MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK)—CONTINUED term borrowings using funds from long-term financings and operating activities.
The Utilities' cost of capital, including working capital, is reflected in the rates they charge to their customers.
Each of the Companies believes that it will be able to meet its reasonably likely short-term and long-term cash requirements.
See “Risk Factors,” and “Application of Critical Accounting Policies—Accounting for Contingencies,” above, and “Regulatory Matters,” below.
Changes in the Companies’ cash and temporary cash investments resulting from operating, investing and financing activities for the years ended December 31, 2007, 2006 and 2005 are summarized as follows: Con Edison
## Table 0 ##
Con Edison of New York
## Table 1 ##
Cash Flows from Operating Activities The Utilities’ cash flows from operating activities reflect principally their energy sales and deliveries and cost of operations.
The volume of energy sales and deliveries is dependent primarily on factors external to the Utilities, such as growth of customer demand, weather, market prices for energy, economic conditions and measures that promote energy efficiency.
The prices at which the Utilities provide energy to their customers are determined in accordance with their rate agreements.
In general, changes in the Utilities’ cost of purchased power, fuel and gas may affect the timing of cash flows but not net income because the costs are recovered in accordance with rate agreements.
See “Recoverable Energy Costs” in Note A to the financial statements.
Net income is the result of cash and non-cash (or accrual) transactions.
Only cash transactions affect the Companies’ cash flows from operating activities.
Principal non-cash charges include depreciation and deferred income tax expense.
Principal non-cash credits include the revenue requirement impact resulting from the reconciliation pursuant to Con Edison of New York’s electric rate agreement of the differences between the actual amount of transmission and distribution utility plant, net of depreciation to the amounts reflected in electric rates (Net T&D Revenues), prepaid pension costs and amortizations of certain net regulatory liabilities.
See “Application of Critical Accounting Policies—Accounting for Pensions and Other Postretirement Benefits,” and Notes E and F to the financial statements.
Net cash flows from operating activities in 2007 for Con Edison and Con Edison of New York were $201 million and $88 million higher, respectively, than in the 2006 period primarily reflecting increased net income, depreciation expense, deferred income taxes and recovery of certain other receivables, described below, offset in part by higher non-cash credits for Net T&D Revenues, rate case amortizations and accruals and higher customer accounts receivable.
The change in net cash flows also reflects the timing of payments for and recovery of energy costs.
This timing issue is reflected within changes to accounts receivable—customers, recoverable energy costs and accounts payable balances.
The change in other deferred charges and noncurrent assets reflects a $160 million deposit paid by Con Edison to the Internal Revenue Service with respect to the timing of deductions of certain construction related costs.
See Note L to the financial statements.
Con Edison of New York’s portion of this deposit, also recorded as a noncurrent asset, was $147 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK)—CONTINUED Taxes Other Than Income Taxes Taxes, other than income taxes, were the same in 2006 compared with 2005.
The principal components of taxes, other than income taxes, were:
## Table 2 ##
(a) Including sales tax on customers’ bills, total taxes other than income taxes, billed to customers in 2006 and 2005 were $73 million and $68 million, respectively.
Income Taxes Operating income taxes decreased by $6 million in 2006 compared with 2005 due principally to lower income in the 2006 period.
Other Income (Deductions) Other income (deductions) increased $3 million in 2006 compared with 2005 due primarily to the sale of non-utility property and increased interest income.
Net Interest Expense Net interest expense increased $4 million in 2006 compared with 2005 due principally to higher interest rates on and principal amounts of commercial paper and new debt issuances in the 2006 period.
Competitive Energy Businesses The competitive energy businesses’ operating income and earnings from continuing operations increased $28 million and $27 million, respectively, in 2006 compared with 2005 due primarily to higher operating revenues and gross margins on wholesale and retail electric sales, offset in part by higher mark-to-market losses.
Operating revenues increased $629 million in 2006 compared with 2005, primarily due to higher electric wholesale and retail revenues offset in part by decreased generation and other revenues and increased net mark-to-market losses.
Electric wholesale revenues increased $602 million, of which $564 million was due to higher sales volume and $38 million was due to an increase in unit prices.
Electric retail revenues increased $124 million in 2006 as compared with 2005, of which $71 million was due to higher sales volumes and $53 million was due to an increase in unit prices.
While electric retail revenues increased more than 12 percent from 2005 to 2006, gross margins increased at a greater rate as more customers shifted from indexed contracts to fixed-price contracts as energy prices declined during the year.
