WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - 2013 SECOND QUARTER EARNINGS PACKAGE

Attached files

file	filename
8-K - 8-K - WESTAR ENERGY INC /KS	wr-20130807earningsrelease.htm
EX-99.3 - 2013 REVISED EARNINGS GUIDANCE - AUGUST 2013 - WESTAR ENERGY INC /KS	wr-06302013x8xkexhibit993.htm
EX-99.1 - PRESS RELEASE DATED AUGUST 7, 2013 - WESTAR ENERGY INC /KS	wr-06302013x8xkexhibit991.htm

Exhibit 99.2

Westar Energy, Inc.

Second Quarter 2013 Earnings

Released August 7, 2013



Contents	Page

Consolidated Statements of Income	1
Consolidated Balance Sheets	3
Consolidated Statements of Cash Flows	4
Earnings Variances	5
Supplemental Data	7
Capitalization & Long-Term Debt Table	9
GAAP to Non-GAAP Reconciliation	10
Supplemental Slides	11

Bruce Burns

Director Investor Relations

785-575-8227

bruce.burns@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 June 30, 2013 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 June 30,
	2013			2012			Change			% Change
	(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	165,302		$	176,893		$	(11,591	)	(6.6	)
Commercial	165,172			170,132			(4,960		)	(2.9	)
Industrial	92,820			95,960			(3,140		)	(3.3	)
Other retail	2,228			(2,363		)	4,591			194.3
Total Retail Revenues	425,522			440,622			(15,100		)	(3.4	)
Wholesale	81,783			68,971			12,812			18.6
Transmission	52,804			49,380			3,424			6.9
Other	9,480			7,289			2,191			30.1
Total Revenues	569,589			566,262			3,327			0.6
OPERATING EXPENSES:
Fuel and purchased power	152,700			147,680			5,020			3.4
Operating and maintenance	163,303			156,470			6,833			4.4
Depreciation and amortization	67,597			66,299			1,298			2.0
Selling, general and administrative	54,477			62,711			(8,234		)	(13.1	)
Total Operating Expenses	438,077			433,160			4,917			1.1
INCOME FROM OPERATIONS	131,512			133,102			(1,590		)	(1.2	)
OTHER INCOME (EXPENSE):
Investment earnings (losses)	1,690			(598		)	2,288			382.6
Other income	13,711			7,537			6,174			81.9
Other expense	(2,354		)	(2,416		)	62			2.6
Total Other Income	13,047			4,523			8,524			188.5
Interest expense	45,798			44,823			975			2.2
INCOME BEFORE INCOME TAXES	98,761			92,802			5,959			6.4
Income tax expense	29,310			28,340			970			3.4
NET INCOME	69,451			64,462			4,989			7.7
Less: Net income attributable to noncontrolling interests	2,263			1,728			535			31.0
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	67,188			62,734			4,454			7.1
Preferred dividends	—			1,373			(1,373		)	(100.0	)
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	67,188		$	61,361		$	5,827		9.5
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See Note 2):
Basic earnings per common share	$	0.53		$	0.48		$	0.05		10.4
Diluted earnings per common share	$	0.52		$	0.48		$	0.04		8.3
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
Basic	127,311			126,637			674			0.5
Diluted	127,930			126,877			1,053			0.8
DIVIDENDS DECLARED PER COMMON SHARE	$	0.34		$	0.33		$	0.01		3.0
Effective income tax rate	29.68		%	30.54		%

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 1

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)



