WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - WESTAR ENERGY INC /KS	wr-06302016x8xkexhibit991.htm
8-K - 8-K - WESTAR ENERGY INC /KS	wr-06302016xearningsreleas.htm

Exhibit 99.2

Westar Energy, Inc.

Second Quarter 2016 Earnings

Released August 2, 2016



Contents	Page

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

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 June 30, 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 June 30,
	2016			2015			Change			% Change
	(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	202,838		$	173,677		$	29,161		16.8
Commercial	188,197			175,994			12,203			6.9
Industrial	108,004			103,151			4,853			4.7
Other retail	(16,502		)	(7,660		)	(8,842		)	(115.4	)
Total Retail Revenues	482,537			445,162			37,375			8.4
Wholesale	66,687			74,828			(8,141		)	(10.9	)
Transmission	66,620			61,295			5,325			8.7
Other	5,604			8,278			(2,674		)	(32.3	)
Total Revenues	621,448			589,563			31,885			5.4
OPERATING EXPENSES:
Fuel and purchased power	118,630			140,080			(21,450		)	(15.3	)
SPP network transmission costs	55,227			57,352			(2,125		)	(3.7	)
Operating and maintenance	85,619			82,739			2,880			3.5
Depreciation and amortization	84,226			76,759			7,467			9.7
Selling, general and administrative	75,724			63,663			12,061			18.9
Taxes other than income tax	48,407			37,494			10,913			29.1
Total Operating Expenses	467,833			458,087			9,746			2.1
INCOME FROM OPERATIONS	153,615			131,476			22,139			16.8
OTHER INCOME (EXPENSE):
Investment earnings	2,280			1,634			646			39.5
Other income	3,382			15,121			(11,739		)	(77.6	)
Other expense	(2,908		)	(2,633		)	(275		)	(10.4	)
Total Other Income	2,754			14,122			(11,368		)	(80.5	)
Interest expense	39,683			45,516			(5,833		)	(12.8	)
INCOME BEFORE INCOME TAXES	116,686			100,082			16,604			16.6
Income tax expense	40,542			33,839			6,703			19.8
NET INCOME	76,144			66,243			9,901			14.9
Less: Net income attributable to noncontrolling interests	3,804			2,533			1,271			50.2
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	$	72,340		$	63,710		$	8,630		13.5
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
Basic earnings per common share	$	0.51		$	0.47		$	0.04		8.5
Diluted earnings per common share	$	0.51		$	0.46		$	0.05		10.9
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
Basic	142,034			135,939			6,095			4.5
Diluted	142,497			137,412			5,085			3.7
DIVIDENDS DECLARED PER COMMON SHARE	$	0.38		$	0.36		$	0.02		5.6
Effective income tax rate	35		%	34		%

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

for the period ended June 30, 2016 should be read in conjunction with this financial information.

Page 1

Westar Energy, Inc.

Condensed Consolidated Statements of Income

(Unaudited)



	Six Months Ended June 30,
	2016			2015			Change			% Change
	(Dollars in Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	382,128		$	354,970		$	27,158		7.7
Commercial	353,870			337,300			16,570			4.9
Industrial	208,702			199,630			9,072			4.5
Other retail	(30,884		)	(7,122		)	(23,762		)	(333.6	)
Total Retail Revenues	913,816			884,778			29,038			3.3
Wholesale	134,099			161,584			(27,485		)	(17.0	)
Transmission	130,535			119,880			10,655			8.9
Other	12,448			14,128			(1,680		)	(11.9	)
Total Revenues	1,190,898			1,180,370			10,528			0.9
OPERATING EXPENSES:
Fuel and purchased power	218,688			295,561			(76,873		)	(26.0	)
SPP network transmission costs	115,987			114,164			1,823			1.6
Operating and maintenance	163,377			167,819			(4,442		)	(2.6	)
Depreciation and amortization	167,866			151,345			16,521			10.9
Selling, general and administrative	132,179			119,082			13,097			11.0
Taxes other than income tax	97,375			75,365			22,010			29.2
Total Operating Expenses	895,472			923,336			(27,864		)	(3.0	)
INCOME FROM OPERATIONS	295,426			257,034			38,392			14.9
OTHER INCOME (EXPENSE):
Investment earnings	4,296			4,113			183			4.4
Other income	12,860			17,935			(5,075		)	(28.3	)
Other expense	(8,451		)	(8,345		)	(106		)	(1.3	)
Total Other Income	8,705			13,703			(4,998		)	(36.5	)
Interest expense	80,114			89,814			(9,700		)	(10.8	)
INCOME BEFORE INCOME TAXES	224,017			180,923			43,094			23.8
Income tax expense	79,165			61,517			17,648			28.7
NET INCOME	144,852			119,406			25,446			21.3
Less: Net income attributable to noncontrolling interests	6,927			4,716			2,211			46.9
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	$	137,925		$	114,690		$	23,235		20.3
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2):
Basic earnings per common share	$	0.97		$	0.85		$	0.12		14.1
Diluted earnings per common share	$	0.97		$	0.84		$	0.13		15.5
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands):
Basic	142,013			134,177			7,836			5.8
Diluted	142,361			136,330			6,031			4.4
DIVIDENDS DECLARED PER COMMON SHARE	$	0.76		$	0.72		$	0.04		5.6
Effective income tax rate	35		%	34		%

