||||||||||||
Fuel and purchased power | 126,086 | 135,135 | (9,049 | ) | (6.7 | ) | ||||||||
SPP network transmission costs | 62,867 | 58,838 | 4,029 | 6.8 | ||||||||||
Operating and maintenance | 85,711 | 96,178 | (10,467 | ) | (10.9 | ) | ||||||||
Depreciation and amortization | 94,424 | 85,681 | 8,743 | 10.2 | ||||||||||
Selling, general and administrative | 67,202 | 68,689 | (1,487 | ) | (2.2 | ) | ||||||||
Taxes other than income | 41,209 | 46,133 | (4,924 | ) | (10.7 | ) | ||||||||
Total Operating Expenses | 477,499 | 490,654 | (13,155 | ) | (2.7 | ) | ||||||||
INCOME FROM OPERATIONS | 117,282 | 115,881 | 1,401 | 1.2 | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||
Investment earnings | 2,309 | 2,097 | 212 | 10.1 | ||||||||||
Other income | 2,679 | 8,369 | (5,690 | ) | (68.0 | ) | ||||||||
Other expense | (4,600 | ) | (3,672 | ) | (928 | ) | (25.3 | ) | ||||||
Total Other Income | 388 | 6,794 | (6,406 | ) | (94.3 | ) | ||||||||
Interest expense | 42,768 | 40,715 | 2,053 | 5.0 | ||||||||||
INCOME BEFORE INCOME TAXES | 74,902 | 81,960 | (7,058 | ) | (8.6 | ) | ||||||||
Income tax expense | 38,596 | 24,165 | 14,431 | 59.7 | ||||||||||
NET INCOME | 36,306 | 57,795 | (21,489 | ) | (37.2 | ) | ||||||||
Less: Net income attributable to noncontrolling interests | 2,418 | 3,863 | (1,445 | ) | (37.4 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | $ | 33,888 | $ | 53,932 | $ | (20,044 | ) | (37.2 | ) | |||||
Earnings per common share, basic | $ | 0.24 | $ | 0.38 | $ | (0.14 | ) | (36.8 | ) | |||||
Diluted earnings per common share | $ | 0.24 | $ | 0.38 | $ | (0.14 | ) | (36.8 | ) | |||||
Weighted average equivalent common shares outstanding – basic (in thousands) | 142,479 | 142,152 | 327 | 0.2 | ||||||||||
Weighted average equivalent common shares outstanding – diluted (in thousands) | 142,585 | 142,659 | (74 | ) | (0.1 | ) | ||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.40 | $ | 0.38 | $ | 0.02 | 5.3 | |||||||
Effective income tax rate | 52 | % | 29 | % | ||||||||||
Twelve Months Ended December 31, | ||||||||||||||
2017 | 2016 | Change | % Change | |||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||
REVENUES: | ||||||||||||||
Residential | $ | 821,222 | $ | 838,998 | $ | (17,776 | ) | (2.1 | ) | |||||
Commercial | 729,743 | 741,066 | (11,323 | ) | (1.5 | ) | ||||||||
Industrial | 423,620 | 413,298 | 10,322 | 2.5 | ||||||||||
Other retail | (28,551 | ) | (15,013 | ) | (13,538 | ) | (90.2 | ) | ||||||
Total Retail Revenues | 1,946,034 | 1,978,349 | (32,315 | ) | (1.6 | ) | ||||||||
Wholesale | 312,942 | 304,871 | 8,071 | 2.6 | ||||||||||
Transmission | 279,446 | 253,713 | 25,733 | 10.1 | ||||||||||
Other | 32,581 | 25,154 | 7,427 | 29.5 | ||||||||||
Total Revenues | 2,571,003 | 2,562,087 | 8,916 | 0.3 | ||||||||||
OPERATING EXPENSES: | ||||||||||||||
Fuel and purchased power | 541,535 | 509,496 | 32,039 | 6.3 | ||||||||||
SPP network transmission costs | 247,882 | 232,763 | 15,119 | 6.5 | ||||||||||
Operating and maintenance | 333,923 | 346,313 | (12,390 | ) | (3.6 | ) | ||||||||
Depreciation and amortization | 371,747 | 338,519 | 33,228 | 9.8 | ||||||||||
Selling, general and administrative | 249,567 | 261,451 | (11,884 | ) | (4.5 | ) | ||||||||
Taxes other than income | 167,630 | 191,662 | (24,032 | ) | (12.5 | ) | ||||||||