	Six Months Ended June 30,
	2013			2012			Change			% Change
	(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	330,678		$	315,311		$	15,367		4.9
Commercial	313,128			299,782			13,346			4.5
Industrial	183,745			181,380			2,365			1.3
Other retail	(944		)	(5,281		)	4,337			82.1
Total Retail Revenues	826,607			791,192			35,415			4.5
Wholesale	168,253			140,183			28,070			20.0
Transmission	104,315			95,343			8,972			9.4
Other	16,626			15,222			1,404			9.2
Total Revenues	1,115,801			1,041,940			73,861			7.1
OPERATING EXPENSES:
Fuel and purchased power	304,452			275,334			29,118			10.6
Operating and maintenance	322,032			312,514			9,518			3.0
Depreciation and amortization	134,443			139,579			(5,136		)	(3.7	)
Selling, general and administrative	103,422			110,046			(6,624		)	(6.0	)
Total Operating Expenses	864,349			837,473			26,876			3.2
INCOME FROM OPERATIONS	251,452			204,467			46,985			23.0
OTHER INCOME (EXPENSE):
Investment earnings	5,749			3,727			2,022			54.3
Other income	17,427			21,127			(3,700		)	(17.5	)
Other expense	(7,715		)	(7,969		)	254			3.2
Total Other Income	15,461			16,885			(1,424		)	(8.4	)
Interest expense	90,082			86,869			3,213			3.7
INCOME BEFORE INCOME TAXES	176,831			134,483			42,348			31.5
Income tax expense	54,123			40,783			13,340			32.7
NET INCOME	122,708			93,700			29,008			31.0
Less: Net income attributable to noncontrolling interests	4,375			3,442			933			27.1
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	118,333			90,258			28,075			31.1
Preferred dividends	—			1,616			(1,616		)	(100.0	)
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	118,333		$	88,642		$	29,691		33.5
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See Note 2):
Basic earnings per common share	$	0.93		$	0.70		$	0.23		32.9
Diluted earnings per common share	$	0.92		$	0.70		$	0.22		31.4
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
Basic	127,254			126,566			688			0.5
Diluted	127,735			126,745			990			0.8
DIVIDENDS DECLARED PER COMMON SHARE	$	0.68		$	0.66		$	0.02		3.0
Effective income tax rate	30.61		%	30.33		%

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 2

Westar Energy, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except Par Values)

(Unaudited)



	June 30, 2013		December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,973	$	5,829
Restricted cash	451		573
Accounts receivable, net of allowance for doubtful accounts of $3,466 and $4,916, respectively	239,319		224,439
Fuel inventory and supplies	239,497		249,016
Prepaid expenses	16,074		15,847
Regulatory assets	140,653		114,895
Other	24,514		32,476
Total Current Assets	664,481		643,075
PROPERTY, PLANT AND EQUIPMENT, NET	7,255,280		7,013,765
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET	301,998		321,975
OTHER ASSETS:
Regulatory assets	866,578		887,777
Nuclear decommissioning trust	159,631		150,754
Other	235,777		247,885
Total Other Assets	1,261,986		1,286,416
TOTAL ASSETS	$	9,483,745	$	9,265,231
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt of variable interest entities	$	27,773	$	25,942
Short-term debt	410,000		339,200
Accounts payable	149,680		180,825
Accrued dividends	43,150		41,743
Accrued taxes	74,569		58,624
Accrued interest	49,599		77,891
Regulatory liabilities	42,199		37,557
Other	90,366		84,359
Total Current Liabilities	887,336		846,141
LONG-TERM LIABILITIES:
Long-term debt, net	2,968,642		2,819,271
Long-term debt of variable interest entities, net	195,203		222,743
Deferred income taxes	1,233,893		1,197,837
Unamortized investment tax credits	189,931		191,512
Regulatory liabilities	283,360		285,618
Accrued employee benefits	557,033		564,870
Asset retirement obligations	156,690		152,648
Other	72,007		74,336
Total Long-Term Liabilities	5,656,759		5,508,835
COMMITMENTS AND CONTINGENCIES (See Notes 10 and 11)
EQUITY:
Westar Energy, Inc. Shareholders’ Equity:
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 126,935,051 shares and 126,503,748 shares, respective to each date	634,675		632,519
Paid-in capital	1,664,525		1,656,972
Retained earnings	637,900		606,649
Total Westar Energy, Inc. Shareholders’ Equity	2,937,100		2,896,140
Noncontrolling Interests	2,550		14,115
Total Equity	2,939,650		2,910,255
TOTAL LIABILITIES AND EQUITY	$	9,483,745	$	9,265,231

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 3

Westar Energy, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)