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

for the period ended June 30, 2016 should be read in conjunction with this financial information.

Page 2

Westar Energy, Inc.

Condensed Consolidated Balance Sheets

(Dollars in Thousands, Except Par Values)

(Unaudited)



	June 30, 2016		December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,213	$	3,231
Accounts receivable, net of allowance for doubtful accounts of $5,093 and $5,294, respectively	298,841		258,286
Fuel inventory and supplies	299,465		301,294
Prepaid expenses	17,994		16,864
Regulatory assets	87,256		109,606
Other	33,099		27,860
Total Current Assets	741,868		717,141
PROPERTY, PLANT AND EQUIPMENT, NET	8,800,698		8,524,902
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET	263,072		268,239
OTHER ASSETS:
Regulatory assets	734,844		751,312
Nuclear decommissioning trust	189,179		184,057
Other	241,081		260,015
Total Other Assets	1,165,104		1,195,384
TOTAL ASSETS	$	10,970,742	$	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	177,000		250,300
Accounts payable	178,374		220,969
Accrued dividends	52,767		49,829
Accrued taxes	95,084		83,773
Accrued interest	41,969		71,426
Regulatory liabilities	33,634		25,697
Other	90,841		106,632
Total Current Liabilities	821,511		836,935
LONG-TERM LIABILITIES:
Long-term debt, net	3,387,696		3,163,950
Long-term debt of variable interest entities, net	111,230		138,097
Deferred income taxes	1,655,825		1,591,430
Unamortized investment tax credits	208,318		209,763
Regulatory liabilities	247,916		267,114
Accrued employee benefits	455,923		462,304
Asset retirement obligations	280,507		275,285
Other	87,065		88,825
Total Long-Term Liabilities	6,434,480		6,196,768
COMMITMENTS AND CONTINGENCIES (See 10-Q Notes 4, 11 and 12)
EQUITY:
Westar Energy, Inc. Shareholders’ Equity:
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 141,691,017 shares and 141,353,426 shares, respective to each date	708,455		706,767
Paid-in capital	2,008,491		2,004,124
Retained earnings	978,187		945,830
Total Westar Energy, Inc. Shareholders’ Equity	3,695,133		3,656,721
Noncontrolling Interests	19,618		15,242
Total Equity	3,714,751		3,671,963
TOTAL LIABILITIES AND EQUITY	$	10,970,742	$	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 June 30, 2016 should be read in conjunction with this financial information.

Page 3

Westar Energy, Inc.

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)



	Six Months Ended June 30,
	2016			2015
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	144,852		$	119,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	167,866			151,345
Amortization of nuclear fuel	16,831			10,085
Amortization of deferred regulatory gain from sale leaseback	(2,748		)	(2,748		)
Amortization of corporate-owned life insurance	8,819			9,042
Non-cash compensation	4,778			4,241
Net deferred income taxes and credits	75,334			54,740
Allowance for equity funds used during construction	(5,247		)	(2,041		)
Changes in working capital items:
Accounts receivable	(40,555		)	998
Fuel inventory and supplies	2,140			(31,307		)
Prepaid expenses and other	7,126			(40,195		)
Accounts payable	(21,364		)	(2,873		)
Accrued taxes	16,272			16,893
Other current liabilities	(62,434		)	(65,908		)
Changes in other assets	1,848			(9,712		)
Changes in other liabilities	15,163			21,046
Cash Flows from Operating Activities	328,681			233,012
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(503,631		)	(334,905		)
Purchase of securities - trusts	(39,603		)	(9,980		)
Sale of securities - trusts	41,201			10,263
Investment in corporate-owned life insurance	(14,648		)	(14,845		)
Proceeds from investment in corporate-owned life insurance	24,171			1,192
Investment in affiliated company	(655		)	—
Other investing activities	(2,798		)	(653		)
Cash Flows used in Investing Activities	(495,963		)	(348,928		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	(73,300		)	49,500
Proceeds from long-term debt	396,577			—
Proceeds from long-term debt of variable interest entities	162,048			—
Retirements of long-term debt	(50,000		)	(125,000		)
Retirements of long-term debt of variable interest entities	(190,355		)	(27,925		)
Repayment of capital leases	(401		)	(1,721		)
Borrowings against cash surrender value of corporate-owned life insurance	54,910			56,622
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(22,921		)	(899		)
Issuance of common stock	1,354			256,394
Distributions to shareholders of noncontrolling interests	(2,551		)	(1,076		)
Cash dividends paid	(101,137		)	(89,035		)
Other financing activities	(4,960		)	(3,234		)
Cash Flows from Financing Activities	169,264			113,626
NET CHANGE IN CASH AND CASH EQUIVALENTS	1,982			(2,290		)
CASH AND CASH EQUIVALENTS:
Beginning of period	3,231			4,556
End of period	$	5,213		$	2,266