Total Operating Expenses | 1,912,284 | 1,880,204 | 32,080 | 1.7 | ||||||||||
INCOME FROM OPERATIONS | 658,719 | 681,883 | (23,164 | ) | (3.4 | ) | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||
Investment earnings | 10,693 | 9,013 | 1,680 | 18.6 | ||||||||||
Other income | 8,351 | 34,582 | (26,231 | ) | (75.9 | ) | ||||||||
Other expense | (19,055 | ) | (18,012 | ) | (1,043 | ) | (5.8 | ) | ||||||
Total Other Income | (11 | ) | 25,583 | (25,594 | ) | (100.0 | ) | |||||||
Interest expense | 171,001 | 161,726 | 9,275 | 5.7 | ||||||||||
INCOME BEFORE INCOME TAXES | 487,707 | 545,740 | (58,033 | ) | (10.6 | ) | ||||||||
Income tax expense | 151,155 | 184,540 | (33,385 | ) | (18.1 | ) | ||||||||
NET INCOME | 336,552 | 361,200 | (24,648 | ) | (6.8 | ) | ||||||||
Less: Net income attributable to noncontrolling interests | 12,632 | 14,623 | (1,991 | ) | (13.6 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | $ | 323,920 | $ | 346,577 | $ | (22,657 | ) | (6.5 | ) | |||||
Earnings per common share, basic | $ | 2.27 | $ | 2.43 | $ | (0.16 | ) | (6.6 | ) | |||||
Diluted earnings per common share | $ | 2.27 | $ | 2.43 | $ | (0.16 | ) | (6.6 | ) | |||||
Weighted average equivalent common shares outstanding – basic (in thousands) | 142,464 | 142,068 | 396 | 0.3 | ||||||||||
Weighted average equivalent common shares outstanding – diluted (in thousands) | 142,560 | 142,475 | $ | 85 | 0.1 | |||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | 1.60 | $ | 1.52 | $ | 0.08 | 5.3 | |||||||
Effective income tax rate | 31 | % | 34 | % | ||||||||||
December 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 3,432 | $ | 3,066 | |||
Accounts receivable, net of allowance for doubtful accounts of $6,716 and $6,667, respectively | 290,652 | 288,579 | |||||
Fuel inventory and supplies | 293,562 | 300,125 | |||||
Taxes receivable | — | 13,000 | |||||
Prepaid expenses | 16,425 | 16,528 | |||||
Regulatory assets | 99,544 | 117,383 | |||||
Other | 23,435 | 29,701 | |||||
Total Current Assets | 727,050 | 768,382 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 9,553,755 | 9,248,359 | |||||
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET | 176,279 | 257,904 | |||||
OTHER ASSETS: | |||||||
Regulatory assets | 685,355 | 762,479 | |||||
Nuclear decommissioning trust | 237,102 | 200,122 | |||||
Other | 244,827 | 249,828 | |||||
Total Other Assets | 1,167,284 | 1,212,429 | |||||
TOTAL ASSETS | $ | 11,624,368 | $ | 11,487,074 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of long-term debt | $ | — | $ | 125,000 | |||
Current maturities of long-term debt of variable interest entities | 28,534 | 26,842 | |||||
Short-term debt | 275,700 | 366,700 | |||||
Accounts payable | 204,186 | 220,522 | |||||
Accrued dividends | 53,830 | 52,885 | |||||
Accrued taxes | 87,727 | 85,729 | |||||
Accrued interest | 72,693 | 72,519 | |||||
Regulatory liabilities | 11,602 | 15,760 | |||||
Other | 89,445 | 81,236 | |||||
Total Current Liabilities | 823,717 | 1,047,193 | |||||
LONG-TERM LIABILITIES: | |||||||
Long-term debt, net | 3,687,555 | 3,388,670 | |||||
Long-term debt of variable interest entities, net | 81,433 | 111,209 | |||||
Deferred income taxes | 815,743 | 1,752,776 | |||||
