Attrition Customer attrition has a direct impact on the results of our monitored services operations since it affects its revenues, amortization expense and cash flow. Attrition is defined as a ratio, the numerator of which is the gross number of lost customer accounts for a given period, net of the adjustments described below, and the denominator of which is the average number of accounts for a given period. In some instances, estimates are used to derive attrition data. Adjustments are made to lost accounts primarily for the net change, either positive or negative, in the wholesale base and for accounts that are covered under a purchase price holdback and are “put” back to the seller. The gross accounts lost during a period are reduced by the amount of the guarantee provided for in the purchase agreements with sellers. In some cases, the amount of the purchase holdback may be less than actual attrition experience. Adjustments to lost accounts for purchase holdbacks is expected to be lower in the future because Protection One is purchasing fewer accounts in the types of transactions that create holdbacks and it has extinguished a substantial portion of its purchase holdback reserve. The gross accounts lost during a period are not reduced by “move in” accounts, which are accounts where a new customer moves into the premises equipped with a Protection One security system and vacated by a prior customer, or “competitive takeover” accounts, which are accounts where the owner of a premise monitored by a competitor requests that we provide monitoring services. Actual attrition experience shows that the relationship period with any individual customer can vary significantly. Customers’ service can be discontinued for a variety of reasons, including relocation, non-payment, customers’ perception of value and competition. A portion of the acquired customer base can be expected to discontinue service every year. Any significant change in the pattern of historical attrition experience would have a material effect on our results of operations from monitored services. Attrition is monitored each quarter based on an annualized and trailing twelve-month basis. This method utilizes the average customer account base for the applicable period in measuring attrition. Therefore, in periods of customer account growth, customer attrition may be understated and in periods of customer account decline, customer attrition may be overstated. Customer attrition for the years ended December 31, 2002, 2001 and 2000 is summarized below: Our monitored services segment had a net decrease of 62,656 customers from December 31, 2001 to December 31, 2002. Attrition decreased at Protection One in 2002 compared to 2001 for a variety of reasons, including: An aggressive campaign dubbed “Save Our Subscribers,” designed to retain existing customers. An emphasis on customer service and attrition reduction by branch and monitoring center personnel. Legal action taken against competitors who illegally solicit our customers.		Related Party Transactions Below, we describe significant transactions between us and Westar Industries and some of our other subsidiaries and related parties. We have disclosed these significant transactions even if they have been eliminated in the preparation of our consolidated results and financial position.      ONEOK Shared Services Agreement We and ONEOK have shared services agreements in which we provide and bill one another for facilities, utility field work, information technology, customer support, meter reading and bill processing. Payments for these services are based on various hourly charges, negotiated fees and out-of-pocket expenses: ONEOK gave us notice of termination effective December 2003 of this shared services agreement. We expect termination of this agreement will increase our annual costs to provide these services by approximately $11 million to $13 million.      Protection One Shared Services Agreement We provide administrative services to Protection One pursuant to services agreements, including accounting, tax, audit, human resources, legal, purchasing, facilities and technology services. Fees for these services are based upon various hourly charges, negotiated fees and out-of-pocket expenses. Protection One incurred charges of $3.9 million in 2002, $8.1 million in 2001 and $7.3 million in 2000. These intercompany charges have been eliminated in consolidation. Westar Energy and Protection One have entered into an amended service agreement that stipulates that if Westar Energy sells its interest in Protection One, Westar Energy and Protection One will negotiate, in good-faith, the terms and conditions for continuation of the services during an agreed-upon transition period. This agreement is subject to KCC approval, which has not yet been received.      Transactions Between Westar Industries       and Subsidiaries      Protection One Credit Facility Westar Industries is the lender under Protection One’s senior credit facility. The senior credit facility was amended to increase the capacity from $155 million to $280 million during the year ended December 31, 2002. On August 26, 2002, the senior credit facility was further amended to extend the maturity date to January 5, 2004. On March 11, 2003, the KCC limited the amount of the credit facility to $228.4 million, authorized us to fund the facility and extend the term of the facility to January 5, 2005 and required the facility to be paid in full and terminated upon the disposition of all or part of our investment in Protection One. We are in discussions with Protection One about the extension of the facility and we intend to renew the facility through January 5, 2005, should such renewal be necessary to provide Protection One with continued liquidity. For further information, see Note 34 of the Notes to Consolidated Financial Statements, “Subsequent Events.”