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

for the period ended June 30, 2016 should be read in conjunction with this financial information.

Page 4

Westar Energy, Inc.

2nd Quarter 2016 vs. 2015

Earnings Variances

Change

($ per share)

(Dollars in Thousands)

($ per share)

June 30, 2015 basic earnings attributable to common stock

63,710

0.47

Favorable/(Unfavorable)

Gross Margin

55,460

Operating and maintenance

(2,880

)

Depreciation and amortization

(7,467

)

Selling, general and administrative

(12,061

)

Taxes other than income tax

(10,913

)

Other income (expense)

(11,368

)

Interest expense

5,833

Income tax expense

(6,703

)

Net income attributable to noncontrolling interests

(1,271

)

Change in shares outstanding

(0.02

)

June 30, 2016 basic earnings attributable to common stock

72,340

0.51

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

Due primarily to: general rate case increase of $78.0M (annual); estimated annual transmission margin

increase of $22.0M; and 2.7% increase in retail MWh sales due to warm weather

Due primarily to: higher operating and maintenance expense at coal fired plants due to schedule outages -- ($5.2M); partially offset by decrease in operating and maintenance expenses resulting from power plant retirements in late 2015 -- $1.7M

Due principally to property additions

Due primarily to: merger-related expenses -- ($7.8M); and higher employee benefit costs -- $(1.7M)

Due primarily to higher property tax expense that is largely offset by increased prices -- ($11.2M)

Due primarily to: lower COLI benefit -- ($13.8M); partially offset by an increase in equity AFUDC -- $2.7M

Due primarily to: decrease in interest expense of long-term debt due to refinancing -- $3.1M; increase in debt AFUDC -- $1.8M; and decrease in interest expense of long-term debt of VIEs due to refinancing -- $1.5M

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, 2016 should be read in conjunction with this financial information.

Page 5

Westar Energy, Inc.

YTD June 2016 vs. 2015

Earnings Variances

Change

($ per share)

(Dollars in Thousands)

($ per share)

June 30, 2015 basic earnings attributable to common stock

114,690

0.85

Favorable/(Unfavorable)

Gross Margin

85,578

Operating and maintenance

4,442

Depreciation and amortization

(16,521

)

Selling, general and administrative

(13,097

)

Taxes other than income tax

(22,010

)

Other income (expense)

(4,998

)

Interest expense

9,700

Income tax expense

(17,648

)

Net income attributable to noncontrolling interests

(2,211

)

Change in shares outstanding

(0.05

)

June 30, 2016 basic earnings attributable to common stock

137,925

0.97

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

Due primarily to: general rate case increase of $78.0M (annual); estimated annual transmission margin

increase of $22.0M; partially offset by 1.3% decrease in retail MWh sales principally due to extremely mild

winter weather

Due primarily to: lower distribution maintenance expense -- $4.0M; decrease operating and maintenance

expenses resulting from power plant retirements in late 2015 -- $3.7M; partially offset by higher operating and maintenance costs at coal fire plants due to scheduled outage -- ($5.0M)

Due principally to property additions

Due primarily to: merger-related expenses -- ($7.8M); and an increase in outside services costs primarily related to technology services -- $(2.1M)

Due primarily to higher property tax expense that is largely offset by increased prices -- ($22.7M)

Due primarily to lower COLI benefit -- ($7.3M); partially offset by an increase in equity AFUDC -- $3.2M