Unamortized investment tax credits | 257,093 | 210,654 | |||||
Regulatory liabilities | 1,093,974 | 223,693 | |||||
Accrued employee benefits | 541,364 | 512,412 | |||||
Asset retirement obligations | 379,989 | 323,951 | |||||
Other | 83,063 | 83,326 | |||||
Total Long-Term Liabilities | 6,940,214 | 6,606,691 | |||||
COMMITMENTS AND CONTINGENCIES (See Notes 14 and 16) | |||||||
EQUITY: | |||||||
Westar Energy, Inc. Shareholders’ Equity: | |||||||
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 142,094,275 shares and 141,791,153 shares, respective to each date | 710,471 | 708,956 | |||||
Paid-in capital | 2,024,396 | 2,018,317 | |||||
Retained earnings | 1,173,255 | 1,078,602 | |||||
Total Westar Energy, Inc. Shareholders’ Equity | 3,908,122 | 3,805,875 | |||||
Noncontrolling Interests | (47,685 | ) | 27,315 | ||||
Total Equity | 3,860,437 | 3,833,190 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 11,624,368 | $ | 11,487,074 |
Twelve Months Ended December 31, | |||||||
2017 | 2016 | ||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | |||||||
Net income | $ | 336,552 | $ | 361,200 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 371,747 | 338,519 | |||||
Amortization of nuclear fuel | 32,167 | 26,714 | |||||
Amortization of deferred regulatory gain from sale leaseback | (5,495 | ) | (5,495 | ) | |||
Gain on lease modification | (3,500 | ) | — | ||||
Amortization of corporate-owned life insurance | 20,601 | 18,042 | |||||
Non-cash compensation | 8,985 | 9,353 | |||||
Net deferred income taxes and credits | 149,568 | 185,229 | |||||
Allowance for equity funds used during construction | (1,996 | ) | (11,630 | ) | |||
Payments for asset retirement obligations | (16,026 | ) | (5,372 | ) | |||
Changes in working capital items: | |||||||
Accounts receivable | (2,073 | ) | (30,294 | ) | |||
Fuel inventory and supplies | 7,182 | 1,790 | |||||
Prepaid expenses and other | 64,744 | (7,431 | ) | ||||
Accounts payable | 10,023 | (8,149 | ) | ||||
Accrued taxes | 9,155 | (5,942 | ) | ||||
Other current liabilities | (118,018 | ) | (86,359 | ) | |||
Changes in other assets | 29,295 | 18,872 | |||||
Changes in other liabilities | 19,527 | 23,373 | |||||
Cash Flows from Operating Activities | 912,438 | 822,420 | |||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | |||||||
Additions to property, plant and equipment | (764,645 | ) | (1,086,970 | ) | |||
Purchase of securities - trust | (41,033 | ) | (46,581 | ) | |||
Sale of securities - trust | 41,245 | 47,026 | |||||
Investment in corporate-owned life insurance | (13,875 | ) | (14,648 | ) | |||
Proceeds from investment in corporate-owned life insurance | 1,420 | 92,677 | |||||
Investment in affiliated company | — | (655 | ) | ||||
Other investing activities | (3,546 | ) | (3,609 | ) | |||
Cash Flows used in Investing Activities | (780,434 | ) | (1,012,760 | ) | |||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | |||||||
Short-term debt, net | (91,328 | ) | 116,162 | ||||
Proceeds from long-term debt | 296,215 | 396,290 | |||||
Proceeds from long-term debt of variable interest entities | — | 162,048 | |||||
Retirements of long-term debt | (125,000 | ) | (50,000 | ) | |||
Retirements of long-term debt of variable interest entities | (26,840 | ) | (190,357 | ) | |||
