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Westar Energy announces 2nd quarter 2014 results.

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

Lower net income for the three months ended June 30, 2014 was driven largely by no corporate-owned life insurance proceeds and higher planned maintenance costs for the generating fleet.  These factors were partially offset by higher revenues for the quarter.

Higher net income for the six months ended June 30, 2014 was largely driven by higher revenues. The higher revenues are due principally from higher energy sales from colder weather in the first quarter and higher prices resulting from investments in air quality controls and transmission infrastructure.

Earnings Guidance

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

Conference Call and Additional Company Information

Westar Energy management will host a conference call Thursday, Aug. 7 with the investment community at 10 a.m. ET (9 a.m. CT).  Investors, media and the public may listen to the conference call by dialing 866-318-8620, participant code 77563283. A webcast of the live conference call will be available at www.WestarEnergy.com.

Members of the media are invited to listen to the conference call and then contact Gina Penzig with any follow-up questions.

This earnings announcement, a package of detailed second quarter financial information, the company's quarterly report on Form 10-Q for the period ended June 30, 2014 and other filings the company has made with the Securities and Exchange Commission are available on the company's website at www.WestarEnergy.com.

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Westar Energy, Inc. (NYSE: WR) is Kansas' largest electric utility. For more than a century, we have provided Kansans the safe, reliable electricity needed to power their businesses and homes. Every day our team of professionals takes on projects to generate and deliver electricity, protect the environment and provide excellent service to our nearly 700,000 customers. Westar has 7,200 MW of electric generation capacity fueled by coal, uranium, natural gas, wind and landfill gas. We are also a leader in electric transmission in Kansas. Our innovative customer service programs include mobile-enabled customer care, digital meters and paving the way for electric vehicle adoption. Our employees live, volunteer and work in the communities we serve.

For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com.

Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as (1) those discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2013 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2) those discussed in the company's Quarterly Report on Form 10-Q filed Aug. 6, 2014, (a) in ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and (b) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 10 and 11; and (3) other factors discussed in the company's filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made.

 

Media Contact:

Gina Penzig

Director, corporate communications

Phone: 785-575-8089

Gina.Penzig@westarenergy.com

Media line: 888-613-0003

 

Investor Contact:

Bruce Burns

Director, investor relations

Phone: 785-575-8227

Bruce.Burns@westarenergy.com

 


Westar Energy, Inc.
Condensed Consolidated Statements of Income

(Unaudited)

 

(a) Change greater than 1,000%.

 

Three Months Ended Jun. 30,

 

Six Months Ended Jun. 30,

 

2014

 

 

2013

 

 

Change

 

%Change

 

2014

 

 

2013

 

 

Change

 

% Change

 

(Dollars InThousands,ExceptPerShareAmounts)

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

$

175,671

 

 

$

165,302

 

 

$

10,369

 

 

6.3

 

 

$

367,958

 

 

$

330,678

 

 

$

37,280

 

 

11.3

 

Commercial

178,194

 

 

165,172

 

 

13,022

 

 

7.9

 

 

339,294

 

 

313,128

 

 

26,166

 

 

8.4

 

Industrial

106,984

 

 

92,820

 

 

14,164

 

 

15.3

 

 

201,480

 

 

183,745

 

 

17,735

 

 

9.7

 

Other retail

(3,033

)

 

2,228

 

 

(5,261

)

 

(236.1

)

 

(11,557

)

 

(944

)

 

(10,613

)

 

(a)

Total Retail Revenues

457,816

 

 

425,522

 

 

32,294

 

 

7.6

 

 

897,175

 

 

826,607

 

 

70,568

 

 

8.5

 

Wholesale

82,434

 

 

81,783

 

 

651

 

 

0.8

 

 

193,047

 

 

168,253

 

 

24,794

 

 

14.7

 

Transmission

63,700

 

 

52,804

 

 

10,896

 

 

20.6

 

 

125,166

 

 

104,315

 

 

20,851

 

 

20.0

 

Other

8,718

 

 

9,480

 

 

(762

)

 

(8.0

)

 

25,836

 

 

16,626

 

 

9,210

 

 

55.4

 

Total Revenues

612,668

 

 

569,589

 

 

43,079

 

 

7.6

 

 

1,241,224

 

 

1,115,801

 

 

125,423

 

 

11.2

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel and purchased power

164,779

 

 

152,700

 

 

12,079

 

