Evergy Kansas Central 8-K Westar Energy Announces 2016 Results

Exhibit 99.2

Westar Energy, Inc.

Fourth Quarter and Year-end 2016 Earnings

Released February 22, 2017

Contents	Page
Consolidated Statements of Income	2
Consolidated Balance Sheets	4
Consolidated Statements of Cash Flows	5
Earnings Variances	6
Supplemental Data	8
Capitalization & Long-Term Debt Table	10
GAAP to Non-GAAP Reconciliation	11
Supplemental Slides
2017 - 2021 Capital Forecast	12
Dividend	13

Cody VandeVelde

Director Investor Relations

785-575-8227

cody.vandevelde@WestarEnergy.com

NOTE:

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K for the period ended December 31, 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.

Consolidated Statements of Income

(Unaudited)

	Three Months Ended December 31,
	2016			2015			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	174,598		$	157,843		$	16,755		10.6
Commercial	168,819			161,640			7,179			4.4
Industrial	98,575			95,751			2,824			2.9
Other retail	7,989			(11,654		)	19,643			168.6
Total Retail Revenues	449,981			403,580			46,401			11.5
Wholesale	84,351			68,869			15,482			22.5
Transmission	64,717			60,765			3,952			6.5
Other	7,486			12,751			(5,265		)	(41.3	)
Total Revenues	606,535			545,965			60,570			11.1
OPERATING EXPENSES:
Fuel and purchased power	135,135			101,561			33,574			33.1
SPP network transmission costs	58,838			57,392			1,446			2.5
Operating and maintenance	96,178			82,026			14,152			17.3
Depreciation and amortization	85,681			82,062			3,619			4.4
Selling, general and administrative	68,689			70,711			(2,022		)	(2.9	)
Taxes other than income	46,133			43,854			2,279			5.2
Total Operating Expenses	490,654			437,606			53,048			12.1
INCOME FROM OPERATIONS	115,881			108,359			7,522			6.9
OTHER INCOME (EXPENSE):
Investment earnings	2,097			3,372			(1,275		)	(37.8	)
Other income	8,369			866			7,503			866.4
Other expense	(3,672		)	(3,899		)	227			5.8
Total Other Income	6,794			339			6,455			nm
Interest expense	40,715			42,682			(1,967		)	(4.6	)
INCOME BEFORE INCOME TAXES	81,960			66,016			15,944			24.2
Income tax expense	24,165			24,190			(25		)	(0.1	)
NET INCOME	57,795			41,826			15,969			38.2
Less: Net income attributable to noncontrolling interests	3,863			2,591			1,272			49.1
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	$	53,932		$	39,235		$	14,697		37.5
Earnings per common share, basic	$	0.38		$	0.28		$	0.10		35.7
Diluted earnings per common share	$	0.38		$	0.28		$	0.10		35.7
Weighted average equivalent common shares outstanding – basic (in thousands)	142,152			141,713			439			0.3
Weighted average equivalent common shares outstanding – diluted (in thousands)	142,659			142,057			602			0.4
DIVIDENDS DECLARED PER COMMON SHARE	$	0.38		$	0.36		$	0.02		5.6
Effective income tax rate	29		%	37		%
nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 2

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)

	Twelve Months Ended December 31,
	2016			2015			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	838,998		$	768,618		$	70,380		9.2
Commercial	741,066			712,400			28,666			4.0
Industrial	413,298			400,687			12,611			3.1
Other retail	(15,013		)	(17,155		)	2,142			12.5
Total Retail Revenues	1,978,349			1,864,550			113,799			6.1
Wholesale	304,871			318,371			(13,500		)	(4.2	)
Transmission	253,713			241,835			11,878			4.9
Other	25,154			34,408			(9,254		)	(26.9	)
Total Revenues	2,562,087			2,459,164			102,923			4.2
OPERATING EXPENSES:
Fuel and purchased power	509,496			561,065			(51,569		)	(9.2	)
SPP network transmission costs	232,763			229,043			3,720			1.6
Operating and maintenance	346,313			330,289			16,024			4.9
Depreciation and amortization	338,519			310,591			27,928			9.0
Selling, general and administrative	261,451			250,278			11,173			4.5
Taxes other than income	191,662			156,901			34,761			22.2
Total Operating Expenses	1,880,204			1,838,167			42,037			2.3
INCOME FROM OPERATIONS	681,883			620,997			60,886			9.8
OTHER INCOME (EXPENSE):
Investment earnings	9,013			7,799			1,214			15.6
Other income	34,582			19,438			15,144			77.9
Other expense	(18,012		)	(17,636		)	(376		)	(2.1	)
Total Other Income	25,583			9,601			15,982			166.5
Interest expense	161,726			176,802			(15,076		)	(8.5	)
INCOME BEFORE INCOME TAXES	545,740			453,796			91,944			20.3
Income tax expense	184,540			152,000			32,540			21.4
NET INCOME	361,200			301,796			59,404			19.7
Less: Net income attributable to noncontrolling interests	14,623			9,867			4,756			48.2
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	$	346,577		$	291,929		$	54,648		18.7
Earnings per common share, basic	$	2.43		$	2.11		$	0.32		15.2
Diluted earnings per common share	$	2.43		$	2.09		$	0.34		16.3
Weighted average equivalent common shares outstanding – basic (in thousands)	142,068			137,958			4,110			3.0
Weighted average equivalent common shares outstanding – diluted (in thousands)	142,475			139,278			$	3,197		2.3
DIVIDENDS DECLARED PER COMMON SHARE	$	1.52		$	1.44		$	0.08		5.6
Effective income tax rate	34		%	33		%