	Six Months Ended June 30,
	2013			2012
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	122,708		$	93,700
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	134,443			139,579
Amortization of nuclear fuel	8,631			9,026
Amortization of deferred regulatory gain from sale leaseback	(2,748		)	(2,748		)
Amortization of corporate-owned life insurance	4,138			10,921
Non-cash compensation	4,146			3,738
Net deferred income taxes and credits	45,409			33,586
Stock-based compensation excess tax benefits	(399		)	(1,498		)
Allowance for equity funds used during construction	(5,689		)	(6,778		)
Changes in working capital items:
Accounts receivable	(15,271		)	(51,055		)
Fuel inventory and supplies	11,780			(26,830		)
Prepaid expenses and other	2,396			17,368
Accounts payable	(24,838		)	(8,741		)
Accrued taxes	16,196			16,276
Other current liabilities	(58,624		)	(61,894		)
Changes in other assets	(28,048		)	(40,100		)
Changes in other liabilities	17,080			(21,371		)
Cash Flows from Operating Activities	231,310			103,179
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(398,998		)	(417,617		)
Purchase of securities - trusts	(59,986		)	(16,817		)
Sale of securities - trusts	75,475			18,040
Investment in corporate-owned life insurance	(17,408		)	(18,167		)
Proceeds from investment in corporate-owned life insurance	101,085			16,330
Proceeds from federal grant	876			3,289
Investment in affiliated company	—			(4,505		)
Other investing activities	(2,362		)	(343		)
Cash Flows used in Investing Activities	(301,318		)	(419,790		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	70,617			62,107
Proceeds from long-term debt	245,813			541,504
Retirements of long-term debt	(100,000		)	(220,563		)
Retirements of long-term debt of variable interest entities	(25,474		)	(7,736		)
Repayment of capital leases	(1,539		)	(1,287		)
Borrowings against cash surrender value of corporate-owned life insurance	57,948			63,287
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(100,060		)	(18,252		)
Stock-based compensation excess tax benefits	399			1,498
Preferred stock redemption	—			(22,567		)
Issuance of common stock	2,992			3,697
Distributions to shareholders of noncontrolling interests	(1,658		)	(3,252		)
Cash dividends paid	(80,886		)	(78,710		)
Cash Flows from Financing Activities	68,152			319,726
NET CHANGE IN CASH AND CASH EQUIVALENTS	(1,856		)	3,115
CASH AND CASH EQUIVALENTS:
Beginning of period	5,829			3,539
End of period	$	3,973		$	6,654

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 4

Westar Energy, Inc.

2nd Quarter 2013 vs. 2012



Earnings Variances
			Change
		($ per share)	(Dollars in Thousands)				($ per share)
2012 earnings attributable to common stock			$	61,361			$	0.48

		Favorable/(Unfavorable)

	Retail		(15,100		)	A
	Wholesale		12,812			B
	Transmission		3,424
	Other revenues		2,191
	Fuel and purchased power		(5,020		)	C
	SPP network transmission costs		(2,335		)
	Gross Margin		(4,028		)
	Operating and maintenance w/o SPP NITS		(4,498		)	D
	Depreciation and amortization		(1,298		)	E
	Selling, general and administrative		8,234			F
	Other income (expense)		8,524			G
	Interest expense		(975		)
	Income tax expense		(970		)	H
	Net income attributable to noncontrolling interests		(535		)
	Preferred dividends		1,373
	Change in shares outstanding	$0.00

2013 earnings attributable to common stock			$	67,188			$	0.53

	Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A	Due primarily to an 8% decrease in retail MWh sales (see page 7 for changes by customer class)

B	Due to a 28% increase in MWh sales (see page 7 for changes by customer class)

C	Due primarily to a 37% increase in the average cost of MWhs purchased

D	Due principally to higher property tax expense (this is largely offset in revenues through a property tax surcharge) -- ($4.6M)

E	Due principally to property additions

F	Due primarily to restructuring insurance contracts to lower post-retirement and other employee benefit cost -- $6.8M; lower labor costs -- $3.4M; higher pension costs -- ($3.3M)

G	Due primarily to recording higher COLI proceeds in 2013 -- $6.5M

H	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 June 30, 2013 should be read in conjunction with this financial information.

Page 5

Westar Energy, Inc.

