Exhibit 99.2
Westar Energy, Inc.
Third Quarter 2016 Earnings
Released November 1, 2016
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 September 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 September 30, |
| | 2016 | | 2015 | | Change | | % Change |
| | (Dollars in Thousands, Except Per Share Amounts) |
| REVENUES: | | | | | | | |
| Residential | $ | 282,272 |
| | $ | 255,804 |
| | $ | 26,468 |
| | 10.3 |
|
| Commercial | 218,377 |
| | 213,461 |
| | 4,916 |
| | 2.3 |
|
| Industrial | 106,021 |
| | 105,307 |
| | 714 |
| | 0.7 |
|
| Other retail | 7,883 |
| | 1,620 |
| | 6,263 |
| | 386.6 |
|
| Total Retail Revenues | 614,553 |
| | 576,192 |
| | 38,361 |
| | 6.7 |
|
| Wholesale | 86,421 |
| | 87,918 |
| | (1,497 | ) | | (1.7 | ) |
| Transmission | 58,462 |
| | 61,190 |
| | (2,728 | ) | | (4.5 | ) |
| Other | 5,218 |
| | 7,529 |
| | (2,311 | ) | | (30.7 | ) |
| Total Revenues | 764,654 |
| | 732,829 |
| | 31,825 |
| | 4.3 |
|
| OPERATING EXPENSES: | | | | | | | |
| Fuel and purchased power | 155,673 |
| | 163,943 |
| | (8,270 | ) | | (5.0 | ) |
| SPP network transmission costs | 57,939 |
| | 57,487 |
| | 452 |
| | 0.8 |
|
| Operating and maintenance | 86,758 |
| | 80,444 |
| | 6,314 |
| | 7.8 |
|
| Depreciation and amortization | 84,972 |
| | 77,184 |
| | 7,788 |
| | 10.1 |
|
| Selling, general and administrative | 60,582 |
| | 60,485 |
| | 97 |
| | 0.2 |
|
| Taxes other than income tax | 48,154 |
| | 37,682 |
| | 10,472 |
| | 27.8 |
|
| Total Operating Expenses | 494,078 |
| | 477,225 |
| | 16,853 |
| | 3.5 |
|
| INCOME FROM OPERATIONS | 270,576 |
| | 255,604 |
| | 14,972 |
| | 5.9 |
|
| OTHER INCOME (EXPENSE): | | | | | | | |
| Investment earnings | 2,619 |
| | 314 |
| | 2,305 |
| | 734.1 |
|
| Other income | 13,353 |
| | 637 |
| | 12,716 |
| | nm |
|
| Other expense | (5,887 | ) | | (5,392 | ) | | (495 | ) | | (9.2 | ) |
| Total Other Income (Expense) | 10,085 |
| | (4,441 | ) | | 14,526 |
| | 327.1 |
|
| Interest expense | 40,897 |
| | 44,306 |
| | (3,409 | ) | | (7.7 | ) |
| INCOME BEFORE INCOME TAXES | 239,764 |
| | 206,857 |
| | 32,907 |
| | 15.9 |
|
| Income tax expense | 81,211 |
| | 66,293 |
| | 14,918 |
| | 22.5 |
|
| NET INCOME | 158,553 |
| | 140,564 |
| | 17,989 |
| | 12.8 |
|
| Less: Net income attributable to noncontrolling interests | 3,833 |
| | 2,561 |
| | 1,272 |
| | 49.7 |
|
| NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | $ | 154,720 |
| | $ | 138,003 |
| | $ | 16,717 |
| | 12.1 |
|
| BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2): | | | | | | | |
| Basic earnings per common share | $ | 1.09 |
| | $ | 0.97 |
| | $ | 0.12 |
| | 12.4 |
|
| Diluted earnings per common share | $ | 1.08 |
| | $ | 0.97 |
| | $ | 0.11 |
| | 11.3 |
|
| AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands): | | | | | | | |
| Basic | 142,091 |
| | 141,623 |
| | 468 |
| | 0.3 |
|
| Diluted | 142,578 |
| | 141,838 |
| | 740 |
| | 0.5 |
|
| DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.38 |
| | $ | 0.36 |
| | $ | 0.02 |
| | 5.6 |
|
| Effective income tax rate | 34 | % | | 32 | % | | | | |
| | | | | | | | |
| 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 September 30, 2016 should be read in conjunction with this financial information.