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 3

Westar Energy, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except Par Values)

(Unaudited)

	December 31, 2016		December 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,066	$	3,231
Accounts receivable, net of allowance for doubtful accounts of $6,667 and $5,294, respectively	288,579		258,286
Fuel inventory and supplies	300,125		301,294
Taxes receivable	13,000		—
Prepaid expenses	16,528		16,864
Regulatory assets	117,383		109,606
Other	29,701		27,860
Total Current Assets	768,382		717,141
PROPERTY, PLANT AND EQUIPMENT, NET	9,248,359		8,524,902
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET	257,904		268,239
OTHER ASSETS:
Regulatory assets	762,479		751,312
Nuclear decommissioning trust	200,122		184,057
Other	249,828		260,015
Total Other Assets	1,212,429		1,195,384
TOTAL ASSETS	$	11,487,074	$	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	366,700		250,300
Accounts payable	220,522		220,969
Accrued dividends	52,885		49,829
Accrued taxes	85,729		83,773
Accrued interest	72,519		71,426
Regulatory liabilities	15,760		25,697
Other	81,236		106,632
Total Current Liabilities	1,047,193		836,935
LONG-TERM LIABILITIES:
Long-term debt, net	3,388,670		3,163,950
Long-term debt of variable interest entities, net	111,209		138,097
Deferred income taxes	1,752,776		1,591,430
Unamortized investment tax credits	210,654		209,763
Regulatory liabilities	223,693		267,114
Accrued employee benefits	512,412		462,304
Asset retirement obligations	323,951		275,285
Other	83,326		88,825
Total Long-Term Liabilities	6,606,691		6,196,768
COMMITMENTS AND CONTINGENCIES (See Notes 14 and 16)
EQUITY:
Westar Energy, Inc. Shareholders’ Equity:
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 141,791,153 shares and 141,353,426 shares, respective to each date	708,956		706,767
Paid-in capital	2,018,317		2,004,124
Retained earnings	1,078,602		945,830
Total Westar Energy, Inc. Shareholders’ Equity	3,805,875		3,656,721
Noncontrolling Interests	27,315		15,242
Total Equity	3,833,190		3,671,963
TOTAL LIABILITIES AND EQUITY	$	11,487,074	$	10,705,666

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 4

Westar Energy, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Twelve Months Ended December 31,
	2016			2015
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	361,200		$	301,796
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	338,519			310,591
Amortization of nuclear fuel	26,714			26,974
Amortization of deferred regulatory gain from sale leaseback	(5,495		)	(5,495		)
Amortization of corporate-owned life insurance	18,042			19,850
Non-cash compensation	9,353			8,345
Net deferred income taxes and credits	185,229			151,332
Allowance for equity funds used during construction	(11,630		)	(2,075		)
Changes in working capital items:
Accounts receivable	(30,294		)	9,042
Fuel inventory and supplies	1,790			(53,263		)
Prepaid expenses and other	(7,431		)	(23,145		)
Accounts payable	(8,149		)	6,636
Accrued taxes	(5,942		)	13,073
Other current liabilities	(86,359		)	(80,396		)
Changes in other assets	18,346			2,199
Changes in other liabilities	18,527			30,386
Cash Flows from Operating Activities	822,420			715,850
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(1,086,970		)	(700,228		)
Purchase of securities - trust	(46,581		)	(37,557		)
Sale of securities - trust	47,026			37,930
Investment in corporate-owned life insurance	(14,648		)	(14,845		)
Proceeds from investment in corporate-owned life insurance	92,677			66,794
Investment in affiliated company	(655		)	(575		)
Other investing activities	(3,609		)	(1,223		)
Cash Flows used in Investing Activities	(1,012,760		)	(649,704		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	116,162			(7,300		)
Proceeds from long-term debt	396,290			543,881
Proceeds from long-term debt of variable interest entities	162,048			—
Retirements of long-term debt	(50,000		)	(635,891		)
Retirements of long-term debt of variable interest entities	(190,357		)	(27,933		)
Repayment of capital leases	(3,104		)	(2,591		)
Borrowings against cash surrender value of corporate-owned life insurance	57,850			59,431
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(89,284		)	(64,593		)
Issuance of common stock	2,439			257,998
Distributions to shareholders of noncontrolling interests	(2,550		)	(1,076		)
Cash dividends paid	(204,340		)	(186,120		)
Other financing activities	(4,979		)	(3,277		)
Cash Flows from (used in) Financing Activities	190,175			(67,471		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(165		)	(1,325		)
CASH AND CASH EQUIVALENTS:
Beginning of period	3,231			4,556
End of period	$	3,066		$	3,231