Repayment of capital leases | (3,530 | ) | (3,104 | ) | |||
Borrowings against cash surrender value of corporate-owned life insurance | 55,094 | 57,850 | |||||
Repayment of borrowings against cash surrender value of corporate-owned life insurance | (1,008 | ) | (89,284 | ) | |||
Issuance of common stock | 659 | 2,439 | |||||
Distributions to shareholders of noncontrolling interests | (5,760 | ) | (2,550 | ) | |||
Cash dividends paid | (223,117 | ) | (204,340 | ) | |||
Other financing activities | (7,023 | ) | (4,979 | ) | |||
Cash Flows (used in) from Financing Activities | (131,638 | ) | 190,175 | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 366 | (165 | ) | ||||
CASH AND CASH EQUIVALENTS: | |||||||
Beginning of period | 3,066 | 3,231 | |||||
End of period | $ | 3,432 | $ | 3,066 |
Earnings Variances | ||||||||||||||
Change | ||||||||||||||
($ per share) | (Dollars in Thousands) | ($ per share) | ||||||||||||
2016 earnings attributable to common stock | $ | 53,932 | $ | 0.38 | ||||||||||
Favorable/(Unfavorable) | ||||||||||||||
Gross Margin | (6,734 | ) | A | |||||||||||
Operating and maintenance | 10,467 | B | ||||||||||||
Depreciation and amortization | (8,743 | ) | C | |||||||||||
Selling, general and administrative | 1,487 | |||||||||||||
Taxes other than income taxes | 4,924 | D | ||||||||||||
Other income (expense) | (6,406 | ) | E | |||||||||||
Interest expense | (2,053 | ) | ||||||||||||
Income tax expense | (14,431 | ) | F | |||||||||||
Net income attributable to noncontrolling interests | 1,445 | |||||||||||||
Change in shares outstanding | — | |||||||||||||
2017 earnings attributable to common stock | $ | 33,888 | $ | 0.24 | ||||||||||
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable) | ||||||||||||||
A | Due primarily to decreased property tax surcharge revenue, which is offset by lower property tax amortization expense | |||||||||||||
B | Due primarily to: lower operating and maintenance costs at our coal fired plants primarily due to planned JEC outage in 2016 -- $6.5M; lower transmission and distribution operating and maintenance costs due in part to higher grid resiliency costs in 2016 and assisting other utilities with mutual aid -- $6.1M; partially offset by higher operating expense due to start of Western Plains Wind Farm -- ($2.6M) | |||||||||||||
C | Due principally to property additions from completion of Western Plains Wind Farm in March 2017 | |||||||||||||
D | Due primarily to decreased property tax amortization expense that is largely offset by decreased prices --$5.3M | |||||||||||||
E | Due primarily to: lower COLI benefit -- ($2.8M); a decrease in equity AFUDC -- ($2.8M) | |||||||||||||
F | Due primarily to write-off of excess non-regulated deferred income tax assets due to the TCJA -- ($12.2M) | |||||||||||||
Earnings Variances | ||||||||||||||
Change | ||||||||||||||
($ per share) | (Dollars in Thousands) | ($ per share) | ||||||||||||
2016 earnings attributable to common stock | $ | 346,577 | $ | 2.43 | ||||||||||
Favorable/(Unfavorable) | ||||||||||||||
Gross Margin | (38,242 | ) | A | |||||||||||
Operating and maintenance | 12,390 | B | ||||||||||||
Depreciation and amortization | (33,228 | ) | C | |||||||||||
Selling, general and administrative | 11,884 | D | ||||||||||||
