Notes to the Financial Statements — Continued Note H – Other Material Contingencies Manhattan Steam Main Rupture In July 2007, a Con Edison of New York steam main located in midtown Manhattan ruptured.
It has been reported that one person died and others were injured as a result of the incident.
Several buildings in the area were damaged.
Debris from the incident included dirt and mud containing asbestos.
The response to the incident required the closing of several buildings and streets for various periods.
As of December 31, 2008, with respect to the incident, the company incurred estimated operating costs of $35 million for property damage, clean up and other response costs, recorded $21 million in actual and expected insurance recoveries and invested $12 million in capital, retirement and other costs.
Over ninety suits are pending against the company seeking generally unspecified compensatory and, in some cases, punitive damages, for personal injury, property damage and business interruption.
The company has notified its insurers of the incident and believes that the policies in force at the time of the incident will cover most of the company’s costs, which the company is unable to estimate, but which could be substantial, to satisfy its liability to others in connection with the incident.
In November 2008, the PSC approved a Joint Proposal among Con Edison of New York, the PSC staff and the New York State Consumer Protection Board with respect to the PSC’s ongoing proceeding relating to the steam main rupture.
Pursuant to the Joint Proposal, among other things, the company (i) will not recover from customers the operating, capital and retirement costs it incurred as a result of the steam main rupture; (ii) will, in general, effectively be limited in its recovery from customers of premiums for its excess liability insurance policies for each of the policy years beginning April 2008 through April 2011 to amounts designed to prevent recovery of any premium increase resulting from the steam main rupture; and (iii) will be released from all prudence-related claims that were or could have been asserted in any PSC proceeding relating to the steam main rupture other than with respect to any damage to company facilities, or incremental costs, that are neither known nor reasonably foreseeable.
In August 2008, the company entered into a second agreement with the PSC staff, which became effective upon the approval by the PSC of the Joint Proposal, pursuant to which in lieu of a penalty action for violations, if any, of the Public Service Law or the PSC’s regulations or orders as a result of the steam main rupture, the company accrued a $4 million regulatory liability to be used for future steam customer benefit.
Investigation of Contractor Payments Con Edison of New York has commenced an internal investigation following the arrest in January 2009 of ten employees and one retired employee for accepting kickbacks from a contractor that performed construction work for the company.
The company has retained a law firm and is retaining an accounting firm to assist in its investigation.
The company is providing information to governmental authorities in connection with their investigation of the arrested employees and contractor.
The company has terminated its employment of the arrested employees and its contracts with the contractor.
In February 2009, the PSC commenced a proceeding that, among other things, will examine the prudence of certain of the company’s expenditures relating to the arrests and consider whether additional expenditures should also be examined.
The company, based upon its evaluation of its internal controls for 2008 and previous years, believes that the controls were effective to provide reasonable assurance that its financial statements have been fairly presented, in all material respects, in conformity with generally accepted accounting principles.
Because the company’s investigation is in its early stages, the company is unable to predict the impact of any of the employees’ unlawful conduct on the company’s internal controls, business, results of operations or financial position.
Other Contingencies See “Lease In/Lease Out Transactions” in Note J.
Guarantees Con Edison and its subsidiaries enter into various agreements providing financial or performance assurance primarily to third parties on behalf of their subsidiaries.
Maximum amounts guaranteed by Con Edison totaled $1.6 billion and $1.4 billion at December 31, 2008 and 2007, respectively.
A summary, by type and term, of Con Edison’s total guarantees at December 31, 2008 is as follows:
## Table 0 ##
Commodity Transactions – Con Edison guarantees payments on behalf of its competitive energy businesses in order to facilitate physical and financial transactions in gas, pipeline capacity, transportation, oil, electricity and related commodity services.
To the extent that liabilities exist under the contracts subject to these guarantees, such liabilities are included in Con Edison’s consolidated balance sheet.
Affordable Housing Program – Con Edison Development guarantees the repurchase and remarketing obligations of one of its subsidiaries for debt relating to moderate-income rental apartment properties eligible for tax credits under Section 42 of the Internal Revenue Code.