 

7.9

 

 

338,618

 

 

304,452

 

 

34,166

 

 

11.2

 

SPP network transmission costs

55,533

 

 

44,600

 

 

10,933

 

 

24.5

 

 

107,491

 

 

88,396

 

 

19,095

 

 

21.6

 

Operating and maintenance

101,839

 

 

87,999

 

 

13,840

 

 

15.7

 

 

193,629

 

 

172,154

 

 

21,475

 

 

12.5

 

Depreciation and amortization

70,882

 

 

67,597

 

 

3,285

 

 

4.9

 

 

140,992

 

 

134,443

 

 

6,549

 

 

4.9

 

Selling, general and administrative

62,168

 

 

54,477

 

 

7,691

 

 

14.1

 

 

118,653

 

 

103,422

 

 

15,231

 

 

14.7

 

Taxes other than income tax

34,738

 

 

30,704

 

 

4,034

 

 

13.1

 

 

69,571

 

 

61,482

 

 

8,089

 

 

13.2

 

Total Operating Expenses

489,939

 

 

438,077

 

 

51,862

 

 

11.8

 

 

968,954

 

 

864,349

 

 

104,605

 

 

12.1

 

INCOME FROM OPERATIONS

122,729

 

 

131,512

 

 

(8,783

)

 

(6.7

)

 

272,270

 

 

251,452

 

 

20,818

 

 

8.3

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment earnings

3,175

 

 

1,690

 

 

1,485

 

 

87.9

 

 

5,553

 

 

5,749

 

 

(196

)

 

(3.4

)

Other income

5,658

 

 

13,711

 

 

(8,053

)

 

(58.7

)

 

11,575

 

 

17,427

 

 

(5,852

)

 

(33.6

)

Other expense

(2,287

)

 

(2,354

)

 

67

 

 

2.8

 

 

(7,952

)

 

(7,715

)

 

(237

)

 

(3.1

)

Total Other Income

6,546

 

 

13,047

 

 

(6,501

)

 

(49.8

)

 

9,176

 

 

15,461

 

 

(6,285

)

 

(40.7

)

Interest expense

47,303

 

 

45,798

 

 

1,505

 

 

3.3

 

 

93,543

 

 

90,082

 

 

3,461

 

 

3.8

 

INCOME BEFORE INCOME TAXES

81,972

 

 

98,761

 

 

(16,789

)

 

(17.0

)

 

187,903

 

 

176,831

 

 

11,072

 

 

6.3

 

Income tax expense

26,150

 

 

29,310

 

 

(3,160

)

 

(10.8

)

 

61,111

 

 

54,123

 

 

6,988

 

 

12.9

 

NET INCOME

55,822

 

 

69,451

 

 

(13,629

)

 

(19.6

)

 

126,792

 

 

122,708

 

 

4,084

 

 

3.3

 

Less: Net income attributable to noncontrolling interests

2,349

 

 

2,263

 

 

86

 

 

3.8

 

 

4,365

 

 

4,375

 

 

(10

)

 

(0.2

)

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.

$

53,473

 

 

$

67,188

 

 

$

(13,715

)

 

(20.4

)

 

$

122,427

 

 

$

118,333

 

 

$

4,094

 

 

3.5

 

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.41

 

 

$

0.53

 

 

$

(0.12

)

 

(22.6

)

 

$

0.95

 

 

$

0.93

 

 

$

0.02

 

 

2.2

 

Diluted earnings per common share

$

0.40

 

 

$

0.52

 

 

$

(0.12

)

 

(23.1

)

 

$

0.93

 

 

$

0.92

 

 

$

0.01

 

 

1.1

 

AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

129,363

 

 

127,311

 

 

2,052

 

 

1.6

 

 

129,185

 

 

127,254

 

 

1,931

 

 

1.5

 

Diluted

131,973

 

 

127,930

 

 

4,043

 

 

3.2

 

 

131,779

 

 

127,735

 

 

4,044

 

 

3.2

 

DIVIDENDS DECLARED PER COMMON SHARE

$

0.35

 

 

$

0.34

 

 

$

0.01

 

 

2.9

 

 

$

0.70

 

 

$

0.68

 

 

$

0.02

 

 

2.9

 

Effective income tax rate

31.90

%

 

29.68

%

 

 

 

 

 

 

 

32.52

%

 

30.61

%

 

 

 

 

 

 

 

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