Taxes other than income | 24,032 | E | ||||||||||||
Other income (expense) | (25,594 | ) | F | |||||||||||
Interest expense | (9,275 | ) | G | |||||||||||
Income tax expense | 33,385 | H | ||||||||||||
Net income attributable to noncontrolling interests | 1,991 | |||||||||||||
Change in shares outstanding | — | |||||||||||||
2017 earnings attributable to common stock | $ | 323,920 | $ | 2.27 | ||||||||||
Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable) | ||||||||||||||
A | Due primarily to lower residential and commercial sales primarily attributable to mild weather; partially offset by increased industrial sales, lower property tax surcharge revenue, which is offset by lower property tax amortization expense, and lower tariff-based wholesale revenue | |||||||||||||
B | Due primarily to: lower transmission and distribution operating and maintenance costs due in part to higher grid resiliency costs in 2016 and assisting other utilities with mutual aid -- $8.6M; a decrease in nuclear operating and maintenance costs primarily due to offset from receipt of legal settlement proceeds at Wolf Creek -- $5.8M; lower operating and maintenance costs at our coal fired plants primarily due to planned JEC outage in 2016 -- $4.9M; partially offset by higher operating expense due to start of Western Plains Wind Farm -- ($8.8M) | |||||||||||||
C | Due principally to property additions from completion of Western Plains Wind Farm in March 2017 | |||||||||||||
D | Due primarily to recording less variable employee compensation -- $7.1M | |||||||||||||
E | Due primarily to decreased property tax amortization expense that is largely offset by decreased prices -- $24.2M | |||||||||||||
F | Due primarily to: lower COLI benefit -- ($19.5M); a decrease in equity AFUDC -- ($9.6M); partially offset by deconsolidation of the trust holding our 8% interest in JEC -- $3.5 | |||||||||||||
G | Due primarily to: an increase in interest expense of long-term debt primarily from the issuances of FMBs in excess of retirements -- ($4.9M); decrease in debt AFUDC -- ($4.4M) | |||||||||||||
H | Due primarily to; an increase in production tax credits largely from Western Plains Wind Farm - $24.0M; reduction in income tax expense from lower income before income tax -- $22.9M; partially offset by write-off of excess unregulated deferred income tax assets due to the TCJA -- ($12.2M) |
Supplemental Data | Three Months Ended December 31, | |||||||||||||
2017 | 2016 | Change | % Change | |||||||||||
Revenues | (Dollars In Thousands) | |||||||||||||
Residential | $ | 178,773 | $ | 174,598 | $ | 4,175 | 2.4 | |||||||
Commercial | 172,511 | 168,819 | 3,692 | 2.2 | ||||||||||
Industrial | 99,393 | 98,575 | 818 | 0.8 | ||||||||||
Other retail | 4,035 | 3,923 | 112 | 2.9 | ||||||||||
Provision for rate refunds | (10,293 | ) | 4,066 | (14,359 | ) | (353.1 | ) | |||||||
Total Retail Revenues | 444,419 | 449,981 | (5,562 | ) | (1.2 | ) | ||||||||
Tariff-based wholesale | 54,680 | 63,141 | (8,461 | ) | (13.4 | ) | ||||||||
Market-based wholesale | 15,738 | 21,210 | (5,472 | ) | (25.8 | ) | ||||||||
Transmission | 70,348 | 64,717 | 5,631 | 8.7 | ||||||||||
Other | 9,596 | 7,486 | 2,110 | 28.2 | ||||||||||
Total Revenues | $ | 594,781 | $ | 606,535 | $ | (11,754 | ) | (1.9 | ) | |||||
