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## Con Edison Communications, LLC (Con Edison 

Communications) builds and operates fiber optic networks to provide telecommunications services. The company’s proper- ties (the capitalized cost of which at December 31, 2003 amounted to $30 million, net of the impairment charge discussed above and in Note H to the financial statements) include network facilities and nearly 400 miles of fiber optic cable that has been installed in the New York City metropolitan area primarily through Con Edison of New York’s underground conduits and other rights of way. Con Edison is evaluating strategic alternatives for its telecommunications business. 

Con Edison anticipates investing $59 million in its unregulated businesses over the next two years and will focus on maximizing the value of their existing assets. See “Capital Requirements” and “Capital Resources,” below. 

## Results of Operations - Summary 

Con Edison’s earnings per share in 2003 were $2.39 ($2.38 on a diluted basis). Earnings per share in 2002 and 2001 were $3.03 ($3.02 on a diluted basis) and $3.22 ($3.21 on a diluted basis). 

Earnings per share for 2003 and 2002, before the cumulative effect of changes in accounting principles of $3 million and $(22) million after tax, respectively, were $2.37 ($2.36 on a diluted basis) and $3.14 ($3.13 on a diluted basis), respectively. 

Earnings for the years ended December 31, 2003, 2002 and 2001 were as follows: 

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(a) Represents inter-company and parent company accounting including interest expense on debt, non-operating income tax expense and goodwill amortization in 2001. See Note L to the financial statements. 

(b) Includes a charge for the impairment of unregulated telecommunications assets in accordance with SFAS No. 144 totaling $84 million after tax. See Note H to the financial statements. 

(c) Includes a charge for the impairment of two unregulated generating assets totaling $10 million after tax. In addition, a benefit for the cumulative effect of changes in accounting principles for mark-to-market gains related to power sales contracts at certain generating plants, partially offset by the impact of the financial statement consolidation of the Newington plant totaling $3 million after tax. See Note H to the financial statements. 

(d) Includes a charge for the cumulative effect of a change in accounting principle for goodwill impairment of certain unregulated generating assets totaling $20 million after tax. See Note L to the financial statements. 

(e) Includes a charge for the cumulative effect of a change in accounting principle for the rescission of Emerging Issues Task Force (EITF) Issue No. 98-10 totaling $2 million after-tax. See Note P to the financial statements. 

Con Edison’s earnings in 2003 were $118 million lower than in 2002, reflecting the following factors (after tax, in millions): 

## Con Edison of New York: 

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Con Edison’s earnings in 2002 were $36 million lower than in 2001, reflecting the following factors (after tax, in millions): 

## Con Edison of New York: 

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See “Results of Operations” below for further discussion and analysis of results of operations. 