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 5

Westar Energy, Inc.

4th Quarter 2016 vs. 2015

Earnings Variances
			Change
		($ per share)	(Dollars in Thousands)				($ per share)
2015 earnings attributable to common stock			$	39,235			$	0.28
		Favorable/(Unfavorable)
	Gross Margin		25,550			A
	Operating and maintenance		(14,152		)	B
	Depreciation and amortization		(3,619		)	C
	Selling, general and administrative		2,022
	Taxes other than income taxes		(2,279		)
	Other income (expense)		6,455			D
	Interest expense		1,967
	Income tax expense		25
	Net income attributable to noncontrolling interests		(1,272		)
	Change in shares outstanding	—
2016 earnings attributable to common stock			$	53,932			$	0.38
	Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A	Due primarily to: general rate case increase of $78.0M (annual); annual transmission margin increase of $13.7M; and a 9% increase in heating degree days due to mild weather in 2015
B	Due primarily to: higher transmission and distribution operating and maintenance costs partially due to improving long-term reliability -- ($6.9M); higher costs at coal-fired plants primarily due to planned outages -- ($6.8M); partially offset by decrease in costs resulting from power plant retirements in late 2015 -- $1.9M
C	Due primarily to property additions
D	Due primarily to: higher COLI benefit -- $4.1M; and an increase in equity AFUDC -- $3.7M

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 6

Westar Energy, Inc.

YTD December 2016 vs. 2015

Earnings Variances
				Change
		($ per share)		(Dollars in Thousands)				($ per share)
2015 earnings attributable to common stock				$	291,929			$	2.11
		Favorable/(Unfavorable)
	Gross Margin			150,772			A
	Operating and maintenance			(16,024		)	B
	Depreciation and amortization			(27,928		)	C
	Selling, general and administrative			(11,173		)	D
	Taxes other than income			(34,761		)	E
	Other income (expense)			15,982			F
	Interest expense			15,076			G
	Income tax expense			(32,540		)	H
	Net income attributable to noncontrolling interests			(4,756		)
	Change in shares outstanding	(0.08	)
2016 earnings attributable to common stock				$	346,577			$	2.43
	Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A	Due primarily to: general rate case increase of $78.0M (annual); annual transmission margin increase of $13.7M; and a 10% increase in cooling degree days due to warmer summer weather
B	Due primarily to: higher costs at coal fired plants due to scheduled outages -- ($14.1M); higher transmission and distribution operating and maintenance costs partially due to improving long-term reliability -- ($4.3M); and higher decommissioning costs for Wolf Creek which is offset in retail revenues -- ($3.0M); partially offset by decrease in costs resulting from power plant retirements in late 2015 -- $9.8M
C	Due primarily to property additions
D	Due primarily to: merger-related expenses -- ($10.2M); increase in allowance for uncollectible accounts -- ($3.5M); and an increase in outside services related principally to technology services -- ($2.7M); partially offset by decrease in employee benefit costs due primarily to reduced post-retirement medical costs -- $7.6M
E	Due primarily to higher property tax expense that is largely offset by increased prices -- ($36.1M)
F	Due primarily to: an increase in equity AFUDC -- $9.6M; and higher COLI benefit -- $7.2M
G	Due primarily to: increase in debt AFUDC -- $6.5M; decrease in interest expense of long-term debt of VIEs due to refinancing -- $5.7M; and decrease in interest expense of long-term debt due to refinancing -- $4.8M
H	Due primarily to higher income before income taxes

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 7

Westar Energy, Inc.