Renewal rates for customers have remained above 90 percent for the past two years.
Revenue from the sale of electricity from the competitive energy businesses’ generation facilities was $49 million lower, reflecting lower unit prices and volumes, partially offset by reliability-related capacity payments for two of its Massachusetts generating facilities.
The development of capacity markets in New England and PJM is expected to result in more predictable capacity revenues.
Net mark-to-market losses increased $12 million in 2006 as compared with 2005 due primarily to lower prices on natural gas contracts, which were economic hedges that supported retail obligations (but did not qualify for cash flow hedge accounting).
Other revenue, primarily wholesale revenue and intercompany revenue, decreased $36 million.
Operating expenses excluding income taxes increased $583 million in 2006 compared with 2005, reflecting increased purchased power ($624 million) and other operations and maintenance costs ($19 million), offset in part by lower fuel costs ($42 million), gas purchased for resale costs ($17 million) and taxes other than income taxes ($1 million).
Income taxes increased $19 million in 2006 as compared with 2005, reflecting primarily higher income.
Other income (deductions) decreased $1 million in 2006 compared with 2005 due primarily to an impairment of $6 million on an equity investment (see “Impairments” in Note A to the financial statements), offset in part by higher interest income.
Discontinued Operations Losses from discontinued operations were $23 million lower in 2006 as compared with 2005 due primarily to losses from Con Edison Communications in 2005 ($13 million) and higher margins from certain Con Edison Development generation projects in 2006 ($10 million).
See Notes T and U to the financial statements.
Other For Con Edison, “Other” in 2006 reflects a $9 million expense (which will not be recoverable under the Utilities’ rate plans) for a charitable commitment to the World Trade Center Memorial Foundation and a $9 million expense to effectively reclassify from retained earnings to additional paid-in capital the tax benefits from the exercise of stock options that had been recognized in income in prior years.
For Con Edison, “Other” also includes inter-company eliminations relating to operating revenues and operating expenses.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK) This combined management’s discussion and analysis of financial condition and results of operations (MD&A) relates to the consolidated financial statements included in this report of two separate registrants: Consolidated Edison, Inc.  (Con Edison) and Consolidated Edison Company of New York, Inc.  (Con Edison of New York) and should be read in conjunction with the financial statements and the notes thereto.
As used in this report, the term the “Companies” refers to Con Edison and Con Edison of New York.
Con Edison of New York is a subsidiary of Con Edison and, as such, information in this MD&A about Con Edison of New York applies to Con Edison.
Information in the notes to the consolidated financial statements referred to in this discussion and analysis is incorporated by reference herein.
The use of terms such as “see” or “refer to” shall be deemed to incorporate by reference into this discussion and analysis the information to which reference is made.
Corporate Overview Con Edison’s principal business operations are those of its utility companies, Con Edison of New York and Orange and Rockland Utilities, Inc.  (O&R), together known as the “Utilities.
” Con Edison also has competitive energy businesses (see “Competitive Energy Businesses,” below).
Certain financial data of Con Edison’s businesses is presented below:
## Table 3 ##
(a) Income from continuing operations of the competitive energy businesses for the twelve months ended December 31, 2008 includes $(59) million of net after-tax mark-to-market gains/(losses) (Con Edison Development, $17 million, Con Edison Energy, $(26) million and Con Edison Solutions, $(50) million).
Con Edison Development’s income from continuing operations for the twelve months ended December 31, 2008 also includes $131 million of after-tax gain from the sale of generation projects.
See Note V to the financial statements.
(b) Represents inter-company and parent company accounting.
See “Results of Operations,” below.
The twelve months ended December 31, 2008 includes $30 million of after-tax net income related to the resolution of the Company’s legal proceeding with Northeast Utilities.
(c) Represents the discontinued operations of Con Edison Development’s generation projects, which includes a $270 million after-tax gain on the sale of generation projects for the twelve months ended December 31, 2008.
See Note V to the financial statements.
Con Edison’s net income for common stock in 2008 was $1,196 million or $4.38 a share.
Net income for common stock in 2007 and 2006 was $929 million or $3.49 a share and $737 million or $2.96 a share, respectively.
See “Results of Operations – Summary,” below.
Con Edison’s principal business segments are Con Edison of New York’s regulated electric, gas and steam utility activities, O&R’s regulated electric and gas utility activities and Con Edison’s competitive energy businesses.
Con Edison of New York’s principal business segments are its regulated electric, gas and steam utility activities.
For segment financial information, see Note N to the financial statements and “Results of Operations,” below.