Due primarily to: decrease in interest expense of long-term debt due to refinancing -- $6.6M; decrease in interest expense of long-term debt of VIEs due to refinancing -- $2.6M; and increase in debt AFUDC -- $1.8M

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, 2016 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,
	2016			2015			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	202,838		$	173,677		$	29,161		16.8
Commercial	188,197			175,994			12,203			6.9
Industrial	108,004			103,151			4,853			4.7
Other retail	4,013			3,503			510			14.6
Provision for rate refunds	(20,515		)	(11,163		)	(9,352		)	(83.8	)
Total Retail Revenues	482,537			445,162			37,375			8.4
Tariff-based wholesale	56,260			56,688			(428		)	(0.8	)
Market-based wholesale	10,427			18,140			(7,713		)	(42.5	)
Transmission	66,620			61,295			5,325			8.7
Other	5,604			8,278			(2,674		)	(32.3	)
Total Revenues	$	621,448		$	589,563		$	31,885		5.4


Electricity Sales	(Thousands of MWh)
Residential	1,492			1,386			106			7.6
Commercial	1,875			1,835			40			2.2
Industrial	1,391			1,408			(17		)	(1.2	)
Other retail	19			22			(3		)	(13.6	)
Total Retail	4,777			4,651			126			2.7
Tariff-based wholesale	915			1,097			(182		)	(16.6	)
Market-based wholesale	781			949			(168		)	(17.7	)
Total wholesale	1,696			2,046			(350		)	(17.1	)
Total Electricity Sales	6,473			6,697			(224		)	(3.3	)

	(Dollars per MWh)
Total retail	$	101.01		$	95.71		$	5.30		5.5
Tariff-based wholesale	$	61.49		$	51.68		$	9.81		19.0
Market-based wholesale	$	13.35		$	19.11		$	(5.76	)	(30.1	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	91,980		$	106,169		$	(14,189	)	(13.4	)
Purchased power	34,071			33,514			557			1.7
Subtotal	126,051			139,683			(13,632		)	(9.8	)
RECA recovery and other	(7,421		)	397			(7,818		)	nm
Total fuel and purchased power expense	$	118,630		$	140,080		$	(21,450	)	(15.3	)

Electricity Supply	(Thousands of MWh)
Generated - Gas	472			237			235			99.2
Coal	3,373			4,542			(1,169		)	(25.7	)
Nuclear	1,242			756			486			64.3
Wind	100			105			(5		)	(4.8	)
Subtotal electricity generated	5,187			5,640			(453		)	(8.0	)
Purchased	1,455			1,318			137			10.4
Total Electricity Supply	6,642			6,958			(316		)	(4.5	)

	(Dollars per MWh)
Average cost of fuel used for generation	$	17.73		$	18.82		$	(1.09	)	(5.8	)
Average cost of purchased power	$	23.42		$	25.43		$	(2.01	)	(7.9	)
Average cost of fuel and purchased power	$	18.98		$	20.08		$	(1.10	)	(5.5	)


Degree Days				2015/
	2016			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	592			537			55			10.2
Actual compared to 20 year average	592			456			136			29.8
Heating
Actual compared to last year	285			270			15			5.6
Actual compared to 20 year average	285			385			(100		)	(26.0	)
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 June 30, 2016 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,
	2016			2015			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	382,128		$	354,970		$	27,158		7.7
Commercial	353,870			337,300			16,570			4.9
Industrial	208,702			199,630			9,072			4.5
Other retail	7,854			7,006			848			12.1
Provision for rate refunds	(38,738		)	(14,128		)	(24,610		)	(174.2	)
Total Retail Revenues	913,816			884,778			29,038			3.3
Tariff-based wholesale	115,280			117,023			(1,743		)	(1.5	)
Market-based wholesale	18,819			44,561			(25,742		)	(57.8	)
Transmission	130,535			119,880			10,655			8.9
Other	12,448			14,128			(1,680		)	(11.9	)
Total Revenues	$	1,190,898		$	1,180,370		$	10,528		0.9


Electricity Sales	(Thousands of MWh)
Residential	2,889			2,940			(51		)	(1.7	)
Commercial	3,533			3,567			(34		)	(1.0	)
Industrial	2,693			2,732			(39		)	(1.4	)
Other retail	40			41			(1		)	(2.4	)
Total Retail	9,155			9,280			(125		)	(1.3	)
Tariff-based wholesale	1,910			2,381			(471		)	(19.8	)
Market-based wholesale	1,660			2,235			(575		)	(25.7	)
Total wholesale	3,570			4,616			(1,046		)	(22.7	)
Total Electricity Sales	12,725			13,896			(1,171		)	(8.4	)