Page 1
Westar Energy, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
|
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2016 | | 2015 | | Change | | % Change |
| | (Dollars in Thousands, Except Per Share Amounts) |
| REVENUES: | | | | | | | |
| Residential | $ | 664,400 |
| | $ | 610,775 |
| | $ | 53,625 |
| | 8.8 |
|
| Commercial | 572,247 |
| | 550,761 |
| | 21,486 |
| | 3.9 |
|
| Industrial | 314,723 |
| | 304,937 |
| | 9,786 |
| | 3.2 |
|
| Other retail | (23,002 | ) | | (5,503 | ) | | (17,499 | ) | | (318.0 | ) |
| Total Retail Revenues | 1,528,368 |
| | 1,460,970 |
| | 67,398 |
| | 4.6 |
|
| Wholesale | 220,520 |
| | 249,502 |
| | (28,982 | ) | | (11.6 | ) |
| Transmission | 188,996 |
| | 181,070 |
| | 7,926 |
| | 4.4 |
|
| Other | 17,668 |
| | 21,657 |
| | (3,989 | ) | | (18.4 | ) |
| Total Revenues | 1,955,552 |
| | 1,913,199 |
| | 42,353 |
| | 2.2 |
|
| OPERATING EXPENSES: | | | | | | | |
| Fuel and purchased power | 374,361 |
| | 459,504 |
| | (85,143 | ) | | (18.5 | ) |
| SPP network transmission costs | 173,925 |
| | 171,651 |
| | 2,274 |
| | 1.3 |
|
| Operating and maintenance | 250,135 |
| | 248,263 |
| | 1,872 |
| | 0.8 |
|
| Depreciation and amortization | 252,838 |
| | 228,529 |
| | 24,309 |
| | 10.6 |
|
| Selling, general and administrative | 192,762 |
| | 179,567 |
| | 13,195 |
| | 7.3 |
|
| Taxes other than income tax | 145,529 |
| | 113,047 |
| | 32,482 |
| | 28.7 |
|
| Total Operating Expenses | 1,389,550 |
| | 1,400,561 |
| | (11,011 | ) | | (0.8 | ) |
| INCOME FROM OPERATIONS | 566,002 |
| | 512,638 |
| | 53,364 |
| | 10.4 |
|
| OTHER INCOME (EXPENSE): | | | | | | | |
| Investment earnings | 6,916 |
| | 4,427 |
| | 2,489 |
| | 56.2 |
|
| Other income | 26,212 |
| | 18,572 |
| | 7,640 |
| | 41.1 |
|
| Other expense | (14,338 | ) | | (13,737 | ) | | (601 | ) | | (4.4 | ) |
| Total Other Income (Expense) | 18,790 |
| | 9,262 |
| | 9,528 |
| | 102.9 |
|
| Interest expense | 121,011 |
| | 134,120 |
| | (13,109 | ) | | (9.8 | ) |
| INCOME BEFORE INCOME TAXES | 463,781 |
| | 387,780 |
| | 76,001 |
| | 19.6 |
|
| Income tax expense | 160,376 |
| | 127,810 |
| | 32,566 |
| | 25.5 |
|
| NET INCOME | 303,405 |
| | 259,970 |
| | 43,435 |
| | 16.7 |
|
| Less: Net income attributable to noncontrolling interests | 10,760 |
| | 7,277 |
| | 3,483 |
| | 47.9 |
|
| NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | $ | 292,645 |
| | $ | 252,693 |
| | $ | 39,952 |
| | 15.8 |
|
| BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO WESTAR ENERGY, INC. (See 10-Q Note 2): | | | | | | | |
| Basic earnings per common share | $ | 2.06 |
| | $ | 1.84 |
| | $ | 0.22 |
| | 12.0 |
|
| Diluted earnings per common share | $ | 2.05 |
| | $ | 1.82 |
| | $ | 0.23 |
| | 12.6 |
|
| AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING (in thousands): | | | | | | | |
| Basic | 142,039 |
| | 136,686 |
| | 5,353 |
| | 3.9 |
|
| Diluted | 142,413 |
| | 138,182 |
| | 4,231 |
| | 3.1 |
|
| DIVIDENDS DECLARED PER COMMON SHARE | $ | 1.14 |
| | $ | 1.08 |
| | $ | 0.06 |
| | 5.6 |
|
| Effective income tax rate | 35 | % | | 33 | % | | | | |
| | | | | | | | |
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended September 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)
|
| | | | | | | |
| | September 30, 2016 | | December 31, 2015 |
| ASSETS | | | |
| CURRENT ASSETS: | | | |
| Cash and cash equivalents | $ | 3,937 |
| | $ | 3,231 |
|
| Accounts receivable, net of allowance for doubtful accounts of $4,175 and $5,294, respectively | 322,386 |
| | 258,286 |
|
| Fuel inventory and supplies | 290,080 |
| | 301,294 |
|
| Prepaid expenses | 15,625 |
| | 16,864 |
|
| Regulatory assets | 91,999 |
| | 109,606 |
|
| Other | 38,276 |
| | 27,860 |
|
| Total Current Assets | 762,303 |
| | 717,141 |
|
| PROPERTY, PLANT AND EQUIPMENT, NET | 9,038,197 |
| | 8,524,902 |
