> Westar Energy announces 2007 results

Westar Energy, Inc. (NYSE:WR) today announced 2007 earnings of $167.4 million, or $1.85 per share, compared with 2006 earnings of $164.3 million, or $1.88 per share. The lower earnings per share reflects additional shares issued in 2007 to fund the company’s growth plan. The company reported fourth quarter 2007 earnings of $13.5 million, or $0.15 per share, compared with fourth quarter 2006 earnings of $12.8 million, or $0.15 per share.

2007 Full Year Results Compared with 2006 Full Year Results
Westar Energy reported 2007 revenues of $1.7 billion, $121.1 million higher than 2006 revenues of $1.6 billion. Retail sales increased by $26.7 million, or 2.3 percent, due primarily to higher residential and commercial sales and a decrease in refund obligations. Wholesale sales increased $79.2 million, or 26.3 percent, due primarily to increased sales volumes because the company’s generating facilities were operated in 2007 without restriction for coal conservation measures as was the case in 2006, and the company’s nuclear plant operated without any planned or unplanned outages in 2007. Additionally, the company had higher sales from a long-term wholesale sale agreement entered into in April 2007.
Operating expenses increased $90.5 million, due primarily to increased fuel and purchased power expense and higher depreciation expense. Fuel and purchased power expense increased $60.5 million due principally to increased sales and higher unit cost of fuel and purchased power. The higher fuel and purchased power expense is largely recovered through a fuel adjustment clause, which allows the timely recovery of these costs.  Depreciation expense increased $12.7 million due primarily to higher plant balances.

Other expense for 2007 was $1.3 million compared with other income of $13.5 million in 2006, a decrease of $14.8 million, due primarily to lower income from corporate-owned life insurance.

2007 Fourth Quarter Results Compared with 2006 Fourth Quarter Results

Westar Energy reported revenues of $392.9 million for the fourth quarter 2007, an increase of $49.7 million compared with $343.2 million in 2006. Retail revenues increased by $25.7 million, or 11.5 percent, principally due to smaller refund obligations in 2007 compared with the same period last year. Wholesale sales increased $19.0 million, or 22.9 percent, due primarily to increased sales volumes due to higher availability of the company’s baseload generating facilities and a long-term wholesale sale agreement entered into in April 2007.
Operating expenses increased $50.1 million, reflecting primarily higher fuel and purchased power expense and higher depreciation expense. Fuel and purchased power expense increased $33.8 million, due primarily to increased sales and higher per unit cost of fuel. The $19.2 million increase in depreciation expense is due primarily to an $18.8 million reduction in the fourth quarter 2006 depreciation expense that resulted from the KCC reversing a portion its December 2005 rate order with regard to allowable depreciation expense.
Interest expense decreased by $5.3 million due primarily to the reversal of $9.3 million of tax-related interest expense due to a federal income tax settlement. The decrease was partially offset by higher interest expense associated with a capital lease related to the eight percent leasehold interest in Jeffrey Energy Center that the company acquired in April 2007 and increased long-term debt outstanding.  Effective January 1, 2007, the company began recording interest related to income tax uncertainties as interest expense instead of as income tax expense.

2008 Earnings Guidance

The company announced earnings guidance for 2008 of $1.50 to $1.65 per share, excluding the possible affects of settlements of open prior period income tax audits. The company posted to its Web site a summary of the principal earnings drivers and adjustments used in arriving at 2008 earnings guidance. The summary can be 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. 29 at 10 a.m. ET (9 a. m. CT). Investors, media and the public may listen to the conference call by dialing 888-680-0860, participant code 11864786. 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 Karla Olsen with any follow-up questions.

This earnings announcement, a package of detailed year-end 2007 financial information, 2008 earnings guidance, the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2007 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.