Form 10-QSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

|ý                                             | Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 
|--------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended MARCH 31, 2004
|OR                                            |                                                                                         
|o                                             | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

|Commission
File Number |  | Exact name of registrant as specified in its charter
and principal office address and telephone number |  | State of
Incorporation |  | I.R.S. Employer
ID. Number
|---------------------- |  | ------------------------------------------------------------------------------------------------------ |  | ---------------------- |  | --------------------------
|1-14514                |  | Consolidated Edison, Inc.4 Irving Place, New York, New York 10003
(212) 460-4600                       |  | New York               |  | 13-3965100                
|1-1217                 |  | Consolidated Edison Company of New York, Inc.4 Irving Place, New York, New York 10003
(212) 460-4600   |  | New York               |  | 13-5009340                
|1-4315                 |  | Orange and Rockland Utilities, Inc.One Blue Hill Plaza, Pearl River, New York 10965
(845) 352-6000     |  | New York               |  | 13-1727729                

Indicate by check mark whether each Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past
90 days. YesýNoo

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Consolidated Edison, Inc. (Con Edison)

YesýNooConsolidated Edison Company of New York, Inc. (Con Edison of New York)

YesoNoýOrange and Rockland Utilities, Inc. (O&R)

YesoNoý


As of the close of business on April 30, 2004, Con Edison had outstanding 226,944,179 Common Shares ($.10 par value). Con Edison owns all of the
outstanding common equity of Con Edison of New York and O&R.

1

---





Filing Format

This Quarterly Report on Form 10-Q is a combined report being filed separately by three different registrants: Consolidated Edison, Inc. (Con Edison),
Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R, and together with Con Edison of New York, are collectively referred
to in this combined report as the "Utilities"). The Utilities are subsidiaries of Con Edison and, as such, the information in this report about each of the Utilities also applies to Con Edison. Con
Edison and the Utilities are collectively referred to in this combined report as the "Companies." However, neither of the Utilities makes any representation as to the information contained in this
report relating to Con Edison or the subsidiaries of Con Edison other than itself.

TABLE OF CONTENTS

|                             |  |                                                                                       |  |                                           |  |                                                       |  | PAGE
|---------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------- |  | ----------------------------------------------------- |  | ----
|Glossary of Terms            |  | 3                                                                                    
|PART IFinancial Information |  |                                                                                      
|Item 1                       |  | Financial Statements (Unaudited)                                                      |  |                                          
|                             |  |                                                                                       |  | Con Edison                                |  |                                                      
|                             |  |                                                                                       |  |                                           |  | Consolidated Balance Sheet                            |  | 4   
|                             |  |                                                                                       |  |                                           |  | Consolidated Income Statement                         |  | 6   
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Comprehensive Income        |  | 7   
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Common Shareholders' Equity |  | 8   
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Cash Flows                  |  | 9   
|                             |  |                                                                                       |  | Con Edison of New York                    |  |                                                      
|                             |  |                                                                                       |  |                                           |  | Consolidated Balance Sheet                            |  | 10  
|                             |  |                                                                                       |  |                                           |  | Consolidated Income Statement                         |  | 12  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Comprehensive Income        |  | 13  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Common Shareholder's Equity |  | 14  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Cash Flows                  |  | 15  
|                             |  |                                                                                       |  | O&R                                       |  |                                                      
|                             |  |                                                                                       |  |                                           |  | Consolidated Balance Sheet                            |  | 16  
|                             |  |                                                                                       |  |                                           |  | Consolidated Income Statement                         |  | 18  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Comprehensive Income        |  | 19  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Common Shareholder's Equity |  | 20  
|                             |  |                                                                                       |  |                                           |  | Consolidated Statement of Cash Flows                  |  | 21  
|                             |  |                                                                                       |  | Notes to Financial Statements (Unaudited) |  | 22                                                   
|Item 2                       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 38                                       
|Item 3                       |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 54                                       
|Item 4                       |  | Controls and Procedures                                                               |  | 54                                       
|                             |  | Forward-Looking Statements                                                            |  | 54                                       
|PART IIOther Information    |  |                                                                                      
|Item 1                       |  | Legal Proceedings                                                                     |  | 55                                       
|Item 6                       |  | Exhibits and Reports on Form 8-K                                                      |  | 55                                       
|Signatures                   |  | 57                                                                                   

2

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GLOSSARY OF TERMS

The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report:

Con Edison CompaniesCon Edison

Consolidated Edison, Inc.Con Edison Communications

Con Edison Communications, LLCCon Edison Development

Consolidated Edison Development, Inc.Con Edison Energy

Consolidated Edison Energy, Inc.Con Edison of New York

Consolidated Edison Company of New York, Inc.Con Edison Solutions

Consolidated Edison Solutions, Inc.O&R

Orange and Rockland Utilities, Inc.RECO

Rockland Electric CompanyThe Companies

Con Edison, Con Edison of New York and O&R, collectivelyThe Utilities

Con Edison of New York and O&RRegulatory and State AgenciesNJBPU

New Jersey Board of Public UtilitiesNYPA

New York Power AuthorityPSC

New York State Public Service CommissionSEC

Securities and Exchange CommissionOtherAFDC

Allowance for Funds used During ConstructionDTH

DekathermEITF

Emerging Issues Task ForceFASB

Financial Accounting Standards BoardForm 10-K

Companies' combined Annual Report on Form 10-K for the year ended December 31, 2003FSP

FASB Staff PositionkWh

Kilowatt-hourMD&A

Management's Discussion and Analysis of Financial Condition and Results of OperationsMW

Megawatts or thousand kilowattsNUG

Non-Utility GeneratorNYISO

New York Independent System OperatorOCI

Other Comprehensive IncomePCBs

Polychlorinated biphenylsPPA

Purchase Power AgreementSFAS

Statement of Financial Accounting StandardsSuperfund

Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980VaR

Value-at-Risk


3

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Consolidated Edison, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                                |                                                                                                                         
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------
|
|
|
|ASSETS                                                          |                                                                                                                         
|UTILITY PLANT, AT ORIGINAL COST                                 |                                                                                                                         
|                                                                | Electric                                                                                                                
|                                                                | Gas                                                                                                                     
|                                                                | Steam                                                                                                                   
|                                                                | General                                                                                                                 
|                                                               
|                                                                | TOTAL                                                                                                                   
|                                                                | Less: Accumulated depreciation                                                                                          
|                                                               
|                                                                | NET                                                                                                                     
|                                                                | Construction work in progress                                                                                           
|                                                               
|NET UTILITY PLANT                                               |                                                                                                                         
|                                                               
|NON-UTILITY PLANT                                               |                                                                                                                         
|                                                                | Unregulated generating assets, less accumulated depreciation of $58 and $52 in 2004 and 2003, respectively              
|                                                                | Non-utility property, less accumulated depreciation of $23 and $15 in 2004 and 2003, respectively                       
|                                                                | Construction work in progress                                                                                           
|                                                               
|NET PLANT                                                       |                                                                                                                         
|                                                               
|CURRENT ASSETS                                                  |                                                                                                                         
|                                                                | Cash and temporary cash investments                                                                                     
|                                                                | Restricted cash                                                                                                         
|                                                                | Accounts receivable - customers, less allowance for uncollectible accounts of $34 and $36 in 2004 and 2003, respectively
|                                                                | Accrued unbilled revenue                                                                                                
|                                                                | Other receivables, less allowance for uncollectible accounts of $7 in 2004 and 2003                                     
|                                                                | Fuel, at average cost                                                                                                   
|                                                                | Gas in storage, at average cost                                                                                         
|                                                                | Materials and supplies, at average cost                                                                                 
|                                                                | Prepayments                                                                                                             
|                                                                | Other current assets                                                                                                    
|                                                               
|TOTAL CURRENT ASSETS                                            |                                                                                                                         
|                                                               
|INVESTMENTS                                                     |                                                                                                                         
|                                                               
|DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS       |                                                                                                                         
|                                                                | Goodwill                                                                                                                
|                                                                | Intangible assets, less accumulated amortization of $18 and $16 in 2004 and 2003, respectively                          
|                                                                | Prepaid pension costs                                                                                                   
|                                                                | Regulatory assets                                                                                                       
|                                                                | Other deferred charges and noncurrent assets                                                                            
|                                                               
|TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS |                                                                                                                         
|                                                               
|TOTAL ASSETS                                                    | $                                                                                                                       
|                                                               

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

4

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Consolidated Edison, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                  |                                                                            |  
|------------------------------------------------- | -------------------------------------------------------------------------- | -
|
|
|
|CAPITALIZATION AND LIABILITIES                    |                                                                            |  
|CAPITALIZATION                                    |                                                                            |  
|                                                  | Common shareholders' equity (See Statement of Common Shareholders' Equity) |  
|                                                  | Preferred stock of subsidiary                                              |  
|                                                  | Long-term debt                                                             |  
|                                                 
|TOTAL CAPITALIZATION                              |                                                                            |  
|                                                 
|MINORITY INTERESTS                                |                                                                            |  
|NONCURRENT LIABILITIES                            |                                                                            |  
|                                                  | Obligations under capital leases                                           |  
|                                                  | Provision for injuries and damages                                         |  
|                                                  | Pensions and retiree benefits                                              |  
|                                                  | Superfund and other environmental costs                                    |  
|                                                  | Other noncurrent liabilities                                               |  
|                                                 
|TOTAL NONCURRENT LIABILITIES                      |                                                                            |  
|                                                 
|CURRENT LIABILITIES                               |                                                                            |  
|                                                  | Long-term debt due within one year                                         |  
|                                                  | Notes payable                                                              |  
|                                                  | Accounts payable                                                           |  
|                                                  | Customer deposits                                                          |  
|                                                  | Accrued taxes                                                              |  
|                                                  | Accrued interest                                                           |  
|                                                  | Accrued wages                                                              |  
|                                                  | Other current liabilities                                                  |  
|                                                 
|TOTAL CURRENT LIABILITIES                         |                                                                            |  
|                                                 
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                            |  
|                                                  | Deferred income taxes and investment tax credits                           |  
|                                                  | Regulatory liabilities                                                     |  
|                                                  | Other deferred credits                                                     |  
|                                                 
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                            |  
|                                                 
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                            | $
|                                                 

