WESTAR ENERGY, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Year Ended December 31,		2002				2001				2000
		(Dollars in Thousands, Except Per Share Amounts)
SALES:
Energy		$	1,422,899			$	1,307,177			$	1,359,522
Monitored Services			348,219				409,689				531,068
Total Sales			1,771,118				1,716,866				1,890,590
COST OF SALES:
Energy			378,628				394,076				380,407
Monitored Services			128,194				140,307				182,013
Total Cost of Sales			506,822				534,383				562,420
GROSS PROFIT			1,264,296				1,182,483				1,328,170
OPERATING EXPENSES:
Operating and maintenance			380,050				349,231				337,329
Depreciation and amortization			269,918				410,653				423,252
Selling, general and administrative			361,053				332,790				341,428
Loss on dispositions of monitored services operations			—				13,056				—
Merger costs			—				8,693				—
Loss on impairment of customer accounts			338,104				—				—
Loss on impairment of goodwill			139,987				—				—
Total Operating Expenses			1,489,112				1,114,423				1,102,009
INCOME (LOSS) FROM OPERATIONS			(224,816	)			68,060				226,161
OTHER INCOME (EXPENSE):
Investment earnings			77,856				53,937				193,712
Gain on extinguishment of debt			18,292				35,727				75,755
Impairment of investments			—				(11,075	)			—
Minority interests			110,234				11,621				8,625
Other			(35,930	)			(4,351	)			(9,390	)
Total Other Income (Expense)			170,452				85,859				268,702
INTEREST EXPENSE:
Interest expense on long-term debt			229,529				220,172				218,338
Interest expense on short-term debt and other			39,754				40,623				63,149
Total Interest Expense			269,283				260,795				281,487
EARNINGS (LOSS) BEFORE INCOME TAXES			(323,647	)			(106,876	)			213,376
Income tax expense (benefit)			(157,605	)			(68,344	)			72,349
NET INCOME (LOSS) FROM CONTINUING OPERATIONS       BEFORE ACCOUNTING CHANGE			(166,042	)			(38,532	)			141,027
Discontinued operations, net of tax of $823, $40 and $226, respectively			(3,242	)			(1,038	)			(736	)
Cumulative effects of accounting changes, net of tax:
Continuing operations, net of tax of $72,335, $12,347, and $1,097 respectively			(621,434	)			18,694				(3,810	)
Discontinued operations			(2,283	)			—				—
Total cumulative effects of accounting changes, net of tax			(623,717	)			18,694				(3,810	)
NET INCOME (LOSS)			(793,001	)			(20,876	)			136,481
Preferred dividends, net of gain on reacquired preferred stock			399				895				1,129
EARNINGS (LOSS) AVAILABLE FOR COMMON STOCK		$	(793,400	)		$	(21,771	)		$	135,352
Average common shares outstanding			71,731,580				70,649,969				68,962,245
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING (see Note 2):
Basic earnings (losses) available from continuing       operations before accounting changes		$	(2.32	)		$	(0.56	)		$	2.03
Discontinued operations, net of tax			(0.04	)			(0.02	)			(0.01	)
Accounting changes, net of tax			(8.70	)			0.27				(0.06	)
Basic earnings (losses) available		$	(11.06	)		$	(0.31	)		$	1.96
Diluted earnings (losses) available from continuing       operations before accounting changes		$	(2.32	)		$	(0.56	)		$	2.01
Discontinued operations, net of tax			(0.04	)			(0.02	)			(0.01	)
Accounting changes, net of tax			(8.70	)			0.27				(0.05	)
Diluted earnings (losses) available		$	(11.06	)		$	(0.31	)		$	1.95
DIVIDENDS DECLARED PER COMMON SHARE		$	1.20			$	1.20			$	1.435

The accompanying notes are an integral part of these consolidated financial statements.