|
| PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET | 260,488 |
| | 268,239 |
|
| OTHER ASSETS: | | | |
| Regulatory assets | 731,859 |
| | 751,312 |
|
| Nuclear decommissioning trust | 198,796 |
| | 184,057 |
|
| Other | 252,775 |
| | 260,015 |
|
| Total Other Assets | 1,183,430 |
| | 1,195,384 |
|
| TOTAL ASSETS | $ | 11,244,418 |
| | $ | 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 | 182,900 |
| | 250,300 |
|
| Accounts payable | 228,046 |
| | 220,969 |
|
| Accrued dividends | 52,822 |
| | 49,829 |
|
| Accrued taxes | 119,938 |
| | 83,773 |
|
| Accrued interest | 61,833 |
| | 71,426 |
|
| Regulatory liabilities | 22,547 |
| | 25,697 |
|
| Other | 97,100 |
| | 106,632 |
|
| Total Current Liabilities | 917,028 |
| | 836,935 |
|
| LONG-TERM LIABILITIES: | | | |
| Long-term debt, net | 3,388,221 |
| | 3,163,950 |
|
| Long-term debt of variable interest entities, net | 111,218 |
| | 138,097 |
|
| Deferred income taxes | 1,737,359 |
| | 1,591,430 |
|
| Unamortized investment tax credits | 207,595 |
| | 209,763 |
|
| Regulatory liabilities | 243,754 |
| | 267,114 |
|
| Accrued employee benefits | 445,442 |
| | 462,304 |
|
| Asset retirement obligations | 283,941 |
| | 275,285 |
|
| Other | 85,442 |
| | 88,825 |
|
| Total Long-Term Liabilities | 6,502,972 |
| | 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 141,743,883 shares and 141,353,426 shares, respective to each date | 708,719 |
| | 706,767 |
|
| Paid-in capital | 2,013,449 |
| | 2,004,124 |
|
| Retained earnings | 1,078,799 |
| | 945,830 |
|
| Total Westar Energy, Inc. Shareholders’ Equity | 3,800,967 |
| | 3,656,721 |
|
| Noncontrolling Interests | 23,451 |
| | 15,242 |
|
| Total Equity | 3,824,418 |
| | 3,671,963 |
|
| TOTAL LIABILITIES AND EQUITY | $ | 11,244,418 |
| | $ | 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 September 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)
|
| | | | | | | |
| | Nine Months Ended September 30, |
| | 2016 | | 2015 |
| CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | | | |
| Net income | $ | 303,405 |
| | $ | 259,970 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 252,838 |
| | 228,529 |
|
| Amortization of nuclear fuel | 22,518 |
| | 18,528 |
|
| Amortization of deferred regulatory gain from sale leaseback | (4,121 | ) | | (4,121 | ) |
| Amortization of corporate-owned life insurance | 13,779 |
| | 15,309 |
|
| Non-cash compensation | 7,025 |
| | 6,280 |
|
| Net deferred income taxes and credits | 160,429 |
| | 126,602 |
|
| Allowance for equity funds used during construction | (7,894 | ) | | (2,034 | ) |
| Changes in working capital items: | | | |
| Accounts receivable | (64,100 | ) | | (21,437 | ) |
| Fuel inventory and supplies | 11,680 |
| | (28,814 | ) |
| Prepaid expenses and other | (385 | ) | | (22,742 | ) |
| Accounts payable | 9,736 |
| | (4,979 | ) |
| Accrued taxes | 40,711 |
| | 51,867 |
|
| Other current liabilities | (61,879 | ) | | (66,000 | ) |
| Changes in other assets | (4,377 | ) | | 1,394 |
|
| Changes in other liabilities | 13,208 |
| | 26,512 |
|
| Cash Flows from Operating Activities | 692,573 |
| | 584,864 |
|
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | | | |
| Additions to property, plant and equipment | (821,936 | ) | | (486,515 | ) |
| Purchase of securities - trusts | (43,252 | ) | | (20,752 | ) |
| Sale of securities - trusts | 44,326 |
| | 20,957 |
|
| Investment in corporate-owned life insurance | (14,648 | ) | | (14,845 | ) |
| Proceeds from investment in corporate-owned life insurance | 24,242 |
| | 65,962 |
|
| Investment in affiliated company | (655 | ) | | — |
|
| Other investing activities | (3,095 | ) | | (781 | ) |
| Cash Flows used in Investing Activities | (815,018 | ) | | (435,974 | ) |
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | | | |
| Short-term debt, net | (67,402 | ) | | 46,000 |
|
| Proceeds from long-term debt | 396,472 |
| | — |
|
| Proceeds from long-term debt of variable interest entities | 162,048 |
| | — |
|
| Retirements of long-term debt | (50,000 | ) | | (275,000 | ) |
| Retirements of long-term debt of variable interest entities | (190,357 | ) | | (27,933 | ) |
| Repayment of capital leases | (2,327 | ) | | (1,759 | ) |
| Borrowings against cash surrender value of corporate-owned life insurance | 55,952 |
| | 57,726 |
|
| Repayment of borrowings against cash surrender value of corporate-owned life insurance | (22,921 | ) | | (63,894 | ) |
| Issuance of common stock | 2,003 |
| | 257,169 |
|
| Distributions to shareholders of noncontrolling interests | (2,551 | ) | | (1,076 | ) |
| Cash dividends paid | (152,787 | ) | | (137,616 | ) |
| Other financing activities | (4,979 | ) | | (3,234 | ) |
| Cash Flows from (used in) Financing Activities | 123,151 |
| | (149,617 | ) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 706 |
| | (727 | ) |
| CASH AND CASH EQUIVALENTS: | | | |
| Beginning of period | 3,231 |
| | 4,556 |
|
| End of period | $ | 3,937 |
| | $ | 3,829 |
|
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended September 30, 2016 should be read in conjunction with this financial information.
Page 4
Westar Energy, Inc.
3rd Quarter 2016 vs. 2015
|
| | | | | | | | | | | | | | |
| Earnings Variances | | | | | | | | |
| | | | | | Change | | | | |
| | | | ($ per share) | | (Dollars in Thousands) | | | | ($ per share) |
| September 30, 2015 basic earnings attributable to common stock | | | | $ | 138,003 |
| | | | $ | 0.97 |
|
| | | | | | | | | | |
| | | | Favorable/(Unfavorable) |
| | | | | | | | | | |
| | Gross Margin | | | | 39,643 |
| | A | | |
| | Operating and maintenance | | | | (6,314 | ) | | B | | |
| | Depreciation and amortization | | | | (7,788 | ) | | C | | |
| | Selling, general and administrative | | | | (97 | ) | | | | |
| | Taxes other than income tax | | | | (10,472 | ) | | D | | |
| | Other income (expense) | | | | 14,526 |
| | E | | |
| | Interest expense | | | | 3,409 |
| | F | | |
| | Income tax expense | | | | (14,918 | ) | | G | | |
| | Net income attributable to noncontrolling interests | | | | (1,272 | ) | | | | |
| | Change in shares outstanding | | — |
| | | | | | |
| | | | | | | | | | |
| September 30, 2016 basic earnings attributable to common stock | | | | $ | 154,720 |
| | | | $ | 1.09 |
|
| | | | | | | | | | |
| | Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable) |
| | |
| A | Due primarily to: general rate case increase of $78.0M (annual); and estimated annual transmission margin increase of $19.1M, which includes an SPP assessment of $(7.0M)
|
| | | | | | | | | | |
| B | Due primarily to: higher distribution operating and maintenance expense partially due to improving long-term reliability in 2016 -- ($3.9M); higher operating and maintenance costs at coal fired plants due primarily to scheduled outages -- ($2.4M); partially offset by decrease in operating and maintenance expenses resulting from power plant retirements in late 2015 -- $4.2M |
| | | | | | | | | | |
| C | Due principally to property additions |
| | | | | | | | | | |
| D | Due primarily to higher property tax expense that is largely offset by increased prices -- ($10.6M) |
| | | | | | | | | | |
| E | Due primarily to: higher COLI benefit -- $10.4M; and an increase in equity AFUDC -- $2.7M
|
| | | | | | | | | | |
| F | Due primarily to: increase in debt AFUDC -- $2.1M; and decrease in interest expense of long-term debt of VIEs due to refinancing -- $1.5M |
| | | | | | | | | | |
| G | Due primarily to higher income before income taxes |
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended September 30, 2016 should be read in conjunction with this financial information.