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

5

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Consolidated Edison, Inc.CONSOLIDATED INCOME STATEMENT(UNAUDITED)

|                                                             |                                                       | For the Three Months Ended March 31, |      
|------------------------------------------------------------ | ----------------------------------------------------- | ------------------------------------ | -----
|
|
|
|OPERATING REVENUES                                           |                                                       |                                      |      
|                                                             | Electric                                              |                                      | $    
|                                                             | Gas                                                   |                                      |      
|                                                             | Steam                                                 |                                      |      
|                                                             | Non-utility                                           |                                      |      
|                                                             |                                                      
|TOTAL OPERATING REVENUES                                     |                                                       |                                      | 2,685
|                                                             |                                                      
|OPERATING EXPENSES                                           |                                                       |                                      |      
|                                                             | Purchased power                                       |                                      |      
|                                                             | Fuel                                                  |                                      |      
|                                                             | Gas purchased for resale                              |                                      |      
|                                                             | Other operations and maintenance                      |                                      |      
|                                                             | Depreciation and amortization                         |                                      |      
|                                                             | Taxes, other than income taxes                        |                                      |      
|                                                             | Income taxes                                          |                                      |      
|                                                             |                                                      
|TOTAL OPERATING EXPENSES                                     |                                                       |                                      | 2,430
|                                                             |                                                      
|OPERATING INCOME                                             |                                                       |                                      | 255  
|                                                             |                                                      
|OTHER INCOME (DEDUCTIONS)                                    |                                                       |                                      |      
|                                                             | Investment and other income                           |                                      |      
|                                                             | Allowance for equity funds used during construction   |                                      |      
|                                                             | Other deductions                                      |                                      |      
|                                                             | Income taxes                                          |                                      |      
|                                                             |                                                      
|TOTAL OTHER INCOME (DEDUCTIONS)                              |                                                       |                                      | 17   
|                                                             |                                                      
|INCOME BEFORE INTEREST EXPENSE                               |                                                       |                                      | 272  
|                                                             |                                                      
|                                                             | Interest on long-term debt                            |                                      |      
|                                                             | Other interest                                        |                                      |      
|                                                             | Allowance for borrowed funds used during construction |                                      |      
|                                                             |                                                      
|NET INTEREST EXPENSE                                         |                                                       |                                      | 114  
|                                                             |                                                      
|INCOME BEFORE PREFERRED STOCK DIVIDENDS OF SUBSIDIARY        |                                                       |                                      | 158  
|PREFERRED STOCK DIVIDEND REQUIREMENTS OF SUBSIDIARY          |                                                       |                                      | 3    
|                                                             |                                                      
|NET INCOME FOR COMMON STOCK                                  |                                                       |                                      | 155  
|                                                             |                                                      
|EARNINGS PER COMMON SHARE - BASIC                            |                                                       | $                                    | 0.69 
|                                                             |                                                      
|EARNINGS PER COMMON SHARE - DILUTED                          |                                                       | $                                    | 0.68 
|                                                             |                                                      
|DIVIDENDS DECLARED PER SHARE OF COMMON STOCK                 |                                                       | $                                    | 0.565
|                                                             |                                                      
|AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC (IN MILLIONS)   |                                                       |                                      | 226.2
|                                                             |                                                      
|AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED (IN MILLIONS) |                                                       |                                      | 227.5
|                                                             |                                                      

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

6

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Consolidated Edison, Inc.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(UNAUDITED)

|                                               |                                                                                                                           | For the Three Months
Ended March 31,
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------------------------------------
|
|
|
|NET INCOME FOR COMMON STOCK                    |                                                                                                                           | $                                   
|OTHER COMPREHENSIVE INCOME, NET OF TAXES       |                                                                                                                           |                                     
|                                               | Minimum pension liability adjustments, net of $1 taxes in 2004                                                            |                                     
|                                               | Unrealized gains on derivatives qualified as hedges, net of $5 and $9 taxes in in 2004 and 2003, respectively             |                                     
|                                               | Less: Reclassification adjustment for gains included in net income, net of $3 and $8 taxes in 2004 and 2003, respectively |                                     
|                                              
|TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES |                                                                                                                           |                                     
|                                              
|COMPREHENSIVE INCOME                           |                                                                                                                           | $                                   
|                                              

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

7

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Consolidated Edison, Inc.CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITYFOR THE THREE MONTHS ENDED MARCH 31, 2004 AND
2003(MILLION OF DOLLARS/EXCEPT SHARE DATA)  (UNAUDITED)

|                                                                           |  | Common Stock |  |   |    |  |   | Treasury Stock |  |   |       | Accumulated
Other
Comprehensive
Income/(Loss) |            |  |  
|-------------------------------------------------------------------------- |  | ------------ |  | - | -- |  | - | -------------- |  | - | ----- | --------------------------------------------- | ---------- |  | -
|
|
|
|BALANCE AS OF DECEMBER 31, 2002                                            |  | 213,932,934  |  | $ | 24 |  | $ | 1,527          |  | $ | 5,420 |                                               | 23,210,700 |  | $
|Net income for common stock                                                |  |              |  |   |    |  |   |                |  |   | 154   |                                               |            |  |  
|Common stock dividends                                                     |  |              |  |   |    |  |   |                |  |   | (120  | )                                             |            |  |  
|Issuance of common shares - dividend reinvestment and employee stock plans |  | 510,447      |  |   |    |  |   | 20             |  |   | (1    | )                                             |            |  |  
|Other comprehensive income                                                 |  |              |  |   |    |  |   |                |  |   |       |                                               |            |  |  
|                                                                           | 
|BALANCE AS OF MARCH 31, 2003                                               |  | 214,443,381  |  | $ | 24 |  | $ | 1,547          |  | $ | 5,453 |                                               | 23,210,700 |  | $
|                                                                           | 
|BALANCE AS OF DECEMBER 31, 2003                                            |  | 225,840,220  |  | $ | 25 |  | $ | 2,003          |  | $ | 5,451 |                                               | 23,210,700 |  | $
|Net income for common stock                                                |  |              |  |   |    |  |   |                |  |   | 155   |                                               |            |  |  
|Common stock dividends                                                     |  |              |  |   |    |  |   |                |  |   | (127  | )                                             |            |  |  
|Issuance of common shares - dividend reinvestment and employee stock plans |  | 955,259      |  |   |    |  |   | 42             |  |   | (6    | )                                             |            |  |  
|Other comprehensive income                                                 |  |              |  |   |    |  |   |                |  |   |       |                                               |            |  |  
|                                                                           | 
|BALANCE AS OF MARCH 31, 2004                                               |  | 226,795,479  |  | $ | 25 |  | $ | 2,045          |  | $ | 5,473 |                                               | 23,210,700 |  | $
|                                                                           | 

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

8

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Consolidated Edison, Inc.CONSOLIDATED STATEMENT OF CASH FLOWS(UNAUDITED)

