Westar Energy Announces Third Quarter Results

Thu Nov 3, 2011 5:01pm EDT

* Reuters is not responsible for the content in this press release.

  TOPEKA, KS, Nov 03 (MARKET WIRE) -- 
Westar Energy, Inc. (NYSE: WR) today announced earnings of $135 million,
or $1.15 per share, for the third quarter 2011 compared with earnings of
$115 million, or $1.02 per share, for the third quarter 2010. Earnings
for the nine months ended Sep. 30, 2011 were $210 million, or $1.82 per
share, compared with $198 million, or $1.77 per share, for the same
period in 2010. Earnings for 2011 include the benefits of reversing
previously recorded accruals as a result of legal settlements and a gain
on the sale of a non-utility investment. 

    Following is a reconciliation of GAAP to ongoing (non-GAAP) earnings per
share:

                         Three Months Ended           Nine Months Ended
                            September 30,               September 30,
                     --------------------------  -------------------------- 
                       2011     2010    Change     2011     2010    Change
                     -------- -------- --------  -------- -------- -------- 

  Basic earnings per
   share             $   1.15 $   1.02 $   0.13  $   1.82 $   1.77 $   0.05 
  Less adjustments
   for:
  Reversal of
   accruals related
   to legal
   settlements (a)       0.11       --     0.11      0.08       --     0.08 
  Gain on sale of
   non-utility
   investment            0.06       --     0.06      0.06       --     0.06 
                     -------- -------- --------  -------- -------- -------- 
  Ongoing (non-GAAP)
   earnings per
   share             $   0.98 $   1.02 $  (0.04) $   1.68 $   1.77 $  (0.09)
                     ======== ======== ========  ======== ======== ======== 
(a) Per share amounts adjusted for income tax and legal expenses related to 
 legal settlements


    
Per share results for both periods in 2011 reflect additional shares
outstanding as a result of the company having issued shares to fund
capital investments.

    The primary drivers for increased net income for the third quarter and
nine months ended Sept. 30, 2011 were the benefits of reversing
previously recorded accruals and the gain on the sale of a non-utility
investment. Ongoing earnings, which exclude the one-time benefits
previously mentioned, for third quarter 2011 were essentially unchanged
from third quarter 2010. An increase in revenues for the quarter, due
primarily to higher prices, was offset by increases in operating expenses
and losses on investments in a trust to fund retirement benefits. Ongoing
earnings for the nine months ended Sept. 30, 2011 decreased by $4 million
compared with the same period in 2010. The decrease reflects various
increases in operating expenses that more than offset higher retail
revenues due primarily to higher prices. The increase in operating
expenses include higher transmission network costs, higher expenses for
regulatory compliance at the Wolf Creek generating station, increased
maintenance for tree trimming on the electrical distribution system and
increased depreciation expense.

    Reconciliation of GAAP to ongoing (non-GAAP) net income:

                         Three Months Ended           Nine Months Ended
                            September 30,               September 30,
                     --------------------------  -------------------------- 
                       2011     2010    Change     2011     2010    Change
                     -------- -------- --------  -------- -------- -------- 
                        (Dollars in Millions)       (Dollars in Millions)

  Net Income
   attributable to
   common stock      $  134.7 $  114.5 $   20.2  $  209.9 $  198.0 $   11.9 
  Less adjustments
   for:
  Reversal of
   accruals related
   to legal
   settlements (a)       13.3       --     13.3       8.9       --      8.9 
  Gain on sale of
   non-utility
   investment             7.2       --      7.2       7.2       --      7.2 
                     -------- -------- --------  -------- -------- -------- 
  Ongoing (non-GAAP)
   net income        $  114.2 $  114.5 $   (0.3) $  193.8 $  198.0 $   (4.2)
                     ======== ======== ========  ======== ======== ======== 
(a) Adjusted for income taxes and legal expenses related to legal
 settlement


    
Earnings Guidance
 The company affirmed ongoing earnings guidance for
2011 of $1.75 to $1.90 per share. The company has posted to its website a
summary of factors it considers to be principal drivers and adjustments
used in arriving at earnings guidance. The summary is located under
Supplemental Materials within the Investors section of the company
website at www.WestarEnergy.com.

    Conference Call and Additional Company Information
 Westar Energy
management will host a conference call Friday, Nov. 4 with the investment
community at 10:00 a.m. ET (9:00 a.m. CT). Investors, media and the
public may listen to the conference call by dialing 866-356-3093,
participant code 64274311. A webcast of the live conference call will be
available at www.WestarEnergy.com.

    Members of the media are invited to listen to the conference call and
then contact Gina Penzig with any follow-up questions.