In accordance with Emerging Issues
Notes to the Financial Statements — Continued reflect certain tax positions with which the IRS does not or may not agree, including tax positions with respect to the deduction of certain construction-related costs for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The field audits of the Companies’ New York State income tax returns have been completed through 2005.
Any adjustments to federal income tax returns will result in the Companies filing the federal audit changes with New York State to incorporate in the applicable state income tax returns.
The Companies’ uncertain tax positions include the “simplified service cost method” (SSCM) used to determine the extent to which construction-related costs could be deducted in 2002 through 2005.
In July 2008, the IRS entered into a closing agreement with Con Edison covering the Companies’ use of the SSCM to determine the extent to which construction- related costs could be deducted in 2002 through 2004.
The closing agreement does not cover 2005, the last year for which SSCM is an uncertain tax position.
The Companies do not expect the required repayment, with interest, to the IRS of their SSCM tax benefits for 2002 through 2005 to exceed the $160 million ($147 million of which is attributable to Con Edison of New York) the Companies paid to the IRS in June 2007 as a deposit for the repayment.
Repayment of the SSCM tax benefits would not affect the Companies’ results of operations because deferred taxes have been previously provided for the related temporary differences between the SSCM deductions taken for federal income tax purposes and the corresponding amounts charged to expense for financial reporting purposes.
The Companies notified New York State of the closing agreement with the IRS applicable to the years 2002 through 2004 and, in December 2008, made a payment of $34 million, including interest of $12 million ($31 million, including interest of $10 million, is attributable to Con Edison of New York) in settlement of the issue for those years.
Upon adoption of FIN 48, Con Edison and Con Edison of New York reclassified previously recorded tax liabilities of $151 million and $139 million, respectively, which primarily related to SSCM, to a liability for uncertain tax positions.
At December 31, 2008 and 2007, the liabilities for uncertain tax positions for Con Edison were $118 million and $155 million, respectively, and for Con Edison of New York were $108 million and $142 million, respectively, and accrued interest on the liabilities amounted to $18 million and $35 million for Con Edison, respectively, and $15 million and $31 million for Con Edison of New York, respectively.
The closing agreement with the IRS and payment to New York State in settlement of SSCM for years 2002 through 2004 resulted in the decrease in accrued interest balances for uncertain tax positions.
The Companies recognize interest accrued related to the liability for uncertain tax positions in interest expense and penalties, if any, in operating expenses in the Companies’ consolidated income statements.
In 2008, the Companies recognized an immaterial amount of interest expense for uncertain tax positions.
In 2007, Con Edison recognized interest expense for uncertain tax positions of $11 million, of which $9 million is attributable to Con Edison of New York.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for Con Edison and Con Edison of New York follows:
## Table 1 ##
he Companies do not expect the total amounts of uncertain tax positions or unrecognized tax benefits to significantly increase or decrease within the next 12 months.
Note M – Stock-Based Compensation The Companies may compensate employees and directors with, among other things, stock options, restricted stock units and contributions to a discount stock purchase plan.
The Stock Option Plan (the 1996 Plan) provided for awards of stock options to officers and employees for up to 10 million shares of Con Edison common stock.
The Long Term Incentive Plan (LTIP) among other things, provides for awards of restricted stock units, stock options and, to Con Edison's non-officer directors, deferred stock units for up to 10 million shares of common stock (of which not more than four million shares may be restricted stock or stock units).
Shares of Con Edison common stock used to satisfy the Companies’ obligations with respect to stock-based compensation may be new (authorized, but unissued) shares,
ITEM 6.
SELECTED FINANCIAL DATA Con Edison
## Table 2 ##
* Reflects a $124 million pre-tax charge in 2004, in accordance with Con Edison of New York’s electric, gas and steam rate plans.
** See Notes U and V to the financial statements in Item 8.
*** Reflects a $3,519 million increase in regulatory assets for unrecognized pension and other retirement costs.
See Notes E and F to the financial statements in Item 8.