Electricity Sales | (Thousands of MWh) | |||||||||||||
Residential | 1,336 | 1,337 | (1 | ) | (0.1 | ) | ||||||||
Commercial | 1,780 | 1,780 | — | — | ||||||||||
Industrial | 1,370 | 1,361 | 9 | 0.7 | ||||||||||
Other retail | 16 | 19 | (3 | ) | (15.8 | ) | ||||||||
Total Retail | 4,502 | 4,497 | 5 | 0.1 | ||||||||||
Tariff-based wholesale | 952 | 1,100 | (148 | ) | (13.5 | ) | ||||||||
Market-based wholesale | 1,781 | 1,239 | 542 | 43.7 | ||||||||||
Total wholesale | 2,733 | 2,339 | 394 | 16.8 | ||||||||||
Total Electricity Sales | 7,235 | 6,836 | 399 | 5.8 | ||||||||||
(Dollars per MWh) | ||||||||||||||
Total retail | $ | 98.72 | $ | 100.06 | $ | (1.34 | ) | (1.3 | ) | |||||
Tariff-based wholesale | $ | 57.44 | $ | 57.40 | $ | 0.04 | 0.1 | |||||||
Market-based wholesale | $ | 8.84 | $ | 17.12 | $ | (8.28 | ) | (48.4 | ) | |||||
Fuel and Purchased Power | (Dollars In Thousands) | |||||||||||||
Fuel used for generation | $ | 95,989 | $ | 98,206 | $ | (2,217 | ) | (2.3 | ) | |||||
Purchased power | 40,093 | 47,430 | (7,337 | ) | (15.5 | ) | ||||||||
Subtotal | 136,082 | 145,636 | (9,554 | ) | (6.6 | ) | ||||||||
RECA recovery and other | (9,996 | ) | (10,501 | ) | 505 | 4.8 | ||||||||
Total fuel and purchased power expense | $ | 126,086 | $ | 135,135 | $ | (9,049 | ) | (6.7 | ) | |||||
Electricity Supply | (Thousands of MWh) | |||||||||||||
Generated - Gas | 385 | 397 | (12 | ) | (3.0 | ) | ||||||||
Coal | 3,472 | 3,988 | (516 | ) | (12.9 | ) | ||||||||
Nuclear | 1,270 | 542 | 728 | 134.3 | ||||||||||
Wind | 422 | 115 | 307 | 267.0 | ||||||||||
Subtotal electricity generated | 5,549 | 5,042 | 507 | 10.1 | ||||||||||
Purchased | 1,878 | 1,923 | (45 | ) | (2.3 | ) | ||||||||
Total Electricity Supply | 7,427 | 6,965 | 462 | 6.6 | ||||||||||
(Dollars per MWh) | ||||||||||||||
Average cost of fuel used for generation | $ | 17.30 | $ | 19.48 | $ | (2.18 | ) | (11.2 | ) | |||||
Average cost of purchased power | $ | 21.35 | $ | 24.66 | $ | (3.31 | ) | (13.4 | ) | |||||
Average cost of fuel and purchased power | $ | 18.32 | $ | 20.91 | $ | (2.59 | ) | (12.4 | ) | |||||
Degree Days | 2016/ | |||||||||||||
2017 | 20 yr Avg | Change | % Change | |||||||||||
Cooling | ||||||||||||||
Actual compared to last year | 69 | 97 | (28 | ) | (28.9 | ) | ||||||||
Actual compared to 20 year average | 69 | 39 | 30 | 76.9 | ||||||||||
Heating | ||||||||||||||
Actual compared to last year | 1,654 | 1,498 | 156 | 10.4 | ||||||||||
Actual compared to 20 year average | 1,654 | 1,808 | (154 | ) | (8.5 | ) | ||||||||
Supplemental Data | Twelve Months Ended December 31, | |||||||||||||
2017 | 2016 | Change | % Change | |||||||||||
Revenues | (Dollars In Thousands) | |||||||||||||
Residential | $ | 821,222 | $ | 838,998 | $ | (17,776 | ) | (2.1 | ) | |||||
Commercial | 729,743 | 741,066 | (11,323 | ) | (1.5 | ) | ||||||||
Industrial | 423,620 | 413,298 | 10,322 | 2.5 | ||||||||||
Other retail | 16,673 | 15,683 | 990 | 6.3 | ||||||||||
Provision for rate refunds | (45,224 | ) | (30,696 | ) | (14,528 | ) | (47.3 | ) | ||||||
Total Retail Revenues | 1,946,034 | 1,978,349 | (32,315 | ) | (1.6 | ) | ||||||||
Tariff-based wholesale | 232,834 | 249,344 | (16,510 | ) | (6.6 | ) | ||||||||
Market-based wholesale | 80,108 | 55,527 | 24,581 | 44.3 | ||||||||||