For information about factors that could have a material adverse effect on the Companies, see “Risk Factors,” below.
Regulated Utilities Con Edison of New York provides electric service to approximately 3.3 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County.
The company also provides steam service in parts of Manhattan.
O&R, along with its regulated utility businesses, provides electric service to approximately 0.3 million customers in southeastern New York and adjacent areas of northern New Jersey and eastern Pennsylvania and gas service to over 0.1 million customers in southeastern New York and adjacent areas of eastern Pennsylvania.
The Utilities are primarily “wires and pipes” energy delivery businesses that deliver energy in their service areas subject to extensive federal and state regulation.
The Utilities’ customers buy this energy from the Utilities, or from other suppliers through the Utilities’ retail access programs.
The Utilities purchase substantially all of the energy they sell to customers pursuant to firm contracts or through wholesale energy markets, and recover (generally on a current basis) the cost of the energy sold, pursuant to approved rate plans.
Con Edison anticipates that the Utilities will continue to provide substantially all of its earnings over the next few years.
The Utilities’ earnings will depend on various factors including demand for utility service and the Utilities’ ability to charge rates for their services that reflect the costs of service, including a return on invested equity capital.
MARATHON OIL CORPORATION Notes to Consolidated Financial Statements Company, L. L. C.  and Odyssey Pipeline L. L. C. , as well as certain other oil pipeline interests, including the Eugene Island pipeline system.
The value of this transaction is approximately $205 million, net of debt assumed by the buyer.
The carrying value of these assets was $38 million as of December 31, 2011.
This transaction closed on January 3, 2012.2011 Burns Point gas plant – During the fourth quarter of 2011, we sold our E&P segment’s 50 percent interest in the Burns Point gas plant, a cryogenic processing plant located in St.  Mary Parish, Louisiana, for total consideration of $36 million and a pretax gain of $34 million was booked.
Alaska LNG facility – During the third quarter of 2011, we sold our Integrated Gas segment’s equity interest in a LNG processing facility in Alaska and a pretax gain on the transaction of $8 million was recorded.
DJ Basin – In April 2011, we assigned a 30 percent undivided working interest in our E&P segment’s approximately 180,000 acres in the Niobrara shale play located within the DJ Basin of southeast Wyoming and northern Colorado for total consideration of $270 million, recording a pretax gain of $37 million.
We remain operator of this jointly owned leasehold.2010 Angola – During 2010, we closed the sale of a 20 percent outside-operated interest in our E&P segment’s Production Sharing Contract and Joint Operating Agreement in Block 32 offshore Angola.
We received net proceeds of $1.3 billion and recorded a pretax gain on the sale of $811 million.
We retained a 10 percent outside-operated interest in Block 32.
Gudrun – In March 2011, we closed the sale of our outside-operated interests in the Gudrun field development and the Brynhild and Eirin exploration areas offshore Norway for net proceeds of $85 million, excluding working capital adjustments.
A $64 million pretax loss on this disposition was recorded in the fourth quarter 2010.2009 Gabon – In December 2009, we closed the sale of our operated fields offshore Gabon, receiving net proceeds of $269 million, after closing adjustments.
A $232 million pretax gain on this disposition was reported in discontinued operations for 2009.
Permian Basin – In June 2009, we closed the sale of our E&P segment’s operated and a portion of our outsideoperated Permian Basin producing assets in New Mexico and west Texas for net proceeds after closing adjustments of $293 million.
A $196 million pretax gain on the sale was recorded.
Ireland – In April 2009, we closed the sale of our operated properties in Ireland for net proceeds of $84 million, after adjusting for cash held by the sold subsidiary.
A $158 million pretax gain on the sale was recorded.
As a result of this sale, we terminated our pension plan in Ireland, incurring a charge of $18 million.
In June 2009, we entered into an agreement to sell the subsidiary holding our 19 percent outside-operated interest in the Corrib natural gas development offshore Ireland.
An initial $100 million payment was received at closing.
Additional fixed proceeds of $135 million will be received at the earlier of first commercial gas or December 31, 2012.
A $154 million impairment was recognized in discontinued operations in the second quarter of 2009.
Our Irish and our Gabonese businesses, which had been reported in our E&P segment, have been reported as discontinued operations in the consolidated statements of income and the consolidated statements of cash flows.
Revenues and pretax income related to these businesses are shown in the table below.