Page 5
Westar Energy, Inc.
YTD September 2016 vs. 2015 |
| | | | | | | | | | | | | | |
| Earnings Variances | | | | | | | | |
| | | | | | Change | | | | |
| | | | ($ per share) | | (Dollars in Thousands) | | | | ($ per share) |
| September 30, 2015 basic earnings attributable to common stock | | | | $ | 252,693 |
| | | | $ | 1.84 |
|
| | | | | | | | | | |
| | | | Favorable/(Unfavorable) |
| | | | | | | | | | |
| | Gross Margin | | | | 125,222 |
| | A | | |
| | Operating and maintenance | | | | (1,872 | ) | | | | |
| | Depreciation and amortization | | | | (24,309 | ) | | B | | |
| | Selling, general and administrative | | | | (13,195 | ) | | C | | |
| | Taxes other than income tax | | | | (32,482 | ) | | D | | |
| | Other income (expense) | | | | 9,528 |
| | E | | |
| | Interest expense | | | | 13,109 |
| | F | | |
| | Income tax expense | | | | (32,566 | ) | | G | | |
| | Net income attributable to noncontrolling interests | | | | (3,483 | ) | | | | |
| | Change in shares outstanding | | (0.07 | ) | | | | | | |
| | | | | | | | | | |
| September 30, 2016 basic earnings attributable to common stock | | | | $ | 292,645 |
| | | | $ | 2.06 |
|
| | | | | | | | | | |
| | Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable) |
| | |
| A | Due primarily to: general rate case increase of $78.0M (annual); estimated annual transmission margin increase of $19.1M which includes an SPP assessment of $(7.0M)
|
| | | | | | | | | | |
| B | Due principally to property additions
|
| | | | | | | | | | |
| C | Due primarily to: merger-related expenses -- ($9.8M); increase in outside services related principally to technology services -- ($4.2M); partially offset by decrease in employee benefit costs -- $4.5M
|
| | | | | | | | | | |
| D | Due primarily to higher property tax expense that is largely offset by increased prices -- ($33.4M)
|
| | | | | | | | | | |
| E | Due primarily to: an increase in equity AFUDC -- $5.9M; and higher COLI benefit -- $3.1M
|
| | | | | | | | | | |
| F | Due primarily to: decrease in interest expense of long-term debt due to refinancing -- $6.5M; decrease in interest expense of long-term debt of VIEs due to refinancing -- $4.1M; and increase in debt AFUDC -- $3.8M
|
| | | | | | | | | | |
| G | 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 September 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 September 30, |
| | 2016 | | 2015 | | Change | | % Change |
| Revenues | (Dollars In Thousands) |
| Residential | $ | 282,272 |
| | $ | 255,804 |
| | $ | 26,468 |
| | 10.3 |
|
| Commercial | 218,377 |
| | 213,461 |
| | 4,916 |
| | 2.3 |
|
| Industrial | 106,021 |
| | 105,307 |
| | 714 |
| | 0.7 |
|
| Other retail | 3,908 |
| | 3,430 |
| | 478 |
| | 13.9 |
|
| Provision for rate refunds | 3,975 |
| | (1,810 | ) | | 5,785 |
| | 319.6 |
|
| Total Retail Revenues | 614,553 |
| | 576,192 |
| | 38,361 |
| | 6.7 |
|
| Tariff-based wholesale | 70,923 |
| | 70,501 |
| | 422 |
| | 0.6 |
|
| Market-based wholesale | 15,498 |
| | 17,417 |
| | (1,919 | ) | | (11.0 | ) |
| Transmission | 58,462 |
| | 61,190 |