YTD June 2013 vs. 2012

Earnings Variances

Change

($ per share)

(Dollars in Thousands)

($ per share)

2012 earnings attributable to common stock

88,642

0.70

Favorable/(Unfavorable)

Retail

35,415

Wholesale

28,070

Transmission

8,972

Other revenues

1,404

Fuel and purchased power

(29,118

)

SPP network transmission costs

(6,769

)

Gross Margin

37,974

Operating and maintenance w/o SPP NITS

(2,749

)

Depreciation and amortization

5,136

Selling, general and administrative

6,624

Other income (expense)

(1,424

)

Interest expense

(3,213

)

Income tax expense

(13,340

)

Net income attributable to noncontrolling interests

(933

)

Preferred dividends

1,616

Change in shares outstanding

$0.00

2013 earnings attributable to common stock

118,333

0.93

Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)

Due primarily to increased average retail prices (see page 8 for changes by customer class)

Due to MWh sales increasing 24% (see page 8 for changes by customer class)

Due principally to increased MWhs generated

Due principally to higher property tax expense (this is largely offset in revenues through a property tax surcharge) -- ($9.8M); lower costs at Wolf Creek -- $4.8M

Due to reduced depreciation rates to reflect changes in the estimated useful lives of some of our assets

Due primarily to restructuring insurance contracts to lower post-retirement and other employee benefit cost -- $12.8M; lower labor costs -- $4.4M; higher pension costs -- ($12.4M)

Due primarily to recording more COLI benefits in 2012-- ($2.7M)

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 June 30, 2013 should be read in conjunction with this financial information.

Page 6

Westar Energy, Inc.

Revenue, Sales and Energy Supply



Supplemental Data	Three Months Ended June 30,
	2013			2012			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	165,302		$	176,893		$	(11,591	)	(6.6	)
Commercial	165,172			170,132			(4,960		)	(2.9	)
Industrial	92,820			95,960			(3,140		)	(3.3	)
Other retail	3,170			3,068			102			3.3
Provision for rate refunds	(942		)	(5,431		)	4,489			82.7
Total Retail Revenues	425,522			440,622			(15,100		)	(3.4	)
Tariff-based wholesale	62,490			58,793			3,697			6.3
Market-based wholesale	19,293			10,178			9,115			89.6
Transmission	52,804			49,380			3,424			6.9
Other	9,480			7,289			2,191			30.1
Total Revenues	$	569,589		$	566,262		$	3,327		0.6


Electricity Sales	(Thousands of MWh)
Residential	1,460			1,629			(169		)	(10.4	)
Commercial	1,856			1,977			(121		)	(6.1	)
Industrial	1,312			1,418			(106		)	(7.5	)
Other retail	21			22			(1		)	(4.5	)
Total Retail	4,649			5,046			(397		)	(7.9	)
Tariff-based wholesale	1,327			1,241			86			6.9
Market-based wholesale	721			363			358			98.6
Total wholesale	2,048			1,604			444			27.7
Total Electricity Sales	6,697			6,650			47			0.7

	(Dollars per MWh)
Total retail	$	91.53		$	87.32		$	4.21		4.8
Tariff-based wholesale	$	47.09		$	47.38		$	(0.29	)	(0.6	)
Market-based wholesale	$	26.76		$	28.04		$	(1.28	)	(4.6	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	130,158		$	113,744		$	16,414		14.4
Purchased power	30,518			23,713			6,805			28.7
Subtotal	160,676			137,457			23,219			16.9
RECA recovery and other	(7,976		)	10,223			(18,199		)	(178.0	)
Total fuel and purchased power expense	$	152,700		$	147,680		$	5,020		3.4

Electricity Supply	(Thousands of MWh)
Generated - Gas	514			687			(173		)	(25.2	)
Coal	4,748			4,049			699			17.3
Nuclear	837			1,228			(391		)	(31.8	)
Wind	110			123			(13		)	(10.6	)
Subtotal electricity generated	6,209			6,087			122			2.0
Purchased	910			969			(59		)	(6.1	)
Total Electricity Supply	7,119			7,056			63			0.9

	(Dollars per MWh)
Average cost of fuel used for generation	$	20.96		$	18.69		$	2.27		12.1
Average cost of purchased power	$	33.54		$	24.47		$	9.07		37.1
Average cost of fuel and purchased power	$	22.57		$	19.48		$	3.09		15.9


Degree Days				2012/
	2013			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	496			744			(248		)	(33.3	)
Actual compared to 20 year average	496			457			39			8.5
Heating
Actual compared to last year	582			179			403			225.1
Actual compared to 20 year average	582			385			197			51.2

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 7

Westar Energy, Inc.