Revenue, Sales and Energy Supply

Supplemental Data	Three Months Ended December 31,
	2016			2015			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	174,598		$	157,843		$	16,755		10.6
Commercial	168,819			161,640			7,179			4.4
Industrial	98,575			95,751			2,824			2.9
Other retail	3,923			3,675			248			6.7
Provision for rate refunds	4,066			(15,329		)	19,395			126.5
Total Retail Revenues	449,981			403,580			46,401			11.5
Tariff-based wholesale	63,141			57,425			5,716			10.0
Market-based wholesale	21,210			11,444			9,766			85.3
Transmission	64,717			60,765			3,952			6.5
Other	7,486			12,751			(5,265		)	(41.3	)
Total Revenues	$	606,535		$	545,965		$	60,570		11.1
Electricity Sales	(Thousands of MWh)
Residential	1,337			1,257			80			6.4
Commercial	1,780			1,713			67			3.9
Industrial	1,361			1,307			54			4.1
Other retail	19			20			(1		)	(5.0	)
Total Retail	4,497			4,297			200			4.7
Tariff-based wholesale	1,100			913			187			20.5
Market-based wholesale	1,239			763			476			62.4
Total wholesale	2,339			1,676			663			39.6
Total Electricity Sales	6,836			5,973			863			14.4
	(Dollars per MWh)
Total retail	$	100.06		$	93.92		$	6.14		6.5
Tariff-based wholesale	$	57.40		$	62.90		$	(5.50	)	(8.7	)
Market-based wholesale	$	17.12		$	15.00		$	2.12		14.1
Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	98,206		$	80,475		$	17,731		22.0
Purchased power	47,430			40,232			7,198			17.9
Subtotal	145,636			120,707			24,929			20.7
RECA recovery and other	(10,501		)	(19,146		)	8,645			45.2
Total fuel and purchased power expense	$	135,135		$	101,561		$	33,574		33.1
Electricity Supply	(Thousands of MWh)
Generated - Gas	397			181			216			119.3
Coal	3,988			3,139			849			27.0
Nuclear	542			1,267			(725		)	(57.2	)
Wind	115			121			(6		)	(5.0	)
Subtotal electricity generated	5,042			4,708			334			7.1
Purchased	1,923			1,585			338			21.3
Total Electricity Supply	6,965			6,293			672			10.7
	(Dollars per MWh)
Average cost of fuel used for generation	$	19.48		$	17.09		$	2.39		14.0
Average cost of purchased power	$	24.66		$	25.38		$	(0.72	)	(2.8	)
Average cost of fuel and purchased power	$	20.91		$	19.18		$	1.73		9.0
Degree Days				2015/
	2016			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	97			57			40			70.2
Actual compared to 20 year average	97			40			57			142.5
Heating
Actual compared to last year	1,497			1,372			125			9.1
Actual compared to 20 year average	1,497			1,808			(311		)	(17.2	)

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

Page 8

Westar Energy, Inc.

Revenue, Sales and Energy Supply

Supplemental Data	Twelve Months Ended December 31,
	2016			2015			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	838,998		$	768,618		$	70,380		9.2
Commercial	741,066			712,400			28,666			4.0
Industrial	413,298			400,687			12,611			3.1
Other retail	15,683			14,113			1,570			11.1
Provision for rate refunds	(30,696		)	(31,268		)	572			1.8
Total Retail Revenues	1,978,349			1,864,550			113,799			6.1
Tariff-based wholesale	249,344			244,949			4,395			1.8
Market-based wholesale	55,527			73,422			(17,895		)	(24.4	)
Transmission	253,713			241,835			11,878			4.9
Other	25,154			34,408			(9,254		)	(26.9	)
Total Revenues	$	2,562,087		$	2,459,164		$	102,923		4.2
Electricity Sales	(Thousands of MWh)
Residential	6,434			6,364			70			1.1
Commercial	7,544			7,500			44			0.6
Industrial	5,499			5,502			(3		)	(0.1	)
Other retail	77			84			(7		)	(8.3	)
Total Retail	19,554			19,450			104			0.5
Tariff-based wholesale	4,391			4,631			(240		)	(5.2	)
Market-based wholesale	3,908			3,861			47			1.2
Total wholesale	8,299			8,492			(193		)	(2.3	)
Total Electricity Sales	27,853			27,942			(89		)	(0.3	)
	(Dollars per MWh)
Total retail	$	101.17		$	95.86		$	5.31		5.5
Tariff-based wholesale	$	56.79		$	52.89		$	3.90		7.4
Market-based wholesale	$	14.21		$	19.02		$	(4.81	)	(25.3	)
Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	403,214		$	427,164		$	(23,950	)	(5.6	)
Purchased power	164,007			156,234			7,773			5.0
Subtotal	567,221			583,398			(16,177		)	(2.8	)
RECA recovery and other	(57,725		)	(22,333		)	(35,392		)	(158.5	)
Total fuel and purchased power expense	$	509,496		$	561,065		$	(51,569	)	(9.2	)
Electricity Supply	(Thousands of MWh)
Generated - Gas	1,724			1,302			422			32.4
Coal	15,903			17,352			(1,449		)	(8.4	)
Nuclear	3,876			4,056			(180		)	(4.4	)
Wind	422			422			—			—
Subtotal electricity generated	21,925			23,132			(1,207		)	(5.2	)
Purchased	6,607			5,727			880			15.4
Total Electricity Supply	28,532			28,859			(327		)	(1.1	)
	(Dollars per MWh)
Average cost of fuel used for generation	$	18.39		$	18.47		$	(0.08	)	(0.4	)
Average cost of purchased power	$	24.82		$	27.28		$	(2.46	)	(9.0	)
Average cost of fuel and purchased power	$	19.88		$	20.22		$	(0.34	)	(1.7	)
Degree Days				2015/
	2016			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	1,977			1,801			176			9.8
Actual compared to 20 year average	1,977			1,622			355			21.9
Heating
Actual compared to last year	3,879			4,079			(200		)	(4.9	)
Actual compared to 20 year average	3,879			4,668			(789		)	(16.9	)