<table><tr><td> (Millions of Dollars)</td><td>2007</td><td>2006</td><td>Variance 2007 vs. 2006</td><td>2005</td><td>Variance 2006 vs. 2005</td></tr><tr><td>Operating activities</td><td>$1,555</td><td>$1,354</td><td>$201</td><td>$790</td><td>$564</td></tr><tr><td>Investing activities</td><td>-2,086</td><td>-1,918</td><td>-168</td><td>-1,274</td><td>-644</td></tr><tr><td>Financing activities</td><td>647</td><td>577</td><td>70</td><td>539</td><td>38</td></tr><tr><td>Net change</td><td>116</td><td>13</td><td>103</td><td>55</td><td>-42</td></tr><tr><td>Balance at beginning of period</td><td>94</td><td>81</td><td>13</td><td>26</td><td>55</td></tr><tr><td>Balance at end of period</td><td>$210</td><td>$94</td><td>$116</td><td>$81</td><td>$13</td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td>2007</td><td>2006</td><td>Variance 2007 vs. 2006</td><td>2005</td><td>Variance 2006 vs. 2005</td></tr><tr><td>Operating activities</td><td>$1,251</td><td>$1,163</td><td>$88</td><td>$818</td><td>$345</td></tr><tr><td>Investing activities</td><td>-2,021</td><td>-1,839</td><td>-182</td><td>-1,167</td><td>-672</td></tr><tr><td>Financing activities</td><td>844</td><td>662</td><td>182</td><td>400</td><td>262</td></tr><tr><td>Net change</td><td>74</td><td>-14</td><td>88</td><td>51</td><td>-65</td></tr><tr><td>Balance at beginning of period</td><td>47</td><td>61</td><td>-14</td><td>10</td><td>51</td></tr><tr><td>Balance at end of period</td><td>$121</td><td>$47</td><td>$74</td><td>$61</td><td>$-14</td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td> 2006</td><td></td><td> 2005</td><td></td><td colspan="2"> Increase/ (Decrease)</td></tr><tr><td>Property taxes</td><td>$30</td><td></td><td>$30</td><td></td><td></td><td>$-</td></tr><tr><td>State and local taxes related to revenue receipts</td><td>13</td><td></td><td>13</td><td></td><td></td><td>-</td></tr><tr><td>Payroll taxes</td><td>4</td><td></td><td>4</td><td></td><td></td><td>-</td></tr><tr><td> Total</td><td>$47</td><td> (a)</td><td>$47</td><td> (a)</td><td> $</td><td> -</td></tr></table>
<table><tr><td></td><td colspan="4">Twelve months ended December 31, 2008</td><td colspan="2" rowspan="2" At December 31, 2008  Assets></td><td></td></tr><tr><td> (Millions of Dollars)</td><td colspan="2">Operating Revenues</td><td colspan="2">Net Income</td><td></td></tr><tr><td>Con Edison of New York</td><td>$10,424</td><td>77%</td><td>$783</td><td>65%</td><td>$30,415</td><td>91%</td><td></td></tr><tr><td>O&R</td><td>991</td><td>7%</td><td>44</td><td>4%</td><td>2,157</td><td>6%</td><td></td></tr><tr><td> Total Utilities</td><td>11,415</td><td>84%</td><td>827</td><td>69%</td><td>32,572</td><td> 97</td><td> %</td></tr><tr><td>Con Edison Development (a)</td><td>48</td><td>-%</td><td>146</td><td>12%</td><td>407</td><td>1%</td><td></td></tr><tr><td>Con Edison Energy (a)</td><td>878</td><td>7%</td><td>-17</td><td>-1%</td><td>223</td><td>1%</td><td></td></tr><tr><td>Con Edison Solutions (a)</td><td>1,258</td><td>9%</td><td>-56</td><td>-5%</td><td>38</td><td>-%</td><td></td></tr><tr><td>Other (b)</td><td>-16</td><td>-%</td><td>22</td><td>2%</td><td>258</td><td>1%</td><td></td></tr><tr><td> Total continuing operations</td><td>13,583</td><td>100%</td><td>922</td><td>77%</td><td>33,498</td><td> 100</td><td> %</td></tr><tr><td>Discontinued operations (c)</td><td>-</td><td>-%</td><td>274</td><td>23%</td><td>-</td><td>-%</td><td></td></tr><tr><td> Total Con Edison</td><td>$13,583</td><td>100%</td><td>$1,196</td><td>100%</td><td>$33,498</td><td> 100</td><td> %</td></tr></table>

Question: What is the ratio of all elements that are smaller than 200 to the sum of elements in Net Income?
Answer: 0.11622