| | (2,728 | ) | | (4.5 | ) |
| Other | 5,218 |
| | 7,529 |
| | (2,311 | ) | | (30.7 | ) |
| Total Revenues | $ | 764,654 |
| | $ | 732,829 |
| | $ | 31,825 |
| | 4.3 |
|
| | | | | | | | |
| | | | | | | | |
| Electricity Sales | (Thousands of MWh) |
| Residential | 2,209 |
| | 2,168 |
| | 41 |
| | 1.9 |
|
| Commercial | 2,230 |
| | 2,221 |
| | 9 |
| | 0.4 |
|
| Industrial | 1,444 |
| | 1,463 |
| | (19 | ) | | (1.3 | ) |
| Other retail | 19 |
| | 21 |
| | (2 | ) | | (9.5 | ) |
| Total Retail | 5,902 |
| | 5,873 |
| | 29 |
| | 0.5 |
|
| Tariff-based wholesale | 1,380 |
| | 1,337 |
| | 43 |
| | 3.2 |
|
| Market-based wholesale | 1,009 |
| | 863 |
| | 146 |
| | 16.9 |
|
| Total wholesale | 2,389 |
| | 2,200 |
| | 189 |
| | 8.6 |
|
| Total Electricity Sales | 8,291 |
| | 8,073 |
| | 218 |
| | 2.7 |
|
| | | | | | | | |
| | (Dollars per MWh) |
| Total retail | $ | 104.13 |
| | $ | 98.11 |
| | $ | 6.02 |
| | 6.1 |
|
| Tariff-based wholesale | $ | 51.39 |
| | $ | 52.73 |
| | $ | (1.34 | ) | | (2.5 | ) |
| Market-based wholesale | $ | 15.36 |
| | $ | 20.18 |
| | $ | (4.82 | ) | | (23.9 | ) |
| | | | | | | | |
| | | | | | | | |
| Fuel and Purchased Power | (Dollars In Thousands) |
| Fuel used for generation | $ | 131,390 |
| | $ | 132,272 |
| | $ | (882 | ) | | (0.7 | ) |
| Purchased power | 43,676 |
| | 36,960 |
| | 6,716 |
| | 18.2 |
|
| Subtotal | 175,066 |
| | 169,232 |
| | 5,834 |
| | 3.4 |
|
| RECA recovery and other | (19,393 | ) | | (5,289 | ) | | (14,104 | ) | | (266.7 | ) |
| Total fuel and purchased power expense | $ | 155,673 |
| | $ | 163,943 |
| | $ | (8,270 | ) | | (5.0 | ) |
| | | | | | | | |
| Electricity Supply | (Thousands of MWh) |
| Generated - Gas | 631 |
| | 571 |
| | 60 |
| | 10.5 |
|
| Coal | 5,254 |
| | 5,220 |
| | 34 |
| | 0.7 |
|
| Nuclear | 840 |
| | 1,240 |
| | (400 | ) | | (32.3 | ) |
| Wind | 84 |
| | 90 |
| | (6 | ) | | (6.7 | ) |
| Subtotal electricity generated | 6,809 |
| | 7,121 |
| | (312 | ) | | (4.4 | ) |
| Purchased | 1,673 |
| | 1,201 |
| | 472 |
| | 39.3 |
|
| Total Electricity Supply | 8,482 |
| | 8,322 |
| | 160 |
| | 1.9 |
|
| | | | | | | | |
| | (Dollars per MWh) |
| Average cost of fuel used for generation | $ | 19.30 |
| | $ | 18.57 |
| | $ | 0.73 |
| | 3.9 |
|
| Average cost of purchased power | $ | 26.11 |
| | $ | 30.77 |
| | $ | (4.66 | ) | | (15.1 | ) |
| Average cost of fuel and purchased power | $ | 20.64 |
| | $ | 20.34 |
| | $ | 0.30 |
| | 1.5 |
|
| | | | | | | | |
| | | | | | | | |
| Degree Days | | | 2015/ | | | | |
| | 2016 | | 20 yr Avg | | Change | | % Change |
| Cooling | | | | | | | |
| Actual compared to last year | 1,285 |
| | 1,205 |
| | 80 |
| | 6.6 |
|
| Actual compared to 20 year average | 1,285 |
| | 1,123 |
| | 162 |
| | 14.4 |
|
| Heating | | | | | | |
|
|
| Actual compared to last year | 15 |
| | 4 |
| | 11 |
| | 275.0 |
|
| Actual compared to 20 year average | 15 |
| | 44 |
| | (29 | ) | | (65.9 | ) |
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended September 30, 2016 should be read in conjunction with this financial information.
Page 7
Westar Energy, Inc.