|                                                   |                                                | For the Three Months
Ended March 31, |                                                                                                                    
|-------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | -------------------------------------------------------------------------------------------------------------------
|
|
|
|OPERATING ACTIVITIES                               |                                                |                                      |                                                                                                                    
|                                                   | Income before preferred stock dividends        |                                      | $                                                                                                                  
|                                                   | PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME |                                      |                                                                                                                    
|                                                   |                                                |                                      | Depreciation and amortization                                                                                      
|                                                   |                                                |                                      | Deferred income taxes                                                                                              
|                                                   |                                                |                                      | Common equity component of allowance for funds used during construction                                            
|                                                   |                                                |                                      | Prepaid pension costs (net of capitalized amounts)                                                                 
|                                                   |                                                |                                      | Other non-cash charges                                                                                             
|                                                   | CHANGES IN ASSETS AND LIABILITIES              |                                      |                                                                                                                    
|                                                   |                                                |                                      | Accounts receivable - customers, less allowance for uncollectibles                                                 
|                                                   |                                                |                                      | Materials and supplies, including fuel and gas in storage                                                          
|                                                   |                                                |                                      | Prepayments, other receivables and other current assets                                                            
|                                                   |                                                |                                      | Recoverable energy costs                                                                                           
|                                                   |                                                |                                      | Accounts payable                                                                                                   
|                                                   |                                                |                                      | Pensions and retiree benefits                                                                                      
|                                                   |                                                |                                      | Accrued taxes                                                                                                      
|                                                   |                                                |                                      | Accrued interest                                                                                                   
|                                                   |                                                |                                      | Deferred charges and regulatory assets                                                                             
|                                                   |                                                |                                      | Deferred credits and other regulatory liabilities                                                                  
|                                                   |                                                |                                      | Transmission congestion contracts                                                                                  
|                                                   |                                                |                                      | Other assets                                                                                                       
|                                                   |                                                |                                      | Other liabilities                                                                                                  
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES |                                                |                                      | 152                                                                                                                
|                                                   |                                               
|INVESTING ACTIVITIES                               |                                                |                                      |                                                                                                                    
|                                                   |                                                |                                      | Utility construction expenditures (excluding capitalized support costs of $8 and $9 in 2004 and 2003, respectively)
|                                                   |                                                |                                      | Cost of removal less salvage                                                                                       
|                                                   |                                                |                                      | Non-utility construction expenditures                                                                              
|                                                   |                                                |                                      | Regulated companies' non-utility construction expenditures                                                         
|                                                   |                                                |                                      | Common equity component of allowance for funds used during construction                                            
|                                                   |                                                |                                      | Investments by unregulated subsidiaries                                                                            
|                                                   |                                                |                                      | Demolition and remediation costs for First Avenue properties                                                       
|                                                   |                                               
|NET CASH FLOWS USED IN INVESTING ACTIVITIES        |                                                |                                      | (369                                                                                                               
|                                                   |                                               
|FINANCING ACTIVITIES                               |                                                |                                      |                                                                                                                    
|                                                   |                                                |                                      | Net proceeds from short-term debt                                                                                  
|                                                   |                                                |                                      | Repayment/retirement of long-term debt                                                                             
|                                                   |                                                |                                      | Additions to long-term debt                                                                                        
|                                                   |                                                |                                      | Issuance of common stock                                                                                           
|                                                   |                                                |                                      | Debt issuance costs                                                                                                
|                                                   |                                                |                                      | Common stock dividends                                                                                             
|                                                   |                                                |                                      | Preferred stock dividends of subsidiary                                                                            
|                                                   |                                               
|NET CASH FLOWS FROM FINANCING ACTIVITIES           |                                                |                                      | 223                                                                                                                
|                                                   |                                               
|CASH AND TEMPORARY CASH INVESTMENTS:               |                                                |                                      |                                                                                                                    
|NET CHANGE FOR THE PERIOD                          |                                                |                                      | 6                                                                                                                  
|BALANCE AT BEGINNING OF PERIOD                     |                                                |                                      | 49                                                                                                                 
|                                                   |                                               
|BALANCE AT END OF PERIOD                           |                                                | $                                    | 55                                                                                                                 
|                                                   |                                               
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION   |                                                |                                      |                                                                                                                    
|                                                   | Cash paid during the period for:               |                                      |                                                                                                                    
|                                                   |                                                |                                      | Interest                                                                                                           
|                                                   |                                                |                                      | Income taxes                                                                                                       
|                                                   |                                               

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

9

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Consolidated Edison Company of New York, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                                |                                                                                                                          |  
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | -
|
|
|
|ASSETS                                                          |                                                                                                                          |  
|UTILITY PLANT, AT ORIGINAL COST                                 |                                                                                                                          |  
|                                                                | Electric                                                                                                                 |  
|                                                                | Gas                                                                                                                      |  
|                                                                | Steam                                                                                                                    |  
|                                                                | General                                                                                                                  |  
|                                                               
|                                                                | TOTAL                                                                                                                    |  
|                                                                | Less: Accumulated depreciation                                                                                           |  
|                                                               
|                                                                | Net                                                                                                                      |  
|                                                                | Construction work in progress                                                                                            |  
|                                                               
|NET UTILITY PLANT                                               |                                                                                                                          |  
|                                                               
|NON-UTILITY PROPERTY                                            |                                                                                                                          |  
|                                                                | Non-utility property                                                                                                     |  
|                                                               
|NET PLANT                                                       |                                                                                                                          |  
|                                                               
|CURRENT ASSETS                                                  |                                                                                                                          |  
|                                                                | Cash and temporary cash investments                                                                                      |  
|                                                                | Accounts receivable - customers, less allowance for uncollectible accounts of $29 and $30 in 2004 and 2003, respectively |  
|                                                                | Other receivables, less allowance for uncollectible accounts of $5 and $4 in 2004 and 2003, respectively                 |  
|                                                                | Accounts receivable - from affiliated companies                                                                          |  
|                                                                | Fuel, at average cost                                                                                                    |  
|                                                                | Gas in storage, at average cost                                                                                          |  
|                                                                | Materials and supplies, at average cost                                                                                  |  
|                                                                | Prepayments                                                                                                              |  
|                                                                | Other current assets                                                                                                     |  
|                                                               
|TOTAL CURRENT ASSETS                                            |                                                                                                                          |  
|                                                               
|INVESTMENTS                                                     |                                                                                                                          |  
|                                                               
|DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS       |                                                                                                                          |  
|                                                                | Prepaid pension costs                                                                                                    |  
|                                                                | Regulatory assets                                                                                                        |  
|                                                                | Other deferred charges and noncurrent assets                                                                             |  
|                                                               
|TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS |                                                                                                                          |  
|                                                               
|TOTAL ASSETS                                                    |                                                                                                                          | $
|                                                               

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

10

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Consolidated Edison Company of New York, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                  |                                                                            | March 31, 2004 |                         | December 31, 2003
|------------------------------------------------- | -------------------------------------------------------------------------- | -------------- | ----------------------- | -----------------
|
|CAPITALIZATION AND LIABILITIES                    |                                                                            |                |                         |                  
|CAPITALIZATION                                    |                                                                            |                |                         |                  
|                                                  | Common shareholder's equity (See Statement of Common Shareholder's Equity) |                | $                       | 5,534            
|                                                  | Preferred stock                                                            |                |                         |                  
|                                                  |                                                                            |                | $5 Cumulative Preferred |                  
|                                                  |                                                                            |                | 4.65% Series C          |                  
|                                                  |                                                                            |                | 4.65% Series D          |                  
|                                                 
|                                                  |                                                                            |                | TOTAL PREFERRED STOCK   |                  
|                                                 
|                                                  | Long-term debt                                                             |                |                         | 5,689            
|                                                 
|TOTAL CAPITALIZATION                              |                                                                            |                | 11,436                  |                  
|                                                 
|NONCURRENT LIABILITIES                            |                                                                            |                |                         |                  
|                                                  | Obligations under capital leases                                           |                |                         | 35               
|                                                  | Provision for injuries and damages                                         |                |                         | 191              
|                                                  | Pensions and retiree benefits                                              |                |                         | 115              
|                                                  | Superfund and other environmental costs                                    |                |                         | 152              
|                                                  | Other noncurrent liabilities                                               |                |                         | 38               
|                                                 
|TOTAL NONCURRENT LIABILITIES                      |                                                                            |                | 531                     |                  
|                                                 
|CURRENT LIABILITIES                               |                                                                            |                |                         |                  
|                                                  | Long-term debt due within one year                                         |                |                         |                 
|                                                  | Notes payable                                                              |                |                         | 370              
|                                                  | Accounts payable                                                           |                |                         | 695              
|                                                  | Accounts payable to affiliated companies                                   |                |                         | 12               
|                                                  | Customer deposits                                                          |                |                         | 213              
|                                                  | Accrued taxes                                                              |                |                         | 19               
|                                                  | Accrued interest                                                           |                |                         | 88               
|                                                  | Accrued wages                                                              |                |                         | 74               
|                                                  | Other current liabilities                                                  |                |                         | 173              
|                                                 
|TOTAL CURRENT LIABILITIES                         |                                                                            |                | 1,644                   |                  
|                                                 
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                            |                |                         |                  
|                                                  | Deferred income taxes and investment tax credits                           |                |                         | 2,998            
|                                                  | Regulatory liabilities                                                     |                |                         | 1,654            
|                                                  | Other deferred credits                                                     |                |                         | 22               
|                                                 
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                            |                | 4,674                   |                  
|                                                 
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                            | $              | 18,285                  |                  
|                                                 

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

11

---





Consolidated Edison Company Of New York, Inc.CONSOLIDATED INCOME STATEMENT(UNAUDITED)

|                                      |                                                       | For the Three Months
Ended March 31, |      
|------------------------------------- | ----------------------------------------------------- | ------------------------------------ | -----
|
|
|
|OPERATING REVENUES                    |                                                       |                                      |      
|                                      | Electric                                              |                                      | $    
|                                      | Gas                                                   |                                      |      
|                                      | Steam                                                 |                                      |      
|                                      |                                                      
|TOTAL OPERATING REVENUES              |                                                       |                                      | 2,207
|                                      |                                                      
|OPERATING EXPENSES                    |                                                       |                                      |      
|                                      | Purchased power                                       |                                      |      
|                                      | Fuel                                                  |                                      |      
|                                      | Gas purchased for resale                              |                                      |      
|                                      | Other operations and maintenance                      |                                      |      
|                                      | Depreciation and amortization                         |                                      |      
|                                      | Taxes, other than income taxes                        |                                      |      
|                                      | Income taxes                                          |                                      |      
|                                      |                                                      
|TOTAL OPERATING EXPENSES              |                                                       |                                      | 1,977
|                                      |                                                      
|OPERATING INCOME                      |                                                       |                                      | 230  
|                                      |                                                      
|OTHER INCOME (DEDUCTIONS)             |                                                       |                                      |      
|                                      | Investment and other income                           |                                      |      
|                                      | Allowance for equity funds used during construction   |                                      |      
|                                      | Other deductions                                      |                                      |      
|                                      | Income taxes                                          |                                      |      
|                                      |                                                      
|TOTAL OTHER INCOME (DEDUCTIONS)       |                                                       |                                      | 15   
|                                      |                                                      
|INCOME BEFORE INTEREST EXPENSE        |                                                       |                                      | 245  
|                                      |                                                      
|                                      | Interest on long-term debt                            |                                      |      
|                                      | Other interest                                        |                                      |      
|                                      | Allowance for borrowed funds used during construction |                                      |      
|                                      |                                                      
|NET INTEREST EXPENSE                  |                                                       |                                      | 90   
|                                      |                                                      
|NET INCOME                            |                                                       |                                      | 155  
|PREFERRED STOCK DIVIDEND REQUIREMENTS |                                                       |                                      | 3    
|                                      |                                                      
|NET INCOME FOR COMMON STOCK           |                                                       | $                                    | 152  
|                                      |                                                      