## Table 3 ##
* Reflects $124 million pre-tax charge in 2004, in accordance with Con Edison of New York’s electric, gas and steam rate plans.
** Reflects a $3,392 million increase in regulatory asset for unrecognized pension and other retirement costs.
See Notes E and F to the financial statements in Item 8.
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, decreased $5 million in 2007 compared with 2006.
The principal components of taxes, other than income taxes, were:
## Table 4 ##
(a) Including sales tax on customers’ bills, total taxes other than income taxes, billed to customers in 2007 and 2006 were $71 million and $73 million, respectively.
Income Taxes Operating income taxes decreased by $1 million in 2007 compared with 2006.
Other Income (Deductions) Other income (deductions) decreased $3 million in 2007 compared with 2006 due primarily to the sale of non-utility property and higher interest income in 2006.
Net Interest Expense Net interest expense increased $6 million in 2007 compared with 2006 due primarily to a new debt issuance in late 2006 and interest accrued for the potential repayment of tax benefits from the timing of tax deductions of certain construction related costs (see Note L to the financial statements).
Competitive Energy Businesses The competitive energy businesses’ operating income and earnings from continuing operations increased $2 million and $18 million, respectively, in 2007 compared with 2006 due primarily to higher gross margins from generating plants and wholesale sales, higher income from investments and lower mark-to-market losses, offset in part by lower gross margins from electric retail sales.
Operating revenues increased $384 million in 2007 compared with 2006, primarily due to higher electric wholesale and retail revenues.
Electric wholesale revenues increased $134 million, of which $150 million was due to higher sales volume, offset by a $16 million decrease in unit prices.
Electric retail revenues increased $190 million in 2007 as compared with 2006, of which $173 million was due to higher sales volumes and $17 million was due to an increase in unit prices.
While electric retail revenues increased more than 16 percent from 2006 to 2007, gross margins decreased by approximately 20 percent due primarily to lower margins on indexed priced products.
Revenue from the sale of electricity from the competitive energy businesses’ generation facilities increased $26 million in 2007 as compared with 2006 due primarily to higher capacity prices.
Net mark-to-market losses decreased $17 million in 2007 as compared with 2006 due primarily to higher prices on electric and natural gas contracts, which were economic hedges that supported retail obligations (but were not accounted for as cash flow hedges).
Other revenues increased $17 million in 2007 as compared with 2006 due primarily to energy services revenue.
Operating expenses excluding income taxes increased $373 million in 2007 compared with 2006, reflecting increased purchased power ($348 million), other operations and maintenance costs ($19 million) and fuel costs ($8 million) offset in part by lower gas purchased for resale costs ($2 million).
Other income increased $12 million in 2007 as compared with 2006 due primarily to a $6 million gain from the sale of an equity investment.
Income taxes increased $10 million in 2007 as compared with 2006, reflecting primarily higher income.
Discontinued Operations Net income from discontinued operations was $4 million in 2007 compared with a $3 million loss in 2006, reflecting lower mark-to-market losses in 2007 from certain Con Edison Development generation projects.
See Note V 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.
Packaging Corporation of America Notes to ConsolidatedFinancial Statements (Continued) December 31, 2005F-279.
SHAREHOLDERS’ EQUITY (Continued) stockholder received proceeds, net ofthe underwriting discount, of $20.69 per share.
The Company did not sell any shares in, or receive any proceeds from, the secondary offering.
Concurrent with the closing of the secondary offering onDecember 21, 2005, the Company entered into a common stock repurchase agreement withPCAHoldings LLC.
Pursuant to the repurchase agreement, the Company purchased 4,500,000shares of commonstock directly from PCA Holdings LLC at the initial price to the public net of the underwritingdiscount or $20.69 per share, the same net price per share received by PCA Holdings LLC in the secondary offering.
These shares were retired on December 21, 2005.10.
COMMITMENTS AND CONTINGENCIES Capital Commitments The Company had authorized capital expenditures of approximately $33.1 million and$55.2 million asof December 31, 2005 and 2004, respectively, in connection with the expansion and replacement of existingfacilities and equipment.