Transmission | 279,446 | 253,713 | 25,733 | 10.1 | ||||||||||
Other | 32,581 | 25,154 | 7,427 | 29.5 | ||||||||||
Total Revenues | $ | 2,571,003 | $ | 2,562,087 | $ | 8,916 | 0.3 | |||||||
Electricity Sales | (Thousands of MWh) | |||||||||||||
Residential | 6,163 | 6,434 | (271 | ) | (4.2 | ) | ||||||||
Commercial | 7,368 | 7,544 | (176 | ) | (2.3 | ) | ||||||||
Industrial | 5,689 | 5,499 | 190 | 3.5 | ||||||||||
Other retail | 73 | 77 | (4 | ) | (5.2 | ) | ||||||||
Total Retail | 19,293 | 19,554 | (261 | ) | (1.3 | ) | ||||||||
Tariff-based wholesale | 4,038 | 4,391 | (353 | ) | (8.0 | ) | ||||||||
Market-based wholesale | 6,308 | 3,908 | 2,400 | 61.4 | ||||||||||
Total wholesale | 10,346 | 8,299 | 2,047 | 24.7 | ||||||||||
Total Electricity Sales | 29,639 | 27,853 | 1,786 | 6.4 | ||||||||||
(Dollars per MWh) | ||||||||||||||
Total retail | $ | 100.87 | $ | 101.17 | $ | (0.30 | ) | (0.3 | ) | |||||
Tariff-based wholesale | $ | 57.66 | $ | 56.79 | $ | 0.87 | 1.5 | |||||||
Market-based wholesale | $ | 12.70 | $ | 14.21 | $ | (1.51 | ) | (10.6 | ) | |||||
Fuel and Purchased Power | (Dollars In Thousands) | |||||||||||||
Fuel used for generation | $ | 397,066 | $ | 403,214 | $ | (6,148 | ) | (1.5 | ) | |||||
Purchased power | 175,877 | 164,007 | 11,870 | 7.2 | ||||||||||
Subtotal | 572,943 | 567,221 | 5,722 | 1.0 | ||||||||||
RECA recovery and other | (31,408 | ) | (57,725 | ) | 26,317 | 45.6 | ||||||||
Total fuel and purchased power expense | $ | 541,535 | $ | 509,496 | $ | 32,039 | 6.3 | |||||||
Electricity Supply | (Thousands of MWh) | |||||||||||||
Generated - Gas | 1,712 | 1,724 | (12 | ) | (0.7 | ) | ||||||||
Coal | 14,855 | 15,903 | (1,048 | ) | (6.6 | ) | ||||||||
Nuclear | 5,005 | 3,876 | 1,129 | 29.1 | ||||||||||
Wind | 1,412 | 422 | 990 | 234.6 | ||||||||||
Subtotal electricity generated | 22,984 | 21,925 | 1,059 | 4.8 | ||||||||||
Purchased | 7,643 | 6,607 | 1,036 | 15.7 | ||||||||||
Total Electricity Supply | 30,627 | 28,532 | 2,095 | 7.3 | ||||||||||
(Dollars per MWh) | ||||||||||||||
Average cost of fuel used for generation | $ | 17.28 | $ | 18.39 | $ | (1.11 | ) | (6.0 | ) | |||||
Average cost of purchased power | $ | 23.01 | $ | 24.82 | $ | (1.81 | ) | (7.3 | ) | |||||
Average cost of fuel and purchased power | $ | 18.71 | $ | 19.88 | $ | (1.17 | ) | (5.9 | ) | |||||
Degree Days | 2016/ | |||||||||||||
2017 | 20 yr Avg | Change | % Change | |||||||||||
Cooling | ||||||||||||||
Actual compared to last year | 1,730 | 1,978 | (248 | ) | (12.5 | ) | ||||||||
Actual compared to 20 year average | 1,730 | 1,621 | 109 | 6.7 | ||||||||||
Heating | ||||||||||||||
Actual compared to last year | 3,871 | 3,880 | (9 | ) | (0.2 | ) | ||||||||
Actual compared to 20 year average | 3,871 | 4,668 | (797 | ) | (17.1 | ) | ||||||||
Capitalization | ||||||||||||||
December 31, 2017 | December 31, 2016 | |||||||||||||
(Dollars in Thousands) | ||||||||||||||
Current maturities of long-term debt | $ | — | $ | 125,000 | ||||||||||
Current maturities of long-term debt of VIEs | 28,534 | 26,842 | ||||||||||||
Long-term debt, net | 3,687,555 | 3,388,670 | ||||||||||||
Long-term debt of variable interest entities, net | 81,433 | 111,209 | ||||||||||||
Total debt | 3,797,522 | 49.6 | % | 3,651,721 | 48.8 | % | ||||||||