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

12

---





Consolidated Edison Company of New York, Inc.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(UNAUDITED)

|                                               |                                                                | For the Three Months
Ended March 31,
|---------------------------------------------- | -------------------------------------------------------------- | ------------------------------------
|
|
|
|NET INCOME                                     |                                                                | $                                   
|OTHER COMPREHENSIVE INCOME, NET OF TAXES       |                                                                |                                     
|                                               | Minimum pension liability adjustments, net of $2 taxes in 2004 |                                     
|                                              
|TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES |                                                                |                                     
|                                              
|COMPREHENSIVE INCOME                           |                                                                | $                                   
|                                              

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

13

---





Consolidated Edison Company of New York, Inc.CONSOLIDATED STATEMENT OF COMMON SHAREHOLDER'S EQUITYFOR THE THREE MONTHS ENDED
MARCH 31, 2004 AND 2003(MILLIONS OF DOLLARS/EXCEPT SHARE DATA)  (UNAUDITED)

|                                |                                 | Common Stock |  | Additional
Paid-In
Capital |     |  |   | Repurchased
Con Edison
Stock |  |   |       | Accumulated
Other
Comprehensive
Income/(Loss) |   |      |  
|------------------------------- | ------------------------------- | ------------ |  | -------------------------- | --- |  | - | ---------------------------- |  | - | ----- | --------------------------------------------- | - | ---- | -
|
|
|
|BALANCE AS OF DECEMBER 31, 2002 |                                 | 235,488,094  |  | $                          | 589 |  | $ | 893                          |  | $ | 4,411 |                                               | $ | (962 | )
|                                | Net income                      |              |  |                            |     |  |   |                              |  |   |       | 141                                           |   |      |  
|                                | Common stock dividend to parent |              |  |                            |     |  |   |                              |  |   |       | (94                                           | ) |      |  
|                                | Cumulative preferred dividends  |              |  |                            |     |  |   |                              |  |   |       | (3                                            | ) |      |  
|                                |                                
|BALANCE AS OF MARCH 31, 2003    |                                 | 235,488,094  |  | $                          | 589 |  | $ | 893                          |  | $ | 4,455 |                                               | $ | (962 | )
|                                |                                
|BALANCE AS OF DECEMBER 31, 2003 |                                 | 235,488,094  |  | $                          | 589 |  | $ | 1,274                        |  | $ | 4,626 |                                               | $ | (962 | )
|                                | Net income                      |              |  |                            |     |  |   |                              |  |   |       | 155                                           |   |      |  
|                                | Common stock dividend to parent |              |  |                            |     |  |   |                              |  |   |       | (103                                          | ) |      |  
|                                | Cumulative preferred dividends  |              |  |                            |     |  |   |                              |  |   |       | (3                                            | ) |      |  
|                                | Other comprehensive income      |              |  |                            |     |  |   |                              |  |   |       |                                               |   |      |  
|                                |                                
|BALANCE AS OF MARCH 31, 2004    |                                 | 235,488,094  |  | $                          | 589 |  | $ | 1,274                        |  | $ | 4,675 |                                               | $ | (962 | )
|                                |                                

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

14

---





Consolidated Edison Company of New York, Inc.CONSOLIDATED STATEMENT OF CASH FLOWS(UNAUDITED)

|                                                   |                                                | For the Three Months
Ended March 31, |                                                                                                                   
|-------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------
|
|
|
|OPERATING ACTIVITIES                               |                                                |                                      |                                                                                                                   
|                                                   | Net income                                     |                                      | $                                                                                                                 
|                                                   | PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME |                                      |                                                                                                                   
|                                                   |                                                |                                      | Depreciation and amortization                                                                                     
|                                                   |                                                |                                      | Deferred income taxes                                                                                             
|                                                   |                                                |                                      | Common equity component of allowance for funds used during construction                                           
|                                                   |                                                |                                      | Prepaid pension costs (net of capitalized amounts)                                                                
|                                                   |                                                |                                      | Other non-cash charges                                                                                            
|                                                   | CHANGES IN ASSETS AND LIABILITIES              |                                      |                                                                                                                   
|                                                   |                                                |                                      | Accounts receivable - customers, less allowance for uncollectibles                                                
|                                                   |                                                |                                      | Materials and supplies, including fuel and gas in storage                                                         
|                                                   |                                                |                                      | Prepayments, other receivables and other current assets                                                           
|                                                   |                                                |                                      | Recoverable energy costs                                                                                          
|                                                   |                                                |                                      | Accounts payable                                                                                                  
|                                                   |                                                |                                      | Pensions and retiree benefits                                                                                     
|                                                   |                                                |                                      | Accrued taxes                                                                                                     
|                                                   |                                                |                                      | Accrued interest                                                                                                  
|                                                   |                                                |                                      | Deferred charges and regulatory assets                                                                            
|                                                   |                                                |                                      | Deferred credits and other regulatory liabilities                                                                 
|                                                   |                                                |                                      | Transmission congestion contracts                                                                                 
|                                                   |                                                |                                      | Other assets                                                                                                      
|                                                   |                                                |                                      | Other liabilities                                                                                                 
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES |                                                |                                      | 76                                                                                                                
|                                                   |                                               
|INVESTING ACTIVITIES                               |                                                |                                      |                                                                                                                   
|                                                   |                                                |                                      | Utility construction expenditures (excluding capitalized support cost of $8 and $9 in 2004 and 2003, respectively)
|                                                   |                                                |                                      | Cost of removal less salvage                                                                                      
|                                                   |                                                |                                      | Non-utility construction expenditures                                                                             
|                                                   |                                                |                                      | Common equity component of allowance for funds used during construction                                           
|                                                   |                                                |                                      | Demolition and remediation costs for First Avenue properties                                                      
|                                                   |                                               
|NET CASH FLOWS USED IN INVESTING ACTIVITIES        |                                                |                                      | (334                                                                                                              
|                                                   |                                               
|FINANCING ACTIVITIES                               |                                                |                                      |                                                                                                                   
|                                                   |                                                |                                      | Net proceeds from short-term debt                                                                                 
|                                                   |                                                |                                      | Retirement of long-term debt                                                                                      
|                                                   |                                                |                                      | Issuance of long-term debt                                                                                        
|                                                   |                                                |                                      | Debt issuance costs                                                                                               
|                                                   |                                                |                                      | Common stock dividend to parent                                                                                   
|                                                   |                                                |                                      | Preferred stock dividends                                                                                         
|                                                   |                                               
|NET CASH FLOWS FROM FINANCING ACTIVITIES           |                                                |                                      | 266                                                                                                               
|                                                   |                                               
|CASH AND TEMPORARY CASH INVESTMENTS:               |                                                |                                      |                                                                                                                   
|NET CHANGE FOR THE PERIOD                          |                                                |                                      | 8                                                                                                                 
|BALANCE AT BEGINNING OF PERIOD                     |                                                |                                      | 33                                                                                                                
|                                                   |                                               
|BALANCE AT END OF PERIOD                           |                                                | $                                    | 41                                                                                                                
|                                                   |                                               
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION   |                                                |                                      |                                                                                                                   
|                                                   |                                                |                                      | Cash paid during the period for:                                                                                  
|                                                   |                                                |                                      |                                                                                                                   
|                                                   |                                                |                                      |                                                                                                                   
|                                                   |                                               

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

15

---





Orange and Rockland Utilities, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                                |                                                                                                   |  
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -
|
|
|
|ASSETS                                                          |                                                                                                   |  
|UTILITY PLANT, AT ORIGINAL COST                                 |                                                                                                   |  
|                                                                | Electric                                                                                          |  
|                                                                | Gas                                                                                               |  
|                                                                | General                                                                                           |  
|                                                               
|                                                                | Total                                                                                             |  
|                                                                | Less: accumulated depreciation                                                                    |  
|                                                               
|                                                                | Net                                                                                               |  
|                                                                | Construction work in progress                                                                     |  
|                                                               
|NET PLANT                                                       |                                                                                                   |  
|                                                               
|CURRENT ASSETS                                                  |                                                                                                   |  
|                                                                | Cash and temporary cash investments                                                               |  
|                                                                | Restricted cash                                                                                   |  
|                                                                | Accounts receivable - customers, less allowance for uncollectible accounts of $2 in 2004 and 2003 |  
|                                                                | Accrued unbilled revenue                                                                          |  
|                                                                | Other receivables, less allowance for uncollectible accounts of $2 in 2004 and 2003               |  
|                                                                | Accounts receivable from affiliated companies                                                     |  
|                                                                | Gas in storage, at average cost                                                                   |  
|                                                                | Materials and supplies, at average cost                                                           |  
|                                                                | Prepayments                                                                                       |  
|                                                                | Other current assets                                                                              |  
|                                                               
|TOTAL CURRENT ASSETS                                            |                                                                                                   |  
|                                                               
|DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS       |                                                                                                   |  
|                                                                | Regulatory assets                                                                                 |  
|                                                                | Other deferred charges and noncurrent assets                                                      |  
|                                                               
|TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS |                                                                                                   |  
|                                                               
|TOTAL ASSETS                                                    |                                                                                                   | $
|                                                               

