Exhibit 99.1
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 | | Media contact: Karla Olsen, senior manager, media relations Phone: 888.613.0003 FAX: 316.261.6769 karla_olsen@westarenergy.com Investor contact: Bruce Burns, director, investor relations Phone: 785.575.8227 bruce_burns@westarenergy.com |
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WESTAR ENERGY ANNOUNCES FIRST QUARTER 2006 RESULTS
TOPEKA, Kan., May 9, 2006 — Westar Energy, Inc. (NYSE:WR) today announced earnings of $26.6 million, or $0.30 per share, for the first quarter 2006 compared with earnings of $15.4 million, or $0.18 per share, for the first quarter 2005. The increase in earnings for the quarter was the result primarily of $9.6 million of income from corporate-owned life insurance.
Westar Energy reported revenues of $340.0 million for the first quarter 2006 compared with $336.5 million for the same period in 2005. Retail sales for the first quarter 2006 increased 2.3% or $5.5 million compared with the same period of 2005. Wholesale sales decreased $16.1 million for the first quarter of 2006 compared with the same period in 2005 due primarily to reduced market-based wholesale sales resulting from the company’s coal conservation measures. Energy marketing increased $12.3 million for the first quarter 2006 compared with the same period of 2005 due primarily to favorable mark-to-market valuations.
Total operating expenses for the first quarter of 2006 increased $6.8 million compared with the same period in 2005. The increase reflects primarily increases of $5.3 million in depreciation expense and $1.9 million for amortization of deferred storm expenses. Recovery of both of these higher expense items was authorized as part of the 2005 rate order of the Kansas Corporation Commission.
Westar Energy announces first quarter 2006 results, page 2 of 3
Other income and expense for the first quarter 2006 was $7.3 million of income compared with an expense of $1.9 million for the same period in 2005. The change between periods reflects $9.6 million, or $0.11 per share, of income from corporate-owned life insurance in 2006. The income from corporate-owned life insurance represents the amount of proceeds that actuarial assumptions predicted for the full year of 2006. Interest expense for the first quarter 2006 was $23.4 million compared with $29.9 million for the same period in 2005, reflecting the results of debt redemptions and lower interest rates due to refinancing activities.
2006 Earnings Guidance
Based on first quarter results, Westar Energy affirmed its previously announced 2006 full-year earnings guidance of $1.55 to $1.65 per share and the 2007 earnings guidance of $1.65 to $1.75 per share. Westar Energy’s earnings release, together with its attachments, dated Feb. 23, 2006 provides a discussion of the company’s earnings guidance and the earnings drivers and adjustment used in arriving at 2006 full-year earnings guidance.
Additional Earnings Information and Conference Call
In conjunction with the earnings release, Westar Energy has posted on its Web site a package of more detailed financial information related to its first quarter performance. The materials are available under Presentations in the Investor Relations section of the company Web site.
Westar Energy’s conference call with the investment community will be at 8 a.m. Eastern Daylight Time on May 9. Jim Haines, chief executive officer, and Mark Ruelle, executive vice president and chief financial officer, will host the call. Investors, media and the public may listen to the conference call by dialing 866-203-2528, participant code 32473723. Listeners may access
Westar Energy announces first quarter 2006 results, page 3 of 3
a live webcast of the conference call via the company’s Web site, www.WestarEnergy.com. A replay of the call will be available on the Web site. Members of the news media may direct follow-up questions to Karla Olsen.
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Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas, providing electric service to about 660,000 customers in the state. Westar Energy has nearly 6,000 megawatts of electric generation capacity and operates and coordinates approximately 33,000 miles of electric distribution and transmission lines.
For more information about Westar Energy, visit us on the Internet athttp://www.WestarEnergy.com.
Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable assumptions, all forward-looking statements involve risk and uncertainty. Therefore, actual results could vary materially from what we expect. Please review our Quarterly Report on Form 10-Q for the period ended March 31, 2006 for important risk factors that could cause results to differ materially from those in any such forward-looking statements. Any forward-looking statement speaks only as of the date such statement was made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made except as required by applicable laws or regulations.
Attachment 1
WESTAR ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2006 | | 2005 | | | Change | |
Sales | | $ | 340,023 | | $ | 336,502 | | | $ | 3,521 | |
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Fuel and purchased power | | | 92,000 | | | 91,797 | | | | 203 | |
Depreciation and amortization | | | 47,572 | | | 42,305 | | | | 5,267 | |
Other operating expenses | | | 148,768 | | | 147,472 | | | | 1,296 | |
| | | | | | | | | | | |
Total Operating Expenses | | | 288,340 | | | 281,574 | | | | 6,766 | |
| | | | | | | | | | | |
Income from Operations | | | 51,683 | | | 54,928 | | | | (3,245 | ) |
Other income (expense) | | | 7,302 | | | (1,907 | ) | | | 9,209 | |
Interest expense | | | 23,398 | | | 29,864 | | | | (6,466 | ) |
Income tax expense | | | 8,749 | | | 7,542 | | | | 1,207 | |
| | | | | | | | | | | |
Net income | | | 26,838 | | | 15,615 | | | | 11,223 | |
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Preferred dividends | | | 242 | | | 242 | | | | — | |
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Earnings Available for Common Stock | | $ | 26,596 | | $ | 15,373 | | | $ | 11,223 | |
| | | | | | | | | | | |
Average equivalent common shares outstanding | | | 87,279 | | | 86,569 | | | | | |
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Basic Earnings Per Share | | $ | 0.30 | | $ | 0.18 | | | $ | 0.12 | |
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