Common equity | 3,908,122 | 51.0 | % | 3,805,875 | 50.8 | % | ||||||||
Noncontrolling interests | (47,685 | ) | (0.6 | )% | 27,315 | 0.4 | % | |||||||
Total capitalization | $ | 7,657,959 | 100.0 | % | $ | 7,484,911 | 100.0 | % | ||||||
GAAP Book value per share | $ | 27.50 | $ | 26.84 | ||||||||||
Period end shares outstanding (in thousands) | 142,094 | 141,791 | ||||||||||||
Outstanding Long-Term Debt | ||||||||||||||
CUSIP | December 31, 2017 | December 31, 2016 | ||||||||||||
Westar Energy: | (Dollars in Thousands) | |||||||||||||
First Mortgage Bond series: | ||||||||||||||
5.15% Series due January 2017 | 95709TAB6 | $ | — | $ | 125,000 | |||||||||
5.10% Series due July 2020 | 95709TAD2 | 250,000 | 250,000 | |||||||||||
3.250% Series due December 2025 | 95709TAL4 | 250,000 | 250,000 | |||||||||||
2.550% Series due June 2026 | 95709TAN0 | 350,000 | 350,000 | |||||||||||
3.10% Series due April 2027 | 95709TAP5 | 300,000 | — | |||||||||||
4.125% Series due December 2042 | 95709TAH3 | 550,000 | 550,000 | |||||||||||
4.10% Series due March 2043 | 95709TAJ9 | 430,000 | 430,000 | |||||||||||
4.625% Series due August 2043 | 95709TAK6 | 250,000 | 250,000 | |||||||||||
4.250% Series due December 2045 | 95709TAM2 | 300,000 | 300,000 | |||||||||||
2,680,000 | 2,505,000 | |||||||||||||
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 | 2,755,500 | 2,580,500 | ||||||||||||
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 | 250,000 | |||||||||||
875,000 | 875,000 | |||||||||||||
Pollution control bond series: | ||||||||||||||
Variable rate series due April 2027 (LaCygne) | 502828AJ5 | 21,940 | 21,940 | |||||||||||
2.50% Series due June 2031 | 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 | 3,726,940 | 3,551,940 | ||||||||||||
Unamortized debt discount | (10,925 | ) | (10,358 | ) | ||||||||||
Unamortized debt issuance expense | (28,460 | ) | (27,912 | ) | ||||||||||
Long-term debt due within one year | — | (125,000 | ) | |||||||||||
Total long-term debt, net | $ | 3,687,555 | $ | 3,388,670 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||
Revenues | $ | 594,781 | $ | 606,535 | $ | (11,754 | ) | $ | 2,571,003 | $ | 2,562,087 | $ | 8,916 | ||||||||||
Less: Fuel and purchased power expense | 126,086 | 135,135 | (9,049 | ) | 541,535 | 509,496 | 32,039 | ||||||||||||||||
SPP network transmission costs | 62,867 | 58,838 | 4,029 | 247,882 | 232,763 | 15,119 | |||||||||||||||||
Gross Margin | $ | 405,828 | $ | 412,562 | $ | (6,734 | ) | $ | 1,781,586 | $ | 1,819,828 | $ | (38,242 | ) | |||||||||
Income from operations | $ | 117,282 | $ | 115,881 | $ | 1,401 | $ | 658,719 | $ | 681,883 | $ | (23,164 | ) | ||||||||||
Plus: Operating and maintenance expense | 85,711 | 96,178 | (10,467 | ) | 333,923 | 346,313 | (12,390 | ) | |||||||||||||||
Depreciation and amortization expense | 94,424 | 85,681 | 8,743 | 371,747 | 338,519 | 33,228 | |||||||||||||||||
Selling, general and administrative expense | 67,202 | 68,689 | (1,487 | ) | 249,567 | 261,451 | (11,884 | ) | |||||||||||||||
Taxes other than income tax | 41,209 | 46,133 | (4,924 | ) | 167,630 | 191,662 | (24,032 | ) | |||||||||||||||
Gross Margin | $ | 405,828 | $ | 412,562 | $ | (6,734 | ) | $ | 1,781,586 | $ | 1,819,828 | $ | (38,242 | ) | |||||||||