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Fri, February 27, 2009 Westar Energy, Inc.: Westar Energy Announces 2008 Results
TOPEKA, KS--(Marketwire - February 27, 2009) - Westar Energy, Inc. (
The per share results for both the full year and quarter reflect an increase in the number of shares outstanding, of approximately 15 percent and 17 percent, respectively, as a result of the company having issued additional shares to fund capital investments.
2008 Full Year Results Compared with 2007 Full Year Results
Westar Energy reported 2008 revenues of $1.84 billion compared with 2007 revenues of $1.73 billion. Retail sales increased by $102 million, or 9 percent, due primarily to recovery in prices of higher fuel and purchased power costs, offset in part by a 2 percent decrease in sales volumes attributable primarily to cooler weather and refunds to retail customers. Wholesale sales increased $33 million, or 9 percent, due primarily to higher average prices, which offset a 6 percent decline in wholesale sales volumes. Energy marketing decreased $23 million, or 61 percent, due to several factors, including: the effects of extended plant outages; more transactions being completed through regional transmission organization real-time markets rather than negotiated transactions between individual parties; and the impact of customer refunds and reserves related to prior period transactions.
Operating expenses increased $165 million, due primarily to increased fuel and purchased power expense and higher depreciation expense. Fuel and purchased power expense increased $150 million due principally to the higher unit cost of fuel and purchased power. Higher fuel and purchased power expenses are largely recovered through timely adjustments to the company's prices. Depreciation expense increased $11 million due primarily to higher plant balances.
Other income for 2008 was $4 million compared with other expense of $1 million in 2007, an increase of $5 million, due primarily to higher equity AFUDC and higher income from corporate-owned life insurance.
Income tax expense decreased $60 million, due primarily to a $29 million reversal of unrecognized income tax benefits due to the completion of the federal income tax audit for 1995 through 2002, lower taxable income and the recognition of $15 million in state tax incentives related to investments and jobs creation within Kansas.
2008 Fourth Quarter Results Compared with 2007 Fourth Quarter Results
Westar Energy reported revenues of $406 million for the fourth quarter 2008, an increase of $13 million compared with revenues of $393 million in 2007. Retail revenues increased by $16 million, or 6 percent, due primarily to recovery in prices of higher fuel and purchased power costs. Wholesale sales increased $6 million, or 6 percent, due primarily to higher average prices. Energy marketing decreased $6 million due principally to less favorable market conditions and recording a reserve for a $3 million claim by an independent system operator related to prior period transactions.
Operating expenses increased $8 million, reflecting primarily higher fuel and purchased power expense and higher depreciation expense. Fuel and purchased power expense increased $9 million due primarily to the higher unit cost of fuel and recovery this year of previously deferred fuel and purchased power expense.
Other expense for 2008 was $5 million compared with other income of $1 million in 2007, a decrease of $6 million due primarily to the recording of losses on investments held in a trust for retirement benefits. The loss on investments was partially offset by an increase in equity AFUDC.
Interest expense increased $14 million due primarily to the interest on additional debt issued to fund the company's capital investments and the reversal in 2007 of $9 million in interest expense associated with unrecognized tax benefits.
Income taxes decreased $24 million due primarily to the recognition of $15 million in state tax incentives related to investments and jobs creation within Kansas and lower taxable income.
2009 Earnings Guidance
The company announced earnings guidance for 2009 of $1.65 to $1.90 per share. The 2009 earnings guidance excludes an estimated $0.30 per share benefit related to a tax settlement that will permit the company to utilize operating losses from its former non-regulated businesses. The company posted to its Web site a summary of the principal earnings drivers and adjustments used in arriving at 2009 earnings guidance. The summary is located under Investor Presentations within the Investors section of the company Web site at [ www.WestarEnergy.com ].
Conference Call and Additional Company Information
Westar Energy management will host a conference call with the investment community Friday, Feb. 27 at 10 a.m. ET (9 a.m. CT). Investors, media and the public may listen to the conference call by dialing 888-713-4215, participant code 55295568. A Web cast of the live conference call will be available at [ www.WestarEnergy.com ].
Members of media are invited to listen to the conference call and then contact Erin La Row with any follow-up questions.
This earnings announcement, a package of detailed year-end 2008 financial information, 2009 earnings guidance, the company's Annual Report on Form 10-K for the year ended Dec. 31, 2008 filed today with the Securities and Exchange Commission and other filings the company has made with the Securities and Exchange Commission are available on the company's Web site at [ www.WestarEnergy.com ]. Printed copies of the Annual Report are available free of charge upon request.
Westar Energy, Inc. (
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. Therefore, actual results could vary materially from what we expect. Please review our 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.
WESTAR ENERGY, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 Change 2008 2007 Change -------- -------- ------- ---------- ---------- -------- Sales $406,097 $392,854 $13,243 $1,838,996 $1,726,834 $112,162 -------- -------- ------- ---------- ---------- -------- Fuel and purchased power 136,405 126,979 9,426 694,348 544,421 149,927 Operating and maintenance 117,182 122,726 (5,544) 471,838 473,525 (1,687) Depreciation and amortization 53,272 51,232 2,040 203,738 192,910 10,828 Selling, general and administrative 47,712 45,800 1,912 184,427 178,587 5,840 -------- -------- ------- ---------- ---------- -------- Total Operating Expenses 354,571 346,737 7,834 1,554,351 1,389,443 164,908 -------- -------- ------- ---------- ---------- -------- Income from Operations 51,526 46,117 5,409 284,645 337,391 (52,746) Other (expense) income (4,994) 1,378 (6,372) 3,881 (1,315) 5,196 Interest expense 33,530 19,155 14,375 106,450 103,883 2,567 Income tax (benefit) expense (9,872) 14,575 (24,447) 3,936 63,839 (59,903) -------- -------- ------- ---------- ---------- -------- Net Income 22,874 13,765 9,109 178,140 168,354 9,786 Preferred dividends 242 242 - 970 970 - -------- -------- ------- ---------- ---------- -------- Earnings Available for Common Stock $ 22,632 $ 13,523 $ 9,109 $ 177,170 $ 167,384 $ 9,786 ======== ======== ======= ========== ========== ======== Basic Earnings Per Share $ 0.21 $ 0.15 $ 0.06 $ 1.70 $ 1.85 $ (0.15) ======== ======== ======= ========== ========== ======== Average equivalent common shares outstanding 108,863 92,963 103,958 90,676