Revenue, Sales and Energy Supply



Supplemental Data	Six Months Ended June 30,
	2013				2012			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	330,678			$	315,311		$	15,367		4.9
Commercial	313,128				299,782			13,346			4.5
Industrial	183,745				181,380			2,365			1.3
Other retail	6,367				6,124			243			4.0
Provision for rate refunds	(7,311		)		(11,405		)	4,094			35.9
Total Retail Revenues	826,607				791,192			35,415			4.5
Tariff-based wholesale	134,239			205,142	121,325			12,914			10.6
Market-based wholesale	34,014			52,053	18,858			15,156			80.4
Transmission	104,315				95,343			8,972			9.4
Other	16,626				15,222			1,404			9.2
Total Revenues	$	1,115,801			$	1,041,940		$	73,861		7.1


Electricity Sales	(Thousands of MWh)
Residential	3,003				3,044			(41		)	(1.3	)
Commercial	3,558				3,626			(68		)	(1.9	)
Industrial	2,624				2,779			(155		)	(5.6	)
Other retail	43				42			1			2.4
Total Retail	9,228				9,491			(263		)	(2.8	)
Tariff-based wholesale	2,807				2,590			217			8.4
Market-based wholesale	1,286				708			578			81.6
Total wholesale	4,093				3,298			795			24.1
Total Electricity Sales	13,321				12,789			532			4.2

	(Dollars per MWh)
Total retail	$	89.58			$	83.36		$	6.22		7.5
Tariff-based wholesale	$	47.82			$	46.84		$	0.98		2.1
Market-based wholesale	$	26.45			$	26.64		$	(0.19	)	(0.7	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	257,812			$	213,380		$	44,432		20.8
Purchased power	59,534				61,124			(1,590		)	(2.6	)
Subtotal	317,346				274,504			42,842			15.6
RECA recovery and other	(12,894		)		830			(13,724		)	(1,653.5	)
Total fuel and purchased power expense	$	304,452			$	275,334		$	29,118		10.6

Electricity Supply	(Thousands of MWh)
Generated - Gas	864				1,140			(276		)	(24.2	)
Coal	9,934				8,178			1,756			21.5
Nuclear	1,292				1,430			(138		)	(9.7	)
Wind	214				248			(34		)	(13.7	)
Subtotal electricity generated	12,304				10,996			1,308			11.9
Purchased	1,767				2,540			(773		)	(30.4	)
Total Electricity Supply	14,071				13,536			535			4.0

	(Dollars per MWh)
Average cost of fuel used for generation	$	20.95			$	19.41		$	1.54		7.9
Average cost of purchased power	$	33.69			$	24.06		$	9.63		40.0
Average cost of fuel and purchased power	$	22.55			$	20.28		$	2.27		11.2


Degree Days					2012/
	2013				20 yr Avg			Change			% Change
Cooling
Actual compared to last year	496				788			(292		)	(37.1	)
Actual compared to 20 year average	496				460			36			7.8
Heating
Actual compared to last year	3,092				2,005			1,087			54.2
Actual compared to 20 year average	3,092				2,815			277			9.8

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 8

Westar Energy, Inc.



Capitalization
		June 30, 2013					December 31, 2012
		(Dollars in Thousands)
Current maturities of long-term debt of VIEs		$	27,773				$	25,942
Long-term debt, net		2,968,642					2,819,271
Long-term debt of variable interest entities, net		195,203					222,743
Total long-term debt		3,191,618			52.1	%	3,067,956			51.4	%
Common equity		2,937,100			47.9	%	2,896,140			48.4	%
Noncontrolling interests		2,550			—	%	14,115			0.2	%
Total capitalization		$	6,131,268		100.0	%	$	5,978,211		100.0	%

GAAP Book value per share		$	23.14				$	22.89
Period end shares outstanding (in thousands)		126,935					126,504

