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Westar Energy's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: WR

During the quarter, we priced 1.1 million common shares which we intend to settle late next year. Our 2012 plans for equity haven't changed. We don't intend to increase our shares outstanding this year other than a few from our dividend reinvestment plan.

In May, we issued an additional $300 million of 30-year first mortgage bonds at a rate of just over 4%. We accomplished this through a reopen of the bonds we issued in March. Some of those proceeds were used to redeem $150 million of higher cost first mortgage bonds. All total to the second quarter we've issued $550 million of first mortgage bonds and redeemed $220 million of higher cost debt. We also recently redeemed our outstanding preferred stock. This refinancing activity should provide about $3.5 million of annual savings.

Turning to CapEx, I am pleased to report that all of our large projects remain on schedule and on or better than budget. Here's a quick summary. Air quality equipment for our unit four at Lawrence Energy Center remains on schedule for completion in the four quarter. We completed the large unit five project earlier this spring. The entire Lawrence project has come in well below original budget as we shared with you earlier.

Our major environmental projects at the Jeffrey and LaCygne energy centers remain both on schedule and on budget. While not included in Westar’s CapEx table are Prairie Wind joint-venture is coming along nicely. We’ve acquired the majority of the rights away clearing the start of the couple of months ago.

Final engineering on the line is complete and the project targeted completion late 2014 is now coming in at a much lower cost than SPP’s planning estimate about $180 million, down from the earlier $225 million. The two wind projects being developed to meet our state’s RPS are also coming along accordingly to plan. I wish we should be fully operational by the end of this month and Post Rock is targeted for completion in the fourth quarter.

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