Revenue, Sales and Energy Supply
|
| | | | | | | | | | | | | | |
| Supplemental Data | Nine Months Ended September 30, |
| | 2016 | | 2015 | | Change | | % Change |
| Revenues | (Dollars In Thousands) |
| Residential | $ | 664,400 |
| | $ | 610,775 |
| | $ | 53,625 |
| | 8.8 |
|
| Commercial | 572,247 |
| | 550,761 |
| | 21,486 |
| | 3.9 |
|
| Industrial | 314,723 |
| | 304,937 |
| | 9,786 |
| | 3.2 |
|
| Other retail | 11,761 |
|
| 10,436 |
| | 1,325 |
| | 12.7 |
|
| Provision for rate refunds | (34,763 | ) | | (15,939 | ) | | (18,824 | ) | | (118.1 | ) |
| Total Retail Revenues | 1,528,368 |
| | 1,460,970 |
| | 67,398 |
| | 4.6 |
|
| Tariff-based wholesale | 186,203 |
| | 187,524 |
| | (1,321 | ) | | (0.7 | ) |
| Market-based wholesale | 34,317 |
| | 61,978 |
| | (27,661 | ) | | (44.6 | ) |
| Transmission | 188,996 |
| | 181,070 |
| | 7,926 |
| | 4.4 |
|
| Other | 17,668 |
| | 21,657 |
| | (3,989 | ) | | (18.4 | ) |
| Total Revenues | $ | 1,955,552 |
| | $ | 1,913,199 |
| | $ | 42,353 |
| | 2.2 |
|
| | | | | | | | |
| | | | | | | | |
| Electricity Sales | (Thousands of MWh) |
| Residential | 5,097 |
| | 5,108 |
| | (11 | ) | | (0.2 | ) |
| Commercial | 5,763 |
| | 5,787 |
| | (24 | ) | | (0.4 | ) |
| Industrial | 4,137 |
| | 4,195 |
| | (58 | ) | | (1.4 | ) |
| Other retail | 60 |
| | 63 |
| | (3 | ) | | (4.8 | ) |
| Total Retail | 15,057 |
| | 15,153 |
| | (96 | ) | | (0.6 | ) |
| Tariff-based wholesale | 3,290 |
| | 3,718 |
| | (428 | ) | | (11.5 | ) |
| Market-based wholesale | 2,670 |
| | 3,099 |
| | (429 | ) | | (13.8 | ) |
| Total wholesale | 5,960 |
| | 6,817 |
| | (857 | ) | | (12.6 | ) |
| Total Electricity Sales | 21,017 |
| | 21,970 |
| | (953 | ) | | (4.3 | ) |
| | | | | | | | |
| | (Dollars per MWh) |
| Total retail | $ | 101.51 |
| | $ | 96.41 |
| | $ | 5.10 |
| | 5.3 |
|
| Tariff-based wholesale | $ | 56.60 |
| | $ | 50.44 |
| | $ | 6.16 |
| | 12.2 |
|
| Market-based wholesale | $ | 12.85 |
| | $ | 20.00 |
| | $ | (7.15 | ) | | (35.8 | ) |
| | | | | | | | |
| | | | | | | | |
| Fuel and Purchased Power | (Dollars In Thousands) |
| Fuel used for generation | $ | 305,008 |
| | $ | 346,689 |
| | $ | (41,681 | ) | | (12.0 | ) |
| Purchased power | 116,577 |
| | 116,002 |
| | 575 |
| | 0.5 |
|
| Subtotal | 421,585 |
| | 462,691 |
| | (41,106 | ) | | (8.9 | ) |
| RECA recovery and other | (47,224 | ) | | (3,187 | ) | | (44,037 | ) | | nm |
|
| Total fuel and purchased power expense | $ | 374,361 |
| | $ | 459,504 |
| | $ | (85,143 | ) | | (18.5 | ) |
| | | | | | | | |
| Electricity Supply | (Thousands of MWh) |
| Generated - Gas | 1,328 |
| | 1,121 |
| | 207 |
| | 18.5 |
|
| Coal | 11,915 |
| | 14,213 |
| | (2,298 | ) | | (16.2 | ) |
| Nuclear | 3,334 |
| | 2,790 |
| | 544 |
| | 19.5 |
|
| Wind | 306 |
| | 301 |
| | 5 |
| | 1.7 |
|
| Subtotal electricity generated | 16,883 |
| | 18,425 |
| | (1,542 | ) | | (8.4 | ) |
| Purchased | 4,683 |
| | 4,142 |
| | 541 |
| | 13.1 |
|
| Total Electricity Supply | 21,566 |
| | 22,567 |
| | (1,001 | ) | | (4.4 | ) |
| | | | | | | | |
| | (Dollars per MWh) |
| Average cost of fuel used for generation | $ | 18.07 |
| | $ | 18.82 |
| | $ | (0.75 | ) | | (4.0 | ) |
| Average cost of purchased power | $ | 24.89 |
| | $ | 28.01 |
| | $ | (3.12 | ) | | (11.1 | ) |
| Average cost of fuel and purchased power | $ | 19.55 |
| | $ | 20.50 |
| | $ | (0.95 | ) | | (4.6 | ) |
| | | | | | | | |
| | | | | | | | |
| Degree Days | | | 2015/ | | | | |
| | 2016 | | 20 yr Avg | | Change | | % Change |
| Cooling | | | | | | | |
| Actual compared to last year | 1,882 |
| | 1,744 |
| | 138 |
| | 7.9 |
|
| Actual compared to 20 year average | 1,882 |
| | 1,583 |
| | 299 |
| | 18.9 |
|
| Heating | | | | | | | |
| Actual compared to last year | 2,382 |
| | 2,707 |
| | (325 | ) | | (12.0 | ) |
| Actual compared to 20 year average | 2,382 |
| | 2,859 |
| | (477 | ) | | (16.7 | ) |
| 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 September 30, 2016 should be read in conjunction with this financial information.