Operating Leases PCA leases space for certain of its facilities and cutting rights to approximately 108,000 acres of timberland under long-term leases.
The Company also leases equipment, primarily vehicles and rollingstock, and other assets under long-term leases of aduration generally of three years.
The minimum lease payments under non-cancelable operating leases with lease terms in excess of one year are as follows:
## Table 5 ##
Capital lease obligations were not significant to the accompanyingfinancial statements.
Total lease expense, including base rent on all leases and executory costs, such as insurance, taxes, and maintenance, for the years ended December 31, 2005, 2004 and 2003was $35.8 million, $33.0 million and $31.6 million, respectively.
These costs are included incost of goods sold and selling and administrative expenses.

<table><tr><td> Guarantee Type (Millions of Dollars)</td><td> 0 – 3 years</td><td> 4 –10 years</td><td> > 10 years</td><td> Total</td></tr><tr><td>Commodity transactions</td><td>$895</td><td>$43</td><td>$143</td><td>$1,081</td></tr><tr><td>Affordable housing program</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>Intra-company guarantees</td><td>39</td><td>-</td><td>1</td><td>40</td></tr><tr><td>Other guarantees</td><td>445</td><td>34</td><td>-</td><td>479</td></tr><tr><td> TOTAL</td><td>$1,379</td><td>$89</td><td>$144</td><td>$1,612</td></tr></table>
<table><tr><td></td><td colspan="2">Con Edison</td><td colspan="2">Con Edison of New York</td></tr><tr><td> (Millions of Dollars)</td><td>2008</td><td>2007</td><td>2008</td><td>2007</td></tr><tr><td>Balance at the beginning of the year</td><td>$155</td><td>$151</td><td>$142</td><td>$139</td></tr><tr><td>Additions based on tax positions related to the current year</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Additions based on tax positions of prior years</td><td>-</td><td>19</td><td>-</td><td>17</td></tr><tr><td>Reductions for tax positions of prior years</td><td>-14</td><td>-15</td><td>-13</td><td>-14</td></tr><tr><td>Settlements</td><td>-23</td><td>-</td><td>-21</td><td>-</td></tr><tr><td>Balance at the end of the year</td><td>$118</td><td>$155</td><td>$108</td><td>$142</td></tr></table>
<table><tr><td></td><td colspan="6">For the Year Ended December 31,</td></tr><tr><td> (Millions of Dollars, except per share amounts)</td><td> 2008</td><td></td><td> 2007</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Operating revenues</td><td>$13,583</td><td> </td><td>$13,120</td><td>$11,962</td><td>$11,343</td><td>$9,488*</td></tr><tr><td>Purchased power</td><td>5,749</td><td> </td><td>5,428</td><td>4,976</td><td>4,700</td><td>3,925</td></tr><tr><td>Fuel</td><td>663</td><td> </td><td>624</td><td>553</td><td>596</td><td>437</td></tr><tr><td>Gas purchased for resale</td><td>1,172</td><td> </td><td>1,173</td><td>1,082</td><td>1,154</td><td>852</td></tr><tr><td>Operating income</td><td>1,407</td><td> </td><td>1,394</td><td>1,221</td><td>1,126</td><td>896</td></tr><tr><td>Income from continuing operations</td><td>922</td><td> </td><td>925</td><td>740</td><td>745</td><td>565</td></tr><tr><td>Income/(Loss) from discontinued operations**</td><td>274</td><td> </td><td>4</td><td>-3</td><td>-26</td><td>-28</td></tr><tr><td>Net income</td><td>1,196</td><td> </td><td>929</td><td>737</td><td>719</td><td>537</td></tr><tr><td>Total assets</td><td>33,498</td><td> ***</td><td>28,262</td><td>26,699</td><td>24,848</td><td>22,560</td></tr><tr><td>Long-term