Outstanding Long-Term Debt

	CUSIP	June 30, 2013					December 31, 2012
Westar Energy:		(Dollars in Thousands)
First Mortgage Bond series:
6.00% Series due July 2014	95709TAA8	$	250,000				$	250,000
5.15% Series due January 2017	95709TAB6	125,000					125,000
5.95% Series due January 2035	95709TAC4	125,000					125,000
5.10% Series due July 2020	95709TAD2	250,000					250,000
5.875% Series due July 2036	95709TAE0	150,000					150,000
8.625% Series due December 2018	95709TAG5	300,000					300,000
4.125% Series due March 2042	95709TAH3	550,000					550,000
4.10% Series due April 2043	95709TAJ9	250,000					—
		2,000,000					1,750,000
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		2,075,500					1,825,500

KGE
First mortgage bond series:
6.53% Series due December 2037	485260BJ1	175,000					175,000
6.15% Series due May 2023	485260B@1	50,000					50,000
6.64%Series due May 2038	485260B#9	100,000					100,000
6.70%Series due June 2019	U24448AB5	300,000					300,000
		625,000					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					108,600
5.3% Series due June 2031	933623BR0	18,900					18,900
4.85% Series due June 2031	121825CB7	50,000					50,000
5.6% Series due June 2031	121825CD3	—					50,000
6.0% Series due June 2031	121825CE1	—					50,000
5.0% Series due June 2031	121825CF8	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
		273,940					373,940
Total KGE		898,940					998,940

Total long-term debt		2,974,440					2,824,440
Unamortized debt discount		(5,798		)			(5,169		)
Long-term debt due within one year		—					—
Total long-term debt, net		$	2,968,642				$	2,819,271

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 9

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. However, transmission costs are recorded as operating and maintenance expense on Westar's consolidated statements of income.

The calculations of gross margin and operating and maintenance expense w/o SPP NITS for the three and six months ended June 30, 2013 and 2012 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. Operating and maintenance expense is the GAAP financial measure most directly comparable to operating and maintenance expense w/o SPP NITS.



	Three Months Ended June 30,								Six Months Ended June 30,
	2013		2012			Change			2013			2012			Change
	(Dollars in Thousands)
Revenues
Residential	$	165,302	$	176,893		$	(11,591	)	$	330,678		$	315,311		$	15,367
Commercial	165,172		170,132			(4,960		)	313,128			299,782			13,346
Industrial	92,820		95,960			(3,140		)	183,745			181,380			2,365
Other retail	2,228		(2,363		)	4,591			(944		)	(5,281		)	4,337
Total Retail Revenues	425,522		440,622			(15,100		)	826,607			791,192			35,415
Wholesale	81,783		68,971			12,812			168,253			140,183			28,070
Transmission	52,804		49,380			3,424			104,315			95,343			8,972
Other	9,480		7,289			2,191			16,626			15,222			1,404
Total Revenues	569,589		566,262			3,327			1,115,801			1,041,940			73,861
Less: Fuel and purchased power expense	152,700		147,680			5,020			304,452			275,334			29,118
SPP network transmission costs	44,600		42,265			2,335			88,396			81,627			6,769
Gross Margin	$	372,289	$	376,317		$	(4,028	)	$	722,953		$	684,979		$	37,974

Gross margin	$	372,289	$	376,317		$	(4,028	)	$	722,953		$	684,979		$	37,974
Add: SPP network transmission costs	44,600		42,265			2,335			88,396			81,627			6,769
Less: Operating and maintenance expense	163,303		156,470			6,833			322,032			312,514			9,518
Depreciation and amortization expense	67,597		66,299			1,298			134,443			139,579			(5,136		)
Selling, general and administrative expense	54,477		62,711			(8,234		)	103,422			110,046			(6,624		)
Income from operations	$	131,512	$	133,102		$	(1,590	)	$	251,452		$	204,467		$	46,985


Operating and maintenance expense	$	163,303	$	156,470		$	6,833		$	322,032		$	312,514		$	9,518
Less: SPP network transmission costs	44,600		42,265			2,335			88,396			81,627			6,769
Operating and maintenance expense w/o SPP NITS	$	118,703	$	114,205		$	4,498		$	233,636		$	230,887		$	2,749

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 10

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 11

The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q

for the period ended June 30, 2013 should be read in conjunction with this financial information.

Page 12

WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - 2013 SECOND QUARTER EARNINGS PACKAGE - August 7, 2013

Attached files

WESTAR ENERGY INC /KS Reports