================================================================================
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
March 31, 2003 (March 28, 2003)
Date of Report (Date of earliest event reported)
WESTAR ENERGY, INC.
(Exact name of registrant as specified in its charter)
Kansas 1-3523 48-0290150
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation or organization) Identification No.)
818 South Kansas Avenue, Topeka, Kansas 66612
(Address of principal executive offices)
(785) 575-6300
(Registrant's telephone number, including area code)
================================================================================
================================================================================
WESTAR ENERGY, INC.
Item 5. Other Events
On March 28, 2003, we announced 2002 results, reporting a loss of
$793.4 million, or $11.06 per share, compared to a loss of $21.8 million, or
$0.31 per share in 2001. A copy of our press release is attached to this report.
We also announced we would file our Annual Report on Form 10-K not
later than 15 days following March 31, 2003, pursuant to Rule 12b-25 under the
Securities Exchange Act of 1934. This delay will provide sufficient time for a
special committee of our board of directors to complete its previously announced
investigation. At that time, our independent auditors will be able to complete
their audit of our financial statements. The special committee has advised us
that the results of its investigation are not expected to result in adjustments
to our financial statements.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 - Press release dated March 28, 2003.
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 thereunto duly authorized.
Westar Energy, Inc.
Date: March 31, 2003 By /s/ Mark A. Ruelle
---------------------- ------------------------------
Mark A. Ruelle, Executive Vice
President and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Number Description of Exhibit
99.1 Press Release dated March 31, 2003
[LOGO] WESTAR ENERGY (R) Investor contact:
Greg A. Greenwood
Phone: 785.575.1806
Fax: 785.575.1730
greg_greenwood@wr.com
================================================================================
Westar Energy announces 2002 Results
TOPEKA, Kan., March 28, 2003 --Westar Energy (NYSE:WR) today announced
a loss of $793.4 million, or $11.06 per share for 2002, compared to a loss of
$21.8 million, or $0.31 per share in 2001. The 2002 results include a net charge
of $865 million, or $12.06 per share, related to valuation adjustments for
impairment of goodwill and other intangible assets associated with the Company's
monitored security businesses. Of this charge, $116 million, or $1.61 per share,
reflects additional valuation adjustments for impairment of goodwill taken in
the fourth quarter. As discussed below, these results are presently unaudited.
On February 6, 2003, Westar Energy announced that it expects to divest
its monitored security businesses and its ONEOK investment, to focus exclusively
on its Kansas electric utility operations. The Company will account for the
monitored security businesses as "discontinued operations" in future periods.
The Company also announced it would file its Annual Report on Form 10-K
not later than 15 days following March 31, 2003, pursuant to Rule 12b-25 under
the Securities Exchange Act of 1934. This delay will provide sufficient time for
a special committee of the Company's Board of Directors to complete its
previously announced investigation. At that time, the Company's independent
auditors will be able to complete their audit of the Company's financial
-- more --
Westar Energy announces 2002 results, page 2
statements. The special committee has advised the Company that the results of
its investigation are not expected to result in adjustments to the Company's
financial statements.
Utility Operations
- ------------------
Westar Energy's utility operations reported revenues of $1.42 billion
in 2002, compared to revenues of $1.31 billion in the same period in the prior
year, an increase of 9 percent. Retail revenues from our residential, commercial
and industrial customers increased $26 million, or 2.5 percent. Wholesale energy
and power marketing revenues increased $33 million, or 16 percent, as a result
of increased sales volumes.
Utility operations contributed net income of approximately $18 million,
or $0.25 per, share in 2002 compared to net income of $35 million, or $0.49 per
share, in 2001. Results for 2002 were affected by lower retail rates. Higher
operating expenses were partially offset by lower depreciation expense resulting
from the adoption of new depreciation rates for certain generation facilities as
ordered by the Kansas Corporation Commission.
Utility operations incurred pre-tax charges of approximately $36
million related to employee severance and approximately $23 million related to a
mark to market charge on a call option associated with the Company's 6.25
percent senior unsecured notes issued in 1998.
Non-Utility Operations
- ----------------------
Our investment in ONEOK contributed $39 million, or $0.55 per share in
2002, compared to $36 million, or $0.51 per share in 2001. Our monitored
security businesses reported a loss of $885 million, or $12.34 per Westar Energy
share in 2002, compared to a loss of $97 million, or $1.38 per share, in the
prior year. The monitored security loss includes the
-- more --
Westar Energy announces 2002 results, page 3
previously mentioned charges related to valuation adjustments for impairment of
goodwill and other intangible assets.
Debt Reduction and Restructuring Plan
- -------------------------------------
On February 6, 2003, Westar Energy announced a Debt Reduction and
Restructuring Plan (the Plan), which the Company hopes to implement by year-end
2004. This Plan includes the divestiture of the Company's monitored security
businesses and its investment in ONEOK, Inc. and a return to focusing
exclusively on the Kansas electric utility operations. In conjunction with the
Plan: (1) Westar Energy reduced its quarterly common dividend by 37 percent to a
quarterly rate of $0.19 per share; (2) sold 40 percent of its ONEOK shares for
$300 million; (3) began the process of divesting its interest in Protection One
Europe; (4) began the process of divesting its interest in Protection One; and
(5) announced its intention to dispose of its remaining ONEOK holdings.
Other
- -----
The Company's annual meeting of stockholders will be held on June 16,
2003 in Topeka, Kansas.