Page 8
Westar Energy, Inc.
|
| | | | | | | | | | | | | | |
| Capitalization |
| | | September 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 | | 3,388,221 |
| | | | 3,163,950 |
| | |
| Long-term debt of variable interest entities, net | | 111,218 |
| | | | 138,097 |
| | |
| Total long-term debt | | 3,651,281 |
| | 48.9 | % | | 3,330,356 |
| | 47.6 | % |
| Common equity | | 3,800,967 |
| | 50.8 | % | | 3,656,721 |
| | 52.2 | % |
| Noncontrolling interests | | 23,451 |
| | 0.3 | % | | 15,242 |
| | 0.2 | % |
| Total capitalization | | $ | 7,475,699 |
| | 100.0 | % | | $ | 7,002,319 |
| | 100.0 | % |
| | | | | | | | | |
| GAAP Book value per share | | $ | 26.82 |
| | | | $ | 25.87 |
| |
|
|
| Period end shares outstanding (in thousands) | | 141,744 |
| | | | 141,353 |
| | |
| | | | | | | | | |
| Outstanding Long-Term Debt |
| | | | | | | | | |
| | CUSIP | September 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 | | (10,491 | ) | | | | (10,374 | ) | | |
| Unamortized debt issuance expense | | (28,228 | ) | | | | (27,616 | ) | | |
| Long-term debt due within one year | | (125,000 | ) | | | | — |
| | |
| Total long-term debt, net | | $ | 3,388,221 |
| | | | $ | 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 September 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 nine months ended September 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 September 30, | | Nine Months Ended September 30, |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| | (Dollars in Thousands) |
| Revenues | $ | 764,654 |
| | $ | 732,829 |
|
| $ | 31,825 |
|
| $ | 1,955,552 |
|
| $ | 1,913,199 |
|
| $ | 42,353 |
|
| Less: Fuel and purchased power expense | 155,673 |
| | 163,943 |
| | (8,270 | ) | | 374,361 |
| | 459,504 |
| | (85,143 | ) |
| SPP network transmission costs | 57,939 |
| | 57,487 |
| | 452 |
| | 173,925 |
| | 171,651 |
| | 2,274 |
|
| Gross Margin | $ | 551,042 |
|
| $ | 511,399 |
|
| $ | 39,643 |
|
| $ | 1,407,266 |
|
| $ | 1,282,044 |
|
| $ | 125,222 |
|
| | | | | | | | | | | | |
| Gross margin | $ | 551,042 |
| | $ | 511,399 |
| | $ | 39,643 |
| | $ | 1,407,266 |
| | $ | 1,282,044 |
| | $ | 125,222 |
|
| Less: Operating and maintenance expense | 86,758 |
| | 80,444 |
| | 6,314 |
| | 250,135 |
| | 248,263 |
| | 1,872 |
|
| Depreciation and amortization expense | 84,972 |
| | 77,184 |
| | 7,788 |
| | 252,838 |
| | 228,529 |
| | 24,309 |
|
| Selling, general and administrative expense | 60,582 |
| | 60,485 |
| | 97 |
| | 192,762 |
| | 179,567 |
| | 13,195 |
|
| Taxes other than income tax | 48,154 |
| | 37,682 |
| | 10,472 |
| | 145,529 |
| | 113,047 |
| | 32,482 |
|
| Income from operations | $ | 270,576 |
| | $ | 255,604 |
|
| $ | 14,972 |
|
| $ | 566,002 |
|
| $ | 512,638 |
|
| $ | 53,364 |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | |
The Notes to the Condensed Consolidated Financial Statements in the company's Quarterly Report on Form 10-Q
for the period ended September 30, 2016 should be read in conjunction with this financial information.
Page 10