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

16

---





Orange and Rockland Utilities, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                  |                                                                            |  
|------------------------------------------------- | -------------------------------------------------------------------------- | -
|
|
|
|CAPITALIZATION AND LIABILITIES                    |                                                                            |  
|CAPITALIZATION                                    |                                                                            |  
|                                                  | Common shareholder's equity (See Statement of Common Shareholder's Equity) |  
|                                                  | Long-term debt                                                             |  
|                                                 
|TOTAL CAPITALIZATION                              |                                                                            |  
|                                                 
|NONCURRENT LIABILITIES                            |                                                                            |  
|                                                  | Provision for injuries and damages                                         |  
|                                                  | Pensions and retiree benefits                                              |  
|                                                  | Superfund and other environmental costs                                    |  
|                                                  | Hedges on variable rate long-term debt                                     |  
|                                                 
|TOTAL NONCURRENT LIABILITIES                      |                                                                            |  
|                                                 
|CURRENT LIABILITIES                               |                                                                            |  
|                                                  | Notes payable                                                              |  
|                                                  | Accounts payable                                                           |  
|                                                  | Accounts payable to affiliated companies                                   |  
|                                                  | Customer deposits                                                          |  
|                                                  | Accrued taxes                                                              |  
|                                                  | Accrued interest                                                           |  
|                                                  | Other current liabilities                                                  |  
|                                                 
|TOTAL CURRENT LIABILITIES                         |                                                                            |  
|                                                 
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                            |  
|                                                  | Deferred income taxes and investment tax credits                           |  
|                                                  | Regulatory liabilities                                                     |  
|                                                  | Other deferred credits                                                     |  
|                                                 
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                            |  
|                                                 
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                            | $
|                                                 

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

17

---





Orange and Rockland Utilities, Inc.CONSOLIDATED INCOME STATEMENT(UNAUDITED)

|                                |                                  | For the Three Months Ended March 31,
|------------------------------- | -------------------------------- | ------------------------------------
|
|
|
|OPERATING REVENUES              |                                  |                                     
|                                | Electric                         |                                     
|                                | Gas                              |                                     
|                               
|TOTAL OPERATING REVENUES        |                                  |                                     
|                               
|OPERATING EXPENSES              |                                  |                                     
|                                | Purchased power                  |                                     
|                                | Gas purchased for resale         |                                     
|                                | Other operations and maintenance |                                     
|                                | Depreciation and amortization    |                                     
|                                | Taxes, other than income taxes   |                                     
|                                | Income taxes                     |                                     
|                               
|TOTAL OPERATING EXPENSES        |                                  |                                     
|                               
|OPERATING INCOME                |                                  |                                     
|                               
|OTHER INCOME (DEDUCTIONS)       |                                  |                                     
|                                | Other income                     |                                     
|                               
|TOTAL OTHER INCOME (DEDUCTIONS) |                                  |                                     
|                               
|INCOME BEFORE INTEREST EXPENSE  |                                  |                                     
|                               
|                                | Interest on long-term debt       |                                     
|                                | Other interest                   |                                     
|                               
|NET INTEREST EXPENSE            |                                  |                                     
|                               
|NET INCOME FOR COMMON STOCK     |                                  | $                                   
|                               

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

18

---





Orange and Rockland Utilities, Inc.CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(UNAUDITED)

|                                                      |                                                                                                 | For the Three Months
Ended March 31,
|----------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------
|
|
|
|NET INCOME FOR COMMON STOCK                           |                                                                                                 | $                                   
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES       |                                                                                                 |                                     
|                                                      | Minimum pension liability adjustments, net of $(1) taxes in 2004                                |                                     
|                                                      | Unrealized gains (losses) on derivatives qualified as hedges, net of $0 taxes in 2004 and 2003. |                                     
|                                                      | Less: Reclassification adjustment for gains included in net income, net of $0 taxes in 2003     |                                     
|                                                     
|TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES |                                                                                                 |                                     
|                                                     
|COMPREHENSIVE INCOME                                  |                                                                                                 | $                                   
|                                                     

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

19

---





Orange and Rockland Utilities, Inc.CONSOLIDATED STATEMENT OF COMMON SHAREHOLDER'S EQUITYFOR THE THREE MONTHS ENDED MARCH 31, 2004
AND 2003(MILLIONS OF DOLLARS/EXCEPT SHARE DATA)  (UNAUDITED)

|                                |  | Common Stock |  |   |   |  |   | Accumulated
Other
Comprehensive
Income/(Loss) |  |   |    
|------------------------------- |  | ------------ |  | - | - |  | - | --------------------------------------------- |  | - | ---
|
|
|
|BALANCE AS OF DECEMBER 31, 2002 |  | 1,000        |  | $ |  |  | $ | 194                                           |  | $ | 169
|Net income for common stock     |  |              |  |   |   |  |   |                                               |  |   | 16 
|Common stock dividend to parent |  |              |  |   |   |  |   |                                               |  |   | (7 
|                                | 
|BALANCE AS OF MARCH 31, 2003    |  | 1,000        |  | $ |  |  | $ | 194                                           |  | $ | 178
|                                | 
|BALANCE AS OF DECEMBER 31, 2003 |  | 1,000        |  | $ |  |  | $ | 194                                           |  | $ | 186
|Net income for common stock     |  |              |  |   |   |  |   |                                               |  |   | 15 
|Common stock dividend to parent |  |              |  |   |   |  |   |                                               |  |   | (7 
|Other comprehensive loss        |  |              |  |   |   |  |   |                                               |  |   |    
|                                | 
|BALANCE AS OF MARCH 31, 2004    |  | 1,000        |  | $ |  |  | $ | 194                                           |  | $ | 194
|                                | 

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

20

---





Orange and Rockland Utilities, Inc.CONSOLIDATED STATEMENT OF CASH FLOWS(UNAUDITED)

For the Three Months
Ended March 31,2004

2003(Millions of Dollars)OPERATING ACTIVITIESNet income for common stock

$
15

$
16PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOMEDepreciation and amortization


8


9Deferred income taxes


(9
)

4Gain on non-utility property





(1
)Other non-cash charges


(3
)

(1
)CHANGES IN ASSETS AND LIABILITIESAccounts receivable - customers, less allowance for uncollectibles


(18
)

(26
)Accounts receivable from affiliated companies


(3
)

12Materials and supplies, including gas in storage


15


7Prepayments, other receivables and other current assets


3


7Recoverable energy costs


15


(13
)Accounts payable


(17
)

(3
)Accounts payable to affiliated companies


7


5Pensions and retiree benefits


9


7Accrued taxes


1


1Accrued interest


1


1Deferred charges and regulatory assets


(11
)

(2
)Deferred credits and regulatory liabilities


4


Other liabilities


14


3NET CASH FLOWS FROM OPERATING ACTIVITIES


31


26INVESTING ACTIVITIESUtility construction expenditures


(12
)

(9
)Proceeds from sale of land





2NET CASH FLOWS USED IN INVESTING ACTIVITIES


(12
)

(7
)FINANCING ACTIVITIESNet proceeds from/(retirement of) short-term debt


(15
)

33Retirement of long-term debt





(35
)Common stock dividend to parent


(7
)

(7
)NET CASH FLOWS USED IN FINANCING ACTIVITIES


(22
)

(9
)CASH AND TEMPORARY CASH INVESTMENTS:NET CHANGE FOR THE PERIOD


(3
)

10BALANCE AT BEGINNING OF PERIOD


9


2BALANCE AT END OF PERIOD

$
6

$
12SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for:Interest

$
3

$
5Income Taxes


5


2


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

21

---





NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)

General

These combined notes accompany and form an integral part of the separate interim consolidated financial statements of each of three different separate
registrants: Consolidated Edison, Inc. and its subsidiaries (Con Edison); Consolidated Edison Company of New York, Inc. and its subsidiaries (Con Edison of New York); and Orange &
Rockland Utilities, Inc. and its subsidiaries (O&R, and together with Con Edison of New York, the "Utilities"). The Utilities are subsidiaries of Con Edison and as such their financial
condition and results of operations and cash flows, which are presented separately in their interim consolidated financial statements, are also consolidated, along with those of Con Edison's
unregulated subsidiaries (discussed below), in Con Edison's interim consolidated financial statements.

Con
Edison and the Utilities are collectively referred to in these combined notes as the "Companies" and, except as otherwise noted, the information in these combined notes relates to each of the
Companies. However, neither of the Utilities makes any representation as to information relating to Con Edison or the subsidiaries of Con Edison other than itself.

The
separate interim consolidated financial statements of each of the Companies are unaudited but, in the opinion of their respective management, reflect all adjustments (which include only normally
recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. The Companies' separate interim consolidated financial statements should be read together
with their separate audited financial statements (including the combined notes thereto) included in Item 8 of their combined Annual Report on Form 10-K for the year ended
December 31, 2003 (the Form 10-K). Results for interim periods are not necessarily indicative of results for the entire fiscal year.

Con
Edison has the following unregulated subsidiaries: Consolidated Edison Solutions, Inc. (Con Edison Solutions), a retail energy services company that sells electricity to delivery customers
of utilities, including Con Edison of New York and O&R, and also offers energy-related services; Consolidated Edison Energy, Inc. (Con Edison Energy), a wholesale energy supply company;
Consolidated Edison Development, Inc. (Con Edison Development), a company that owns and operates generating plants and participates in other infrastructure projects; and Con Edison
Communications, LLC (Con Edison Communications), a company that builds and operates fiber optic networks to provide telecommunications services.

