OPERATING RESULTS Westar Energy Consolidated      2002 compared to 2001 We reported a loss of $11.06 per share in 2002 compared to a loss of $0.31 per share in 2001. This greater loss per share was due primarily to the 2002 impairment charges related to monitored services goodwill and customer accounts. A decline in monitored services revenues also contributed to the loss. Improved results from utility operations and declines in cost of sales and operating expenses and increases in other income from monitored services partially offset these items. For additional information, see the segment discussions below.      2001 compared to 2000 We reported a loss of $0.31 per share in 2001 compared to earnings of $1.96 per share in 2000. This decrease resulted from decreased electricity sales caused by milder weather, the decrease in electric rates in accordance with the July 25, 2001 KCC rate order, higher operating losses in our monitored services segment, and the fourth quarter charge related to a work force reduction. Additionally, investment earnings and extraordinary gains on the retirement of debt were lower in 2001 than in 2000. Segments of Business Our business is segmented based on differences in products and services, production processes and management responsibility. We have identified three reportable segments: Electric Utility, Monitored Services and Other. Electric Utility consists of our integrated electric utility operations, including the generation, transmission and distribution of power to our retail customers in Kansas and to wholesale customers, and our power marketing activities. Monitored Services, including the net effect of minority interests, is composed of our security alarm monitoring businesses in the United States and Europe. Other includes our approximate 45% ownership interest in ONEOK at December 31, 2002, (which was reduced to a 27.5% interest on February 5, 2003), and other investments in the aggregate not material to our business or results of operations. We manage our business segments’ performance based on their earnings (losses) before interest and taxes (EBIT) because EBIT is the primary measurement used by our management to evaluate segment performance. Our business managers have direct control over the items that affect the EBIT of their segments and we therefore believe EBIT is an appropriate measure of segment performance. EBIT does not represent cash flow from operations as defined by GAAP, should not be construed as an alternative to operating income and is indicative neither of operating		performance nor cash flows available to fund our cash needs. Items excluded from EBIT are significant components in understanding and assessing our financial performance. Interest expense, income taxes, discontinued operations, cumulative effects of accounting changes and preferred dividends are items that are excluded from the calculation of EBIT. Our computation of EBIT may not be comparable to other similarly titled measures of other companies. We provide a reconciliation of EBIT to GAAP income measurements in Note 32 of the Notes to Consolidated Financial Statements, “Segments of Business.”      Electric Utility We supply electric energy at retail to approximately 647,000 customers in Kansas including the communities of Wichita, Topeka, Lawrence, Manhattan, Salina and Hutchinson. We classify our customers as residential, commercial and industrial as defined in our tariffs. We also supply electric energy at wholesale to the electric distribution systems of 62 Kansas cities and four rural electric cooperatives. We have contracts for the sale, purchase or exchange of wholesale electricity with other utilities. In addition, we have power marketing operations that purchase and sell electricity in areas outside our historical service territory. Regulated electric utility sales are significantly impacted by such things as regulation (including rate regulation), customer conservation efforts, wholesale demand, the overall economy of our service area, the weather and competitive forces. Our wholesale sales are impacted by demand outside our service territory, the cost of fuel and purchased power, price volatility and available generation capacity. Our electric sales for the three years ended December 31 were as follows: (a)Network Integration: Reflects a new network transmission tariff that requires us to pay to the Southwest Power Pool (SPP) all expenses associated with transporting power from our generating stations. The SPP then pays us for transmitting power to the point of delivery into our retail distribution system. These receipts from the SPP are reflected in revenues under the network integration classification. For further information, see “— Other Information — Electric Utility — Network Integration Transmission Service” below. (b)Other: Includes public street and highway lighting and miscellaneous electric revenues.