Exhibit 99.2
Westar Energy, Inc.
2009 Revised Earnings Guidance – September 2009
Westar Energy 2009 earnings per share range (excluding discontinued operations)$1.35 - $1.45
Key assumptions and estimates for 2009:
| | • | | Implemented $130 million annualized retail base rate increase effective February 2009 |
| | • | | Adjusted TDC by $32 million annualized increase effective mid March |
| | • | | Adjusted Environmental Cost Recovery Rider by $32 million annualized increase effective June 1 |
| | • | | Estimate 3-4% decline in retail electric sales volumes from 2008 weather-adjusted levels, reflecting normal weather for remainder of year, impact of soft economy on industrial sales, etc. |
| | • | | Estimate growth in tariff-based sales volumes of 7-10% over 2008 levels, due primarily to shorter outages on units tied to participation sales contracts and entering into a new customer agreement. |
| | • | | Market-based sales volumes decrease of 25-35% from 2008 levels, with direct revenue offset effective March |
| | • | | Energy Marketing gross margins reduced to an estimated range of $7 - $10 million |
| | • | | O&M / SG&A expense increase by 2-3%, excluding: ~$5 million increase for wind O&M expense; ~$5 million increase to ice storm amortization; ~$27 million increase SPP transmission expense (largely offset with increase in transmission revenues); and benefit of pension tracker to avoid an increase in pension/OPEB expense |
| | • | | Depreciation and amortization expense increase of $42-$48 million: depending on timing and amount of planned 2009 capital projects and full year effects of 2008 additions to plant-in-service |
| | • | | $11 million of actuarial-assumed COLI proceeds, although year-to-date none received |
| | • | | Decrease in equity AFUDC of $10-$15 million, due principally to lower CapEx compared to 2008 |
| | • | | Increase in interest expense of $53-$60 million reflecting: full-year effect of 2008 debt issuances; reversal in 2008 of $17.8 million of interest expense related to the tax audits; decrease in borrowed AFUDC; and assumptions about total debt levels and interest rates |
| | • | | Effective tax rate of approximately 28-30%, excluding effects of 2009 tax settlement |
| | • | | Excludes gain from discontinued operations of $33 million related to a tax settlement permitting the company to utilize operating losses from its former non-regulated businesses |
The effects of the key assumptions are not necessarily independent of one another, and the combination of effects can cause individual impacts smaller or larger than the ranges indicated.
Forward-looking statements: Certain matters discussed in this document 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 the Quarterly Report on Form 10-Q for the period ended June 30, 2009 and the Annual Report on Form 10-K for the year ended Dec. 31, 2008 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.
Sept. 23, 2009