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

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Westar Energy, Inc.

Capitalization
		December 31, 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		3,388,670					3,163,950
Long-term debt of variable interest entities, net		111,209					138,097
Total debt		3,651,721			48.8	%	3,330,356			47.6	%
Common equity		3,805,875			50.8	%	3,656,721			52.2	%
Noncontrolling interests		27,315			0.4	%	15,242			0.2	%
Total capitalization		$	7,484,911		100.0	%	$	7,002,319		100.0	%
GAAP Book value per share		$	26.84				$	25.87
Period end shares outstanding (in thousands)		141,791					141,353
Outstanding Long-Term Debt
	CUSIP	December 31, 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
3.250% Series due December 2025	95709TAL4	250,000					250,000
2.550% Series due June 2026	95709TAN0	350,000					—
4.125% Series due December 2042	95709TAH3	550,000					550,000
4.10% Series due March 2043	95709TAJ9	430,000					430,000
4.625% Series due August 2043	95709TAK6	250,000					250,000
4.250% Series due December 2045	95709TAM2	300,000					300,000
		2,505,000					2,155,000
Pollution control bond series:
Variable series due April 2032 (St Marys)	792609AF6	45,000					45,000
Variable series due April 2032 (Wamego)	933623BN9	30,500					30,500
		75,500					75,500
Total Westar Energy		2,580,500					2,230,500
KGE
First mortgage bond series:
6.70%Series due June 2019	U24448AB5	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		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		(10,358		)			(10,374		)
Unamortized debt issuance expense		(27,912		)			(27,616		)
Long-term debt due within one year		(125,000		)			—
Total long-term debt, net		$	3,388,670				$	3,163,950

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

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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. In addition, SPP network transmission costs fluctuate due primarily to investments by us and other members of the SPP for upgrades to the transmission grid within the SPP RTO. As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices we charge customers 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 twelve months ended 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 December 31,							Twelve Months Ended December 31,
	2016		2015		Change			2016		2015		Change
	(Dollars in Thousands)
Revenues	$	606,535	$	545,965	$	60,570		$	2,562,087	$	2,459,164	$	102,923
Less: Fuel and purchased power expense	135,135		101,561		33,574			509,496		561,065		(51,569		)
SPP network transmission costs	58,838		57,392		1,446			232,763		229,043		3,720
Gross Margin	$	412,562	$	387,012	$	25,550		$	1,819,828	$	1,669,056	$	150,772
Income from operations	$	115,881	$	108,359	$	7,522		$	681,883	$	620,997	$	60,886
Plus: Operating and maintenance expense	96,178		82,026		14,152			346,313		330,289		16,024
Depreciation and amortization expense	85,681		82,062		3,619			338,519		310,591		27,928
Selling, general and administrative expense	68,689		70,711		(2,022		)	261,451		250,278		11,173
Taxes other than income tax	46,133		43,854		2,279			191,662		156,901		34,761
Gross Margin	$	412,562	$	387,012	$	25,550		$	1,819,828	$	1,669,056	$	150,772

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2016 should be read in conjunction with this financial information.

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