    This earnings announcement, a package of detailed third quarter 2011
financial information, the company's quarterly report on Form 10-Q for
the period ended Sept. 30, 2011 and other filings the company has made
with the Securities and Exchange Commission are available on the
company's website at www.WestarEnergy.com.

    Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas,
providing electric service to about 687,000 customers in the state.
Westar Energy has about 7,100 megawatts of electric generating resources
and operates and coordinates more than 34,000 miles of electric
distribution and transmission lines.

    For more information about Westar Energy, visit us on the Internet at
http://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. The factors that could cause
actual results to differ materially from these forward-looking statements
include those discussed herein as well as (1) those discussed in the
company's Annual Report on Form 10-K for the year ended Dec. 31, 2010 (a)
under the heading, "Forward-Looking Statements," (b) in ITEM 1. Business,
(c) in ITEM 1A. Risk Factors, (d) in ITEM 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations, and (e) in
ITEM 8. Financial Statements and Supplementary Data: Notes 13 and 15; (2)
those discussed in the company's Quarterly Report on Form 10-Q filed Nov.
3, 2011 (a) in ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations and (b) in Part 1, Financial
Information, ITEM 1. Financial Statements: Notes 8 and 9; and (3) other
factors discussed in the company's filings with the Securities and
Exchange Commission. 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.

                            WESTAR ENERGY, INC.
                     CONSOLIDATED STATEMENTS OF INCOME
                                (UNAUDITED)
                  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                    Three Months Ended             Nine Months Ended
                      September 30,                  September 30,
                 2011     2010     Change      2011       2010      Change
               -------- --------  --------  ---------- ----------  -------- 

Retail         $529,582 $502,325  $ 27,257  $1,286,978 $1,206,261  $ 80,717 
Wholesale       101,086   94,117     6,969     257,195    255,865     1,330 
Transmission     39,075   35,554     3,521     115,411    108,497     6,914 
Other             8,409   12,441    (4,032)     25,179     28,825    (3,646)
               -------- --------  --------  ---------- ----------  -------- 
  Total
   Revenues     678,152 $644,437    33,715   1,684,763  1,599,448    85,315 

Fuel and
 purchased
 power          199,540  187,877    11,663     486,697    458,793    27,904 
Operating and
 maintenance    137,823  126,602    11,221     412,429    369,584    42,845 
Depreciation
 and
 amortization    72,202   67,918     4,284     213,551    201,955    11,596 
Selling,
 general and
 administrative  27,499   50,418   (22,919)    132,233    144,499   (12,266)
               -------- --------  --------  ---------- ----------  -------- 
  Total
   Operating
   Expenses     437,064  432,815     4,249   1,244,910  1,174,831    70,079 
               -------- --------  --------  ---------- ----------  -------- 

  Income from
   Operations   241,088  211,622    29,466     439,853    424,617    15,236 

Other income
 (expense)          848       (1)      849         514     (3,901)    4,415 
Interest
 expense         43,844   43,956      (112)    130,681    131,862    (1,181)
Income tax
 expense         61,700   51,802     9,898      94,812     86,780     8,032 
               -------- --------  --------  ---------- ----------  -------- 

 Net Income     136,392  115,863    20,529     214,874    202,074    12,800 
Less: Net
 income
 attributable
 to
 noncontrolling
 interests        1,442    1,119       323       4,212      3,338       874 
               -------- --------  --------  ---------- ----------  -------- 
Net income
 attributable
 to Westar
 Energy         134,950  114,744    20,206     210,662    198,736    11,926 
Preferred
 dividends          242      242        --         727        727        -- 
               -------- --------  --------  ---------- ----------  -------- 

  Net Income
   Attributable
   to Common
   Stock       $134,708 $114,502  $ 20,206  $  209,935 $  198,009  $ 11,926 
               ======== ========  ========  ========== ==========  ======== 

Earnings per
 common share,
 basic         $   1.15 $   1.02  $   0.13  $     1.82 $     1.77  $   0.05 
               ======== ========  ========  ========== ==========  ======== 

Average
 equivalent
 common shares
 outstanding    116,807  111,707     5,100     115,209    111,387     3,822 

Dividend
 declared per
 share         $   0.32 $   0.31  $   0.01  $     0.96 $     0.93  $   0.03 


    


Media contact:
Gina Penzig
director, corporate 
communications
Phone: 785.575.8089
gina.penzig@WestarEnergy.com

Investor contact:
Bruce Burns
director, investor relations
Phone: 785.575.8227
bruce.burns@WestarEnergy.com 

Copyright 2011, Market Wire, All rights reserved.

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