	(Dollars per MWh)
Total retail	$	99.82		$	95.34		$	4.48		4.7
Tariff-based wholesale	$	60.36		$	49.15		$	11.21		22.8
Market-based wholesale	$	11.34		$	19.94		$	(8.60	)	(43.1	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	173,619		$	214,418		$	(40,799	)	(19.0	)
Purchased power	72,901			79,041			(6,140		)	(7.8	)
Subtotal	246,520			293,459			(46,939		)	(16.0	)
RECA recovery and other	(27,832		)	2,102			(29,934		)	(1,424.1	)
Total fuel and purchased power expense	$	218,688		$	295,561		$	(76,873	)	(26.0	)

Electricity Supply	(Thousands of MWh)
Generated - Gas	697			550			147			26.7
Coal	6,661			8,994			(2,333		)	(25.9	)
Nuclear	2,494			1,550			944			60.9
Wind	222			211			11			5.2
Subtotal electricity generated	10,074			11,305			(1,231		)	(10.9	)
Purchased	3,011			2,941			70			2.4
Total Electricity Supply	13,085			14,246			(1,161		)	(8.1	)

	(Dollars per MWh)
Average cost of fuel used for generation	$	17.23		$	18.97		$	(1.74	)	(9.2	)
Average cost of purchased power	$	24.21		$	26.88		$	(2.67	)	(9.9	)
Average cost of fuel and purchased power	$	18.84		$	20.60		$	(1.76	)	(8.5	)


Degree Days				2015/
	2016			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	596			538			58			10.8
Actual compared to 20 year average	596			460			136			29.6
Heating
Actual compared to last year	2,367			2,702			(335		)	(12.4	)
Actual compared to 20 year average	2,367			2,814			(447		)	(15.9	)

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

for the period ended June 30, 2016 should be read in conjunction with this financial information.

Page 8

Westar Energy, Inc.



Capitalization
		June 30, 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		3,387,696					3,163,950
Long-term debt of variable interest entities, net		111,230					138,097
Total long-term debt		3,650,768			49.5	%	3,330,356			47.6	%
Common equity		3,695,133			50.2	%	3,656,721			52.2	%
Noncontrolling interests		19,618			0.3	%	15,242			0.2	%
Total capitalization		$	7,365,519		100.0	%	$	7,002,319		100.0	%

GAAP Book value per share		$	26.08				$	25.87
Period end shares outstanding (in thousands)		141,691					141,353

Outstanding Long-Term Debt

	CUSIP	June 30, 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
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
3.25% Series due December 2025	95709TAL4	250,000					250,000
4.25% Series due December 2045	95709TAM2	300,000					300,000
2.55% Series due July 2026	95709TAN0	350,000					—
		2,505,000					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		2,580,500					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
4.30% 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
4.85% Series due June 2031	121825CB7	—					50,000
2.50% Series due June 2031	N/A	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		3,551,940					3,201,940
Unamortized debt discount		(10,625		)			(10,374		)
Unamortized debt issuance expense		(28,619		)			(27,616		)
Long-term debt due within one year		(125,000		)			—
Total long-term debt, net		$	3,387,696				$	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 June 30, 2016 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.

The calculations of gross margin for the three and six months ended June 30, 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 June 30,							Six Months Ended June 30,
	2016		2015		Change			2016		2015		Change
	(Dollars in Thousands)
Revenues	$	621,448	$	589,563	$	31,885		$	1,190,898	$	1,180,370	$	10,528
Less: Fuel and purchased power expense	118,630		140,080		(21,450		)	218,688		295,561		(76,873		)
SPP network transmission costs	55,227		57,352		(2,125		)	115,987		114,164		1,823
Gross Margin	$	447,591	$	392,131	$	55,460		$	856,223	$	770,645	$	85,578

Gross margin	$	447,591	$	392,131	$	55,460		$	856,223	$	770,645	$	85,578
Less: Operating and maintenance expense	85,619		82,739		2,880			163,377		167,819		(4,442		)
Depreciation and amortization expense	84,226		76,759		7,467			167,866		151,345		16,521
Selling, general and administrative expense	75,724		63,663		12,061			132,179		119,082		13,097
Taxes other than income tax	48,407		37,494		10,913			97,375		75,365		22,010
Income from operations	$	153,615	$	131,476	$	22,139		$	295,426	$	257,034	$	38,392

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

for the period ended June 30, 2016 should be read in conjunction with this financial information.

Page 10

WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 2, 2016

Attached files

WESTAR ENERGY INC /KS Reports