Westar Energy announces 2016 results.
"As we work to combine with KCP&L, we've managed expenses by keeping numerous positions vacant as people have retired while still delivering safe, reliable energy for our customers. We've also slowed other projects as we evaluate those plans in a combined electric company," said Mark Ruelle, president and chief executive officer. "The merger is integral to maintaining these savings."
Net income for 2016, compared with the prior year, was driven by recent price adjustments, an increase in corporate-owned life insurance income, and decreased costs from power plant retirements in late 2015. The higher revenue was partially offset by higher depreciation due to air quality control additions at La Cygne, higher costs at coal-fired plants from scheduled outages, and merger-related expenses.
Net income for the fourth quarter 2016, compared with 2015, increased primarily from favorable weather over prior year, recent price adjustments, and an increase in corporate-owned life insurance income. The higher revenue was partially offset by higher expenses due to improving long-term grid reliability.
The Board of Directors today declared a quarterly dividend of 40 cents per share payable April 3, 2017, on the company's common stock payable to shareholders of record as of March 9, 2017. The new dividend reflects a 5 percent increase over the company's previous quarterly dividend of 38 cents per share, and results in an indicated annual dividend of $1.60 per share.
Due to the pending transaction with Great Plains Energy, Westar Energy will no longer host a quarterly webcast and conference call. Investors may continue to contact our Investor Relations Department at (785) 575-8227.
This earnings announcement, a package of detailed fourth quarter and year-end 2016 financial information, the company's annual report on Form 10-K for the period ended Dec. 31, 2016 and other filings the company made with the Securities and Exchange Commission are available on the company's website at www.WestarEnergy.com.
- 30 -
Westar Energy, Inc. (NYSE: WR) is Kansas' largest electric utility. For more than a century, we have provided Kansans the safe, reliable electricity needed to power their businesses and homes. Every day our team of professionals takes on projects to generate and deliver electricity, protect the environment and provide excellent service to our nearly 700,000 customers. Westar has 7,800 MW of electric generation capacity fueled by coal, uranium, natural gas, wind and landfill gas. We are also a leader in electric transmission in Kansas. Our innovative customer service programs include mobile-enabled customer care, smart meter deployment and paving the way for electric vehicle adoption. Our employees live, volunteer and work in the communities we serve.
For more information about Westar Energy, visit us on the Internet at http://www.WestarEnergy.com. Westar Energy is on Facebook: www.Facebook.com/westarenergy and Twitter: www.Twitter.com/WestarEnergy.
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, 2016 (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 14 and 16; and (2) 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.
Media Relations Manager
Media line: 888-613-0003
Director, Investor Relations
Westar Energy, Inc.
Consolidated Statements of Income
|Three Months Ended Dec. 31,||Twelve Months Ended Dec. 31,|
|2016||2015||Change||% Change||2016||2015||Change||% Change|
|(In Thousands, Except Per Share Amounts)|
|Total Retail Revenues||449,981||403,580||46,401||11.5||1,978,349||1,864,550||113,799||6.1|
|Fuel and purchased power||135,135||101,561||33,574||33.1||509,496||561,065||(51,569||)||(9.2)|
|SPP network transmission costs||58,838||57,392||1,446||2.5||232,763||229,043||3,720||1.6|
|Operating and maintenance||96,178||82,026||14,152||17.3||346,313||330,289||16,024||4.9|
|Depreciation and amortization||85,681||82,062||3,619||4.4||338,519||310,591||27,928||9.0|
|Selling, general and administrative||68,689||70,711||(2,022||)||(2.9)||261,451||250,278||11,173||4.5|
|Taxes other than income tax||46,133||43,854||2,279||5.2||191,662||156,901||34,761||22.2|
|Total Operating Expenses||490,654||437,606||53,048||12.1||1,880,204||1,838,167||42,037||2.3|
|INCOME FROM OPERATIONS||115,881||108,359||7,522||6.9||681,883||620,997||60,886||9.8|
|OTHER INCOME (EXPENSE):|
|Total Other Income (Expense)||6,794||339||6,455||nm||25,583||9,601||15,982||166.5|
|INCOME BEFORE INCOME TAXES||81,960||66,016||15,944||24.2||545,740||453,796||91,944||20.3|
|Income tax expense||24,165||24,190||(25||)||(0.1)||184,540||152,000||32,540||21.4|
|Less: Net income attributable to noncontrolling interests||3,863||2,591||1,272||49.1||14,623||9,867||4,756||48.2|
|NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.||53,932||39,235||14,697||37.5||346,577||291,929||54,648||18.7|
|Earnings per common share, basic||$||0.38||$||0.28||$||0.10||35.7||$||2.43||$||2.11||$||0.32||15.2|
|Average equivalent common shares outstanding||142,152||141,713||439||0.3||142,068||137,958||4,110||3.0|
|DIVIDENDS DECLARED PER COMMON SHARE||$||0.38||$||0.36||$||0.02||5.6||$||1.52||$||1.44||$||0.08||5.6|
|Effective income tax rate||29.5||%||36.6||%||33.8||%||33.5||%|