debt</td><td>9,232</td><td> </td><td>7,611</td><td>8,298</td><td>7,398</td><td>6,561</td></tr><tr><td>Common shareholders’ equity</td><td>9,698</td><td> </td><td>9,076</td><td>8,004</td><td>7,310</td><td>7,054</td></tr><tr><td> Basic earnings per share</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$3.37</td><td> </td><td>$3.48</td><td>$2.97</td><td>$3.05</td><td>$2.40</td></tr><tr><td>Discontinued operations**</td><td>$1.01</td><td> </td><td>$0.01</td><td>$-0.01</td><td>$-0.10</td><td>$-0.12</td></tr><tr><td>Net Income</td><td>$4.38</td><td> </td><td>$3.49</td><td>$2.96</td><td>$2.95</td><td>$2.28</td></tr><tr><td> Diluted earnings per share</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$3.36</td><td> </td><td>$3.46</td><td>$2.96</td><td>$3.04</td><td>$2.39</td></tr><tr><td>Discontinued operations**</td><td>$1.01</td><td> </td><td>$0.01</td><td>$-0.01</td><td>$-0.10</td><td>$-0.12</td></tr><tr><td>Net income</td><td>$4.37</td><td> </td><td>$3.47</td><td>$2.95</td><td>$2.94</td><td>$2.27</td></tr><tr><td>Cash dividends per common share</td><td>$2.34</td><td> </td><td>$2.32</td><td>$2.30</td><td>$2.28</td><td>$2.26</td></tr><tr><td>Average common shares outstanding (millions)</td><td>273</td><td> </td><td>266</td><td>249</td><td>244</td><td>236</td></tr></table>
<table><tr><td></td><td colspan="6"> For the Year Ended December 31,</td><td></td></tr><tr><td> (Millions of Dollars)</td><td> 2008</td><td></td><td> 2007</td><td> 2006</td><td> 2005</td><td> 2004</td><td></td></tr><tr><td>Operating revenues</td><td>$10,424</td><td> </td><td>$9,886</td><td>$9,288</td><td>$9,227</td><td>$7,971</td><td>*</td></tr><tr><td>Purchased power</td><td>3,185</td><td> </td><td>3,014</td><td>3,052</td><td>3,322</td><td>3,029</td><td></td></tr><tr><td>Fuel</td><td>660</td><td> </td><td>588</td><td>525</td><td>526</td><td>404</td><td></td></tr><tr><td>Gas purchased for resale</td><td>999</td><td> </td><td>978</td><td>902</td><td>965</td><td>709</td><td></td></tr><tr><td>Operating income</td><td>1,271</td><td> </td><td>1,278</td><td>1,110</td><td>1,041</td><td>825</td><td></td></tr><tr><td>Net income for common stock</td><td>783</td><td> </td><td>844</td><td>686</td><td>694</td><td>518</td><td></td></tr><tr><td>Total assets</td><td>30,415</td><td> **</td><td>24,504</td><td>22,816</td><td>21,144</td><td>19,244</td><td></td></tr><tr><td>Long-term debt</td><td>8,494</td><td> </td><td>7,172</td><td>6,925</td><td>6,055</td><td>5,235</td><td></td></tr><tr><td>Common shareholder’s equity</td><td>8,991</td><td> </td><td>8,086</td><td>7,132</td><td>6,437</td><td>6,116</td><td></td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td> 2007</td><td></td><td> 2006</td><td></td><td>Increase/ (Decrease)</td></tr><tr><td>Property taxes</td><td>$25</td><td></td><td>$30</td><td></td><td>$-5</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></tr><tr><td>Payroll taxes</td><td>4</td><td></td><td>4</td><td></td><td>-</td></tr><tr><td> Total</td><td>$42</td><td> (a)</td><td>$47</td><td> (a)</td><td>$-5</td></tr></table>
<table><tr><td>2006</td><td>$24,569</td></tr><tr><td>2007</td><td>21,086</td></tr><tr><td>2008</td><td>14,716</td></tr><tr><td>2009</td><td>9,801</td></tr><tr><td>2010</td><td>6,670</td></tr><tr><td>Thereafter</td><td>37,130</td></tr><tr><td>Total</td><td>$113,972</td></tr></table>

Question: Does the value of Operating income in 2008 greater than that in 2007?
Answer: no