-30-
Westar Energy, Inc. (NYSE: WR) is the largest electric utility in
Kansas and owns interests in monitored security and other investments. Westar
Energy provides electric service to about 647,000 customers in the state. Westar
Energy has nearly 6,000 megawatts of electric generation capacity and operates
and coordinates more than 36,600 miles of electric distribution and transmission
lines. The company has total assets of approximately $6.4 billion, including
security company holdings through ownership of Protection One, Inc. (NYSE: POI)
and Protection One Europe, which have approximately 1.1 million security
customers. Through its ownership in ONEOK, Inc. (NYSE: OKE), a Tulsa, Okla.-
based natural gas company, Westar Energy has a 27.5 percent interest in one of
the largest natural gas distribution companies in the nation, serving more than
1.9 million customers.
For more information about Westar Energy, visit us on the Internet at
http://www.wr.com.
Forward-looking statements: Certain matters discussed in 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 we "believe,"
"anticipate," "target," "expect," "pro forma," "estimate," "intend" or words of
similar meaning. Forward-looking statements describe our future plans,
objectives, expectations or goals. Such statements address future events and
conditions concerning capital expenditures; earnings; liquidity and capital
resources;
Westar Energy announces 2002 results, page 4
litigation; accounting matters; possible corporate restructurings, mergers,
acquisitions and dispositions; the sale of assets proposed in our Debt Reduction
and Restructuring Plan filed with the Kansas Corporation Commission on Feb. 6,
2003; compliance with debt and other restrictive covenants; interest and
dividends; Protection One, Inc.'s financial condition and its impact on our
consolidated results; possible future impairment charges; environmental matters;
nuclear operations; events in foreign markets in which investments have been
made; and the overall economy of our service area. What happens in each case
could vary materially from what we expect because of such things as electric
utility deregulation or re-regulation; regulated and competitive markets;
ongoing municipal, state and federal activities; economic conditions; changes in
accounting requirements and other accounting matters; changing weather; rate and
other regulatory matters, including the impact of the Nov. 8, 2002, and Dec. 23,
2002, orders issued by the Kansas Corporation Commission requiring debt
reduction; amendments or revisions to our Debt Reduction and Restructuring Plan
filed with the Kansas Corporation Commission; the impact of changes and
downturns in the energy industry and the market for trading wholesale
electricity; the sale of our interests in ONEOK, Inc., Protection One, Inc. and
Protection One Europe; the federal grand jury subpoena by the United States
Attorney's Office requesting certain information; the Securities and Exchange
Commission's review of our consolidated financial statements; the subpoena
received from the Federal Energy Regulatory Commission seeking information on
power trades with Cleco Corporation and its affiliates and on other power
marketing transactions; political, legislative and regulatory developments;
regulatory, legislative and judicial actions; the impact of the purported
shareholder and employee class-action lawsuits filed against us; the impact of
changes in interest rates generally and specifically, changes in the London
Interbank offer rate (LIBOR) on the fair value of our swap transactions; changes
in the 10-year United States treasury rates and the corresponding impact on the
fair value of our call option; homeland security considerations; ongoing
impairment tests; coal, gas and oil prices; and other circumstances affecting
anticipated operations, sales and costs.
These lists are not all-inclusive because it is not possible to predict
all possible factors. Any forward-looking statement speaks only as of the date
such statement was made, and we do not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement was made except as required by applicable laws or
regulations.
2002 INCOME STATEMENT & CASH FLOW INFORMATION
WESTAR ENERGY, INC.
(UNAUDITED)
(IN THOUSANDS)
-------------------------------------- ---------------------------------------
2002 2001
-------------------------------------- ---------------------------------------
Utility Utility
Operations Other Consolidated Operations Other Consolidated
-------------------------------------- ---------------------------------------
Sales $ 1,422,899 $ 348,219 $ 1,771,118 $ 1,307,177 $ 409,689 $ 1,716,866
Cost of Sales 378,628 133,966 512,594 394,076 140,307 534,383
-------------------------------------- --------------------------------------
Gross Margin 1,044,271 214,253 1,258,524 913,101 269,382 1,182,483
Depreciation & Amortization 171,749 92,396 264,145 185,158 225,495 410,653
Operating Expenses (excl. D&A) 593,715 625,479 1,219,194 511,326 192,444 703,770
-------------------------------------- --------------------------------------
Total Operating Expenses 765,464 717,875 1,483,339 696,484 417,939 1,114,423
Income (Loss) from Operations 278,807 (503,622) (224,815) 216,617 (148,557) 68,060
Other Income (Expense) (31,814) 202,265 170,451 (9,562) 95,421 85,859
-------------------------------------- --------------------------------------
Earnings (Loss) Before Interest and Taxes 246,993 (301,357) (54,364) 207,055 (53,136) 153,919
Interest Expense 232,970 36,313 269,283 226,787 34,008 260,795
Income Taxes (4,292) (153,313) (157,605) (36,633) (31,711) (68,344)
-------------------------------------- --------------------------------------
Income (loss) from continuing operations
before accounting change 18,315 (184,357) (166,042) 16,901 (55,433) (38,532)
Discontinued operations, net of tax - (3,242) (3,242) - (1,038) (1,038)
Cumulative effect of accounting change, net of tax - (623,717) (623,717) 18,694 - 18,694
-------------------------------------- --------------------------------------
Net Income (Loss) 18,315 (811,316) (793,001) 35,595 (56,471) (20,876)
Preferred Dividends 399 - 399 895 - 895
-------------------------------------- --------------------------------------
Earnings (Loss) Available to Common $ 17,916 $ (811,316) $ (793,400) $ 34,700 $ (56,471) $ (21,771)
====================================== ======================================
Basic Earnings (Loss) Per Share $ 0.25 $ (11.31) $ (11.06) $ 0.49 $ (0.80) $ (0.31)
====================================== ======================================
Capital Expenditures $ 126,763 $ 51,998 $ 178,761 $ 226,996 $ 31,136 $ 258,132
