Westar Energy (NYSE:WR) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
SG&A and O&M
Michael Lapides – Goldman Sachs: Congrats on a great quarter, and maybe more importantly congrats on the Twinkie factory. I think that’s great. I look forward to visiting. A couple of just minor questions. First of all, SG&A and O&M, strong cost control in the quarter, just curious, anything we should be thinking about directionally during the quarters of 2013 in terms of just trends? Meaning, was the year-over-year change in SG&A or O&M something that may have been unusual in year-over-year changes for the rest of the quarters and 2013 could be different from what we saw on the first quarter?
Tony Somma – SVP, CFO, Treasurer: This is Tony. Not all of our costs are level and so there is some lumpiness. We will standby with what we issued on our earnings driver. Overall, O&M and SG&A will go up about 5%, but our O&M and SG&A that’s not covered by trackers or riders, will go down 1%. So it’s a little front-loaded this quarter, and you should expect that to smooth out as the year progresses.
Michael Lapides – Goldman Sachs: Second, the storm deferral, the $10 million in terms of the revenue reduction, does that drop to the bottom line or is there an offsetting costs, whether in fuel, purchased power or somewhere else?
Tony Somma – SVP, CFO, Treasurer: No, it was actually negotiated as part of our GRC settlement last year. This is the ice storm from few years ago, and basically it’s fully recovered. So, it’s part of our settlement. Last year, we said when we filed the abbreviated case, we would zero that out. So the expense goes away, so does the revenue unfortunately…
Michael Lapides – Goldman Sachs: In what line item? Where does the expense show up?
Tony Somma – SVP, CFO, Treasurer: I am going to let….
Mark A. Ruelle – President and CEO: O&M accounts for that one. It goes with O&M.
Michael Lapides – Goldman Sachs: Finally, just given through the Q, there is some commentary in terms of capital formation regarding forward sale up to about $500 million, just want to confirm that amount, the timeframe for when you’re thinking about making that drawdown, and whether pricing, whether you can guarantee the price with that $500 million of equity, whether that’s still kind of market exposed, et cetera?
Mark A. Ruelle – President and CEO: Michael, that was an agreement that we refreshed, when we refreshed our S-3, and it doesn’t mean we will issue $500 million of equity through what we are going to call the ATM program. We were just refreshing the program and we can dribble out up to that amount, but chances are we will not dribble up to that amount. We don’t need $500 million of equity. And we probably want to come with the follow-on offering here sometime.
Tony Somma – SVP, CFO, Treasurer: But in terms of how we raise money you should look for us to continue the tactics and the strategy that worked very well for this company in the past, which is some forward, some marketed, some aftermarket, and just kind of dollar cost averaging…
Michael Lapides – Goldman Sachs: And just goal is strictly trying to stays close to 50-50 as you can over time?
Tony Somma – SVP, CFO, Treasurer: Yeah, with the understanding that we have to be conscious of the costs of our capital and make sure that’s reflected in the prices that our customer pay for our product. So, you’ll see that bounce around a little bit in and around the ratemaking schedule, in and around the equity issuance schedule.
Moses – UBS: (Moses) for Julien. Just had a quick question on CapEx and how you see kind of CapEx prospectively given the new (coal ash) updates from EPA?
Greg A. Greenwood – SVP, Strategy: This is Greg Greenwood. I’ll take a shot at that. We had the Fluent guidance that came out recently. They would indicate that EPA is headed toward categorizing solid waste as nonhazardous, which will make it much more economical for us and other utilities to handle. So, I think that’s a good sign. I think our capital plans as we lay them out there are sufficient to pay for the projects to taking those matters.
Moses – UBS: Switching to industrial sales, do you have any insights to kind of what growth would have look liked without those two customers this quarter?
Mark A. Ruelle – President and CEO: We’re probably around flat without those two customers.