22

---



Note A - Earnings Per Common Share

Reference is made to "Earnings per Share" in Note A to the financial statements included in Item 8 of the Form 10-K. For the three
months ended March 31, 2004 and 2003, respectively, Con Edison's basic and diluted EPS are calculated as follows:

2004

2003(Millions of Dollars, except per share amounts/Shares in Millions)Net income for common stock

$
155

$
154Average number of shares outstanding - Basic


226


214Add: Incremental shares attributable to effect of potentially dilutive securities


1


1Average number of shares outstanding - Diluted


227


215EARNINGS PER COMMON SHARE - BASIC

$
0.69

$
0.72EARNINGS PER COMMON SHARE - DILUTED

$
0.68

$
0.72


Stock
options to purchase 6.9 million Con Edison common shares for the three months ended March 31, 2004 and 2003, were not included in the respective period's computation of diluted
earnings per share because the exercise price of the option was greater than the average market price of the common shares.

Note B - Stock-Based Compensation

Reference is made to "Stock-Based Compensation" in Note A to the financial statements in Item 8 of the Form 10-K. The following table
illustrates the effect on net income and earnings per share for the three months ended March 31, 2004 and 2003 if the Companies had applied fair value recognition provisions for purposes of
recognizing stock-based compensation expense:

Con Edison*

Con Edison of New York

O&R(Millions of Dollars, except per share amounts/Shares
in Millions)

2004

2003

2004

2003

2004

2003Net income for common stock, as reported

$
155

$
154

$
152

$
138

$
15

$
16Add: Stock-based compensation expense included in reported net income, net of related tax effects


1


1


1


1





Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects


2


2


2


2





Pro forma net income for common stock

$
154

$
153

$
151

$
137

$
15

$
16Average number of shares outstanding - Basic


226


214Add: Incremental shares attributable to effect of dilutive securities


1


1Average number of shares outstanding - Diluted


227


215Earnings per share:Basic - as reported

$
0.69

$
0.72Basic - pro forma

$
0.68

$
0.71Diluted - as reported

$
0.68

$
0.72Diluted - pro forma

$
0.68

$
0.71


*
Represents the consolidated financial results of Con Edison and all of its subsidiaries.

23

---



These
pro forma amounts may not be representative of future year pro forma amount disclosures due to changes in future market conditions and additional grants in future years.

Note C - Regulatory Matters

Reference is made to "Accounting Policies" in Note A and "Rate and Restructuring Agreements" in Note B to the financial statements in Item 8 of
the Form 10-K.

Regulatory
assets and liabilities at March 31, 2004 and December 31, 2003 were comprised of the following items:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Regulatory assetsFuture federal income tax

$
622

$
629

$
581

$
589

$
41

$
40Recoverable energy costs


244


264


164


176


80


88Sale of nuclear generating plant


147


159


147


159





Real estate sale costs - First Avenue properties


138


138


138


138





Deferred retirement program costs


75


77


32


33


43


44Deferred unbilled gas revenue


44


44


44


44





Deferred environmental remediation costs


166


155


120


116


46


39Workers' compensation


50


51


50


51





Deferred asbestos-related costs


39


39


38


38


1


1Divestiture - capacity replacement reconciliation


12


16


12


16





Deferred revenue taxes


36


48


35


45


1


3World Trade Center restoration costs


77


68


77


68





NYS tax law changes


23


23


23


23





Property tax reconciliation


58


41


58


41





Deferred electric interference costs


44





44








Other


124


109


115


103


9


6Total Regulatory Assets

$
1,899

$
1,861

$
1,678

$
1,640

$
221

$
221Regulatory liabilitiesAllowance for cost of removal less salvage

$
764

$
777

$
707

$
721

$
57

$
56NYISO reconciliation


138


134


138


134





Gain on divestiture


56


56


55


55


1


1Deposit from sale of First Avenue properties


50


50


50


50





Refundable energy costs


28


21








28


21Accrued electric rate reduction


33


33


32


32


1


1DC service incentive


38


38


38


38





Transmission congestion contracts


281


284


281


284





Gas rate plan - World Trade Center recovery


36


36


36


36





Electric excess earnings


49


49


49


49





Natural gas refunds


5


9


5


9





NYS tax law changes


19


18


19


18





Gas interference - cost sharing


11


10


11


10





Federal income tax refund


29


29


29


29





Gas interruptible sales credits


26


26


26


26





Steam special franchise tax


12


10


12


10





Excess dividends tax


19





19








World Trade Center straight time labor


9





9








Other


157


153


138


137


19


16Total Regulatory Liabilities

$
1,760

$
1,733

$
1,654

$
1,638

$
106

$
95


In
April 2004, Con Edison of New York filed a request with the New York State Public Service Commission (PSC) to increase charges for electric service by $550 million (6.7 percent
increase), effective April 2005. The filing with the PSC reflects a return on equity of 12 percent and an equity ratio

24

---



of
48.8 percent. The filing includes a proposal for a multi-year rate plan to continue the proposed level of charges through March 2008 provided that charges would be
adjusted, effective April 2006 and April 2007, to reflect additions to utility plant in service, property taxes, changes in pension and retiree health expense, and the impact, if any, of
reconciling certain cost elements from the prior rate year. In addition, the filing would continue the provisions pursuant to which fuel and purchased power costs are recovered from customers on a
current basis.

Note D - Environmental Matters

Superfund Sites

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of the Utilities
and their predecessors and are present at sites and in facilities and equipment they currently or previously owned, including sites at which gas was manufactured or stored.

The
Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes (Superfund) impose joint and several liability, regardless of fault, upon generators
of hazardous substances. The liability includes the costs of investigation and remediation (which includes costs of demolition, removal, disposal, storage, replacement, containment and monitoring) and
environmental damages. Liability under these laws can be material and may be imposed for contamination from past acts, even though such past acts may have been lawful at the time they occurred. The
sites at which the Utilities have been asserted to have liability under these laws, including their manufactured gas sites, are referred to herein as "Superfund Sites."

For
Superfund Sites where there are other potentially responsible parties and the Utilities are not managing the site investigation and remediation, the accrued liability represents an estimate of the
amount the Utilities will need to pay to discharge their related obligations. For Superfund Sites (including the manufactured gas sites) for which one of the Utilities is managing the investigation
and remediation, the accrued liability represents an estimate of the undiscounted cost to investigate the sites and, for sites that have been investigated in whole or in part, the cost to remediate
the sites in light of the information available, applicable remediation standards and experience with similar sites.

For
the three months ended March 31, 2004, Con Edison of New York incurred approximately $5 million for environmental remediation costs; O&R incurred no such costs. No insurance
recoveries were received.

25

---





The accrued liabilities and regulatory assets related to Superfund Sites for each of the Companies at March 31, 2004 and December 31, 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Accrued liabilities:Manufactured gas plant sites

$
149

$
145

$
103

$
106

$
46

$
39Other Superfund Sites


50


48


49


47


1


1Total

$
199

$
193

$
152

$
153

$
47

$
40Regulatory assets

$
166

$
155

$
120

$
116

$
46

$
39


Most
of the accrued Superfund Site liability relates to Superfund Sites that have been investigated, in whole or in part. As investigations progress on these and other sites, the Companies expect that
additional liability will be accrued, the amount of which is not presently determinable but may be material. The Utilities are permitted under their current rate agreements to recover or defer as
regulatory assets (for subsequent recovery through rates) site investigation and remediation costs.

Con
Edison of New York estimated in 2002 that for its manufactured gas sites, many of which have not been investigated, its aggregate undiscounted potential liability for the investigation and
remediation of coal tar and/or other manufactured gas plant-related environmental contaminants could range from approximately $65 million to $1.1 billion. O&R estimated in 2004 that for
its manufactured gas sites the aggregate undiscounted potential liability for the remediation of such contaminants could range from approximately $31 million to $87 million. These
estimates were based
on the assumption that there is contamination at each of the sites and additional assumptions regarding the extent of contamination and the type and extent of remediation that may be required. Actual
experience may be materially different.

Asbestos Proceedings

Suits have been brought in New York State and federal courts against the Utilities and many other defendants, wherein a large number of plaintiffs sought large
amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the Utilities. The suits that have been resolved, which are many,
have been resolved without any payment by the Utilities, or for amounts that were not, in the aggregate, material to them. The amounts specified in all the remaining thousands of suits total billions
of dollars but the Companies believe that these amounts are greatly exaggerated, as experienced through the disposition of previous claims. Con Edison of New York estimated in 2002 that its aggregate
undiscounted potential liability for these suits and additional such suits that may be brought over the next 50 years ranges from approximately $38 million to $162 million (with
no amount within the range considered more reasonable than any other). The estimate was based upon a combination of modeling, historical data analysis and risk factor assessment. Actual experience may
be materially different.

In
addition, certain current and former employees have claimed or are claiming workers' compensation benefits based on alleged disability from exposure to asbestos. Con Edison of New York is permitted
under its current rate agreements to defer as regulatory assets (for subsequent recovery through rates)

26

---



liabilities
incurred for its asbestos lawsuits and workers' compensation claims. O&R defers as regulatory assets (for subsequent recovery through rates), liabilities incurred for asbestos claims by
employees relating to its divested generating plants.

The
accrued liability for asbestos suits and workers' compensation proceedings (including those related to asbestos exposure) and the amounts deferred as regulatory assets for each of the Companies at
March 31, 2004 and December 31, 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Accrued liability - asbestos

$
39

$
39

$
38

$
38

$
1

$
1Regulatory assets - asbestos suits

$
39

$
39

$
38

$
38

$
1

$
1Accrued liability - workers' compensation

$
126

$
126

$
121

$
122

$
5

$
4Regulatory assets - workers' compensation

$
50

$
51

$
50

$
51

$


$



Note E - Northeast Utilities Litigation

In March 2001, Con Edison commenced an action in the United States District Court for the Southern District of New York, entitled Consolidated
Edison, Inc. v. Northeast Utilities (the First Federal Proceeding), seeking a declaratory judgment that Northeast Utilities has failed to meet certain conditions precedent to Con Edison's
obligation to complete its acquisition of Northeast Utilities pursuant to their agreement and plan of merger, dated as of October 13, 1999, as amended and restated as of January 11, 2000
(the merger agreement). In May 2001, Con Edison amended its complaint. As amended, Con Edison's complaint seeks, among other things, recovery of damages sustained by it as a result of the
material breach of the merger agreement by Northeast Utilities, the court's declaration that under the merger agreement Con Edison has no further or continuing obligations to Northeast Utilities and
that Northeast Utilities has no further or continuing rights against Con Edison.

In
June 2001, Northeast Utilities withdrew the separate action it commenced in March 2001 in the same court and filed as a counter-claim to the First Federal Proceeding its claim that
Con Edison materially breached the merger agreement and that, as a result, Northeast Utilities and its shareholders have suffered substantial damages, including the difference between the
consideration to be paid to Northeast Utilities shareholders pursuant to the merger agreement and the market value of Northeast Utilities common stock, expenditures in connection with regulatory
approvals and lost business opportunities. Pursuant to the merger agreement, Con Edison agreed to acquire Northeast Utilities for $26.00 per share (an estimated aggregate of not more than
$3.9 billion) plus $0.0034 per share for each day after August 5, 2000 through the day prior to the completion of the transaction, payable 50 percent in cash and 50 percent
in stock.

In
March 2003, the court ruled on certain motions filed by Con Edison and Northeast Utilities in the First Federal Proceeding. The court ruled that Con Edison's claim against Northeast
Utilities for hundreds of millions of dollars for breach of the merger agreement, as well as Con Edison's claim that Northeast Utilities underwent a material adverse change, will go to trial. The
court also dismissed Con

27

---



Edison's
fraud and misrepresentation claims. In addition, the court ruled that Northeast Utilities' claims on behalf of its shareholders against Con Edison for damages in excess of $1.2 billion
will go to trial.

In
May 2003, a lawsuit by a purported class of Northeast Utilities' shareholders, entitled Rimkoski, et al. v. Consolidated Edison, Inc., was filed in New York County Supreme
Court (the State Proceeding) alleging breach of the merger agreement. The complaint defines the putative class as holders of Northeast Utilities' common stock on March 5, 2001, and alleges that
the class members were intended third party beneficiaries of the merger agreement. The complaint seeks damages believed to be substantially duplicative of those sought by Northeast Utilities on behalf
of its shareholders in the First Federal Proceeding. In December 2003, the court granted Rimkoski's motion to intervene in the First Federal Proceeding and in February 2004, the State
Proceeding was dismissed without prejudice.

In
October 2003, a lawsuit by a purported class of Northeast Utilities' shareholders, entitled Siegel et al. v. Consolidated Edison, Inc., was commenced in the United States
District Court for the Southern District of New York (the Second Federal Proceeding). The putative class in the Second Federal Proceeding is the same putative class as Rimkoski seeks to represent in
the First Federal Proceeding. The amended complaint in the Second Federal Proceeding seeks unspecified injunctive relief and damages believed to be substantially duplicative of the damages sought from
Con Edison in the First Federal Proceeding. In January 2004, both Con Edison and Northeast Utilities (which has intervened in the Second Federal Proceeding) moved to dismiss the Second Federal
Proceeding. The plaintiffs in the Second Federal Proceeding have moved to consolidate that proceeding with the First Federal Proceeding or alternatively to intervene in the First Federal Proceeding.

In
January 2004, Rimkoski filed a motion in the First Federal Proceeding, which Northeast Utilities has opposed, to certify his action as a class action on behalf of all holders of Northeast
Utilities' common stock on March 5, 2001 and to appoint Rimkoski as class representative. The parties have filed motions as to whether the appropriate party to pursue most of the damages sought
from Con Edison is Northeast Utilities or the putative class of holders.

Con
Edison believes that Northeast Utilities materially breached the merger agreement, and that Con Edison did not materially breach the merger agreement. Con Edison believes it was not obligated to
acquire Northeast Utilities because Northeast Utilities did not meet the merger agreement's conditions that Northeast Utilities perform all of its obligations under the merger agreement. Those
obligations include the obligation that it carry on its businesses in the ordinary course consistent with past practice; that the representations and warranties made by it in the merger agreement were
true and correct when made and remain true and correct; and that there be no material adverse change with respect to Northeast Utilities.

Con
Edison is unable to predict whether or not any Northeast Utilities related lawsuits or other actions will have a material adverse effect on Con Edison's financial position, results of operations
or liquidity.

Note F - East 11th Street Accident

In January 2004, a woman died when she came into contact with the metal frame of a Con Edison of New York service box that had been installed in a New
York City street. The frame was energized by a

28

---



low
voltage cable that in January 2003 was repaired by the company in a manner that varied from its written procedures. Following this accident, the company tested for stray voltage all the
underground structures (transformer vaults, manholes and service boxes) on its electric distribution and transmission system. The company also tested municipally owned street light poles supplied
directly from the company's distribution system. The company has eliminated stray voltage conditions at the locations where voltage was measured. The company has committed to conduct annual stray
voltage testing of the underground structures on its electric distribution system.

In
February 2004, the PSC instituted a proceeding as to whether Con Edison of New York violated the safety requirements of the New York Public Service Law and ordered the company to show cause
why the PSC should not commence an action seeking penalties from the company. The PSC also instituted a proceeding to examine the safety of the company's electric transmission and distribution systems
and ordered the company to complete testing for stray voltage and any related repair of facilities in the company's service area.

Con
Edison of New York believes that its utility systems are safe and reliable. The company, however, is unable to predict whether or not any proceedings or other actions relating to this accident
will have a material adverse effect on its financial condition, results of operations or liquidity.

Note G - Other Material Contingencies

Lease In/Lease Out Transactions

As part of a broad initiative, the Internal Revenue Service is reviewing certain categories of transactions. Among these are transactions in which a taxpayer
leases property and then immediately subleases it back to the lessor (termed "Lease In/Lease Out," or LILO transactions). In 1997 and 1999, Con Edison's unregulated subsidiaries invested
$93 million in two LILO transactions, involving gas distribution and electric generating facilities in the Netherlands, which represented approximately 36 percent of the purchase price;
the remaining 64 percent or $166 million was furnished by third-party financing in the form of long-term debt that provides no recourse against the subsidiaries and is
primarily secured by the assets, except for guarantees of up to $10 million of the debt. Approximately half of these guarantees expired prior to December 31, 2002 and the other half will
expire at the end of May 2004. At March 31, 2004, the company's investment of $205 million in these leveraged leases net of deferred tax liabilities of $147 million
amounted to $58 million, which was included at cost on Con Edison's consolidated balance sheet. On audit, the Internal Revenue Service has proposed that the tax losses recognized in connection
with the 1997 LILO transaction be disallowed for the tax year 1997. Con Edison believes its position is correct and is currently appealing the auditors' proposal within the Internal Revenue Service.
The estimated total tax savings from the two LILO transactions during the tax years 1997 through 2003, in the aggregate, was $100 million.

Collection Agent Termination

In April 2004, Con Edison of New York terminated arrangements with a collection agent, which also processed payments for other large corporations and
governmental agencies. The New York State Banking Department has suspended the license of the collection agent. In addition, a group of the

29

---



collection
agent's unsecured creditors has commenced an involuntary bankruptcy proceeding with respect to the collection agent and the court has appointed a trustee to operate the collection agent.

The
collection agent has not forwarded to the company an estimated $24 million of payments it received from the company's customers. The company is continuing to review the matter and the
possible recovery of these payments from the collection agent, insurance or other sources.

In
April 2004, the company reflected the possible loss of these payments on its balance sheet and recorded an offsetting regulatory asset. The company expects to file a petition with the PSC in
connection with this matter shortly.

The
company offers its customers a number of ways to pay their bills, including by mail, direct payment, internet, telephone or at company customer service walk-in centers and other
collection agents.

Newington Project

Reference is made to Note T to the financial statements in Item 8 of the Form 10-K. In April 2004, the legal proceedings
referred to therein were settled by agreement of the parties. The Con Edison subsidiary paid additional project costs, the amount of which was not material to Con Edison's financial condition, results
of operations or liquidity.

Note H - Derivative Instruments and Hedging Activities

Reference is made to Note P to the financial statements in Item 8 of the Form 10-K.

Energy Price Hedging

Con Edison's subsidiaries hedge market price fluctuations associated with physical purchases and sales of electricity and natural gas by using derivative
instruments including futures, options, forwards, basis swaps, transmission congestion contracts and financial transmission rights contracts. The fair values of these hedges at March 31, 2004
and December 31, 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Fair value of net assets

$
36

$
33*

$
11

$
15

$
6

$
5


Cash
Flow Hedges

Con Edison's subsidiaries designate a portion of derivative instruments as cash flow hedges under Statement of Financial Accounting Standards (SFAS)
No. 133.

30

---



The
following table presents selected information related to these cash flow hedges included in accumulated OCI at March 31, 2004:

Maximum Term

Accumulated Other
Comprehensive Income/(Loss) Net of Tax

Portion Expected to be Reclassified to Earnings during the Next 12 Months(Term in Months/Millions of Dollars)

Con
Edison

Con Edison
of New York

O&R

Con Edison

Con Edison
of New York

O&R

Con Edison

Con Edison
of New York

O&REnergy Price Hedges

33

7

9

$
9

$


$


$
8

$


$



The
actual amounts that will be reclassified to earnings may vary from the expected amounts presented above as a result of changes in market prices. The effect of reclassification from accumulated OCI
to earnings will generally be offset by the recognition of the hedged transaction in earnings.

The
unrealized pre-tax net gains and losses relating to hedge ineffectiveness of these cash flow hedges recognized in net earnings were immaterial to the results of operations of the
Companies for the three months ended March 31, 2004 and 2003.

Other
Derivatives

The Companies enter into certain derivative instruments that do not qualify or are not designated as hedges under SFAS No. 133. However, management
believes these instruments represent economic hedges that mitigate exposure to fluctuations in commodity prices. The Utilities, with limited exceptions, recover all gains and losses on these
instruments. See "Recoverable Energy Costs" in Note A to the financial statements in Item 8 of the Form 10-K. Con Edison's unregulated subsidiaries record unrealized
gains and losses on these derivative contracts in earnings in the reporting period in which they occur. For the three months ended March 31, 2004 unrealized gains and losses on these contracts
were immaterial to the results of operations of Con Edison. For the three months ended March 31, 2003, Con Edison recorded an unrealized gain of $3 million on contracts previously
classified as energy trading.

Interest Rate Hedging

Con Edison's subsidiaries use interest rate swaps to manage interest rate exposure associated with debt. The fair values of these interest rate swaps at
March 31, 2004 and December 31, 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Fair value of interest rate swaps

$
(20
)
$
(23
)
$
5

$
1

$
(18
)
$
(17
)


Con
Edison of New York's swap (related to $225 million of tax-exempt debt) is designated as a fair value hedge, which qualifies for "short-cut" hedge accounting under
SFAS No. 133.

Con
Edison Development and O&R's swaps are designated as cash flow hedges under SFAS No. 133. See "Interest Rate Hedging" in Note P to the financial statements in Item 8 of the
Form 10-K for the contractual components of the interest rate swaps accounted for as cash flow hedges.

31

---



The
following table presents selected information related to these cash flow hedges included in the accumulated OCI at March 31, 2004:

Accumulated Other Comprehensive Income (Loss)
Net of Tax

Portion Expected to
be Reclassified to
Earnings
during the Next
12 Months(Millions of Dollars)

Con Edison

O&R

Con Edison

O&RInterest Rate Swaps

$
(15
)
$
(11
)
$
(3
)
$
(1
)


The
actual amounts that will be reclassified may vary from the expected amounts presented above as a result of changes in interest rates. Since these costs are recovered in rates the reclassification
has no impact on O&R's results of operations.

Note I - Financial Information By Business Segment

Reference is made to Note O to the financial statements in Item 8 of Form 10-K.

The
financial data for the business segments are as follows:

For the Three Months Ended March 31, 2004(Millions of Dollars)

Operating
Revenues

Intersegment
Revenues

Depreciation and
Amortization

Operating IncomeCon Edison of New YorkElectric

$
1,419

$
3

$
94

$
114Gas


553


1


18


78Steam


235


1


5


38Total Con Edison of New York

$
2,207

$
5

$
117

$
230O&RElectric

$
120

$


$
6

$
9Gas


93





2


10Total O&R

$
213

$


$
8

$
19Unregulated subsidiaries

$
266




$
11

$
4Other


(1
)

(5
)

1


2Total Con Edison

$
2,685

$


$
137

$
255


32

---



For the Three Months Ended March 31, 2003(Millions of Dollars)

Operating
Revenues

Intersegment
Revenues

Depreciation and
Amortization

Operating IncomeCon Edison of New YorkElectric

$
1,379

$
3

$
90

$
100Gas


533


1


18


84Steam


238





5


45Total Con Edison of New York

$
2,150

$
4

$
113

$
229O&RElectric

$
114

$


$
7

$
11Gas


87





2


10Total O&R

$
201

$


$
9

$
21Unregulated subsidiaries

$
219

$


$
7

$
7Other





(4
)




Total Con Edison

$
2,570

$


$
129

$
257


Note J - Guarantees

Con Edison and its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of their subsidiaries. In
addition, a Con Edison Development subsidiary has issued guarantees on behalf of entities in which it has an equity interest. Con
Edison's guarantees had maximum limits totaling $1 billion at March 31, 2004 of which $283 million were outstanding.

The
following table summarizes, by type and term, the total maximum amount of guarantees:

Maximum AmountGuarantee Type

0-3 years

4-10 years

> 10 years

Total(Millions of Dollars)Commodity transactions

$
716

$
35

$
162

$
913Affordable housing program





49





49Intra-company guarantees


5





47


52Other guarantees


28


10


16


54TOTAL

$
749

$
94

$
225

$
1,068


For
a description of guarantee types, see Note S to the financial statements in Item 8 of the Form 10-K.

Note K - Related Party Transactions

Reference is made to Notes A and U to the financial statements in Item 8 of the Form 10-K.

33

---



The
cost of administrative and other services provided by Con Edison of New York and O&R to, and received from, Con Edison and its subsidiaries for the three months ended March 31, 2004 and
2003 was as follows:

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003Cost of Services Provided

$
12

$
8

$
3

$
3Cost of Services Received

$
8

$
6

$
5

$
4


In
addition, O&R purchased from Con Edison of New York $29 million and $52 million of natural gas for the three months ended March 31, 2004 and 2003, respectively. O&R purchased
from Con Edison of New York $1 million of electricity for the three months ended March 31, 2003. O&R also purchased from Con Edison Energy $4 million of electricity for its New
Jersey regulated subsidiary, for the three months ended March 31, 2004, pursuant to a statewide energy auction.

In
December 2003, the FERC authorized Con Edison of New York to lend funds to O&R, for periods of not more than 12 months, in amounts not to exceed $150 million outstanding at any
time, at prevailing market rates. O&R has not borrowed any funds from Con Edison of New York.

Note L - Pension Benefits

Reference is made to Note E to the financial statements in Item 8 of the Form 10-K.

Net Periodic Benefit Cost

The components of the Companies' net periodic benefit costs for the three months ended March 31, 2004 and 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Service cost - including administrative expenses

$
27

$
19

$
25

$
17

$
2

$
2Interest cost on projected benefit obligation


103


75


96


68


7


7Expected return on plan assets


(163
)

(116
)

(157
)

(110
)

(6
)

(6
)Amortization of net actuarial (gain)/loss


(10
)

(16
)

(13
)

(18
)

3


2Amortization of prior service costs


3


2


3


2





NET PERIODIC BENEFIT COST

$
(40
)
$
(36
)
$
(46
)
$
(41
)
$
6

$
5Amortization of regulatory asset*


1


1


1


1





TOTAL PERIODIC BENEFIT COST

$
(39
)
$
(35
)
$
(45
)
$
(40
)
$
6

$
5Less: Cost capitalized/deferred


(10
)

(6
)

(11
)

(10
)

1


4Cost charged to operating expenses

$
(29
)
$
(29
)
$
(34
)
$
(30
)
$
5

$
1


Expected Contributions

Con Edison is not required under funding regulations and laws to make any contributions to the pension plan during 2004. O&R and Con Edison's unregulated
subsidiaries expect to make discretionary

34

---



contributions
of $22 million and $2 million, respectively, in 2004. As of March 31, 2004, Con Edison's unregulated subsidiaries have made contributions of $2 million.

Note M - Other Postretirement Benefits

Reference is made to Note F to the financial statements in Item 8 of the Form 10-K.

Net Periodic Benefit Cost

The components of the Utilities' net periodic postretirement benefit costs for the three months ended March 31, 2004 and 2003 were as follows:

Con Edison

Con Edison of New York

O&R(Millions of Dollars)

2004

2003

2004

2003

2004

2003Service cost

$
3

$
2

$
2

$
1

$
1

$
1Interest cost on accumulated postretirement benefit obligation


21


8


19


6


2


2Expected return on plan assets


(20
)

(7
)

(19
)

(6
)

(1
)

(1
)Amortization of net actuarial loss


13


4


12


3


1


1Amortization of prior service costs


(3
)

(1
)

(3
)

(1
)




Amortization of transition obligation


1





1








NET PERIODIC POSTRETIREMENT BENEFIT COST

$
15

$
6

$
12

$
3

$
3

$
3Less: Cost capitalized/deferred


4


3


3


1


1


2Cost charged to operating expenses

$
11

$
3

$
9

$
2

$
2

$
1


Expected Contributions

Con Edison of New York and O&R expect to contribute $27 million and $8 million, respectively, to other postretirement benefit plans in 2004. As of
March 31, 2004, no contributions have been made.

Note N - Consolidation of Variable Interest Entities

In December 2003, the Financial Accounting Standards Board (FASB) issued a revised Interpretation No. 46, "Consolidation of Variable Interest
Entities" (FIN 46R), which addresses the consolidation of variable interest entities (VIEs) by business enterprises that are the primary beneficiaries of such entities (see Note T to the
financial statements in Item 8 of the Form 10-K). A VIE is an entity that does not have sufficient equity investment at risk to permit it to finance its activities
without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling interest. The primary beneficiary is the party that absorbs a majority of the
entity's expected losses, receives a majority of its expected residual returns, or both. FIN 46R is effective for the first interim or fiscal period ending after March 15, 2004 except
for special purpose entities which was effective December 31, 2003.

As
discussed in Note I to the financial statements in Item 8 of Form 10-K, Con Edison of New York and O&R have long-term contracts with
non-utility generators (NUGs) for electric generating capacity. Assuming performance by the NUGs, the Utilities are obligated over the terms of the contracts (which extend for various
periods, up to 2036) to make capacity and other fixed payments, as well as variable payments for energy costs.

The
Companies have reviewed all ten of their long-term contracts with NUGs and determined that they are not required to consolidate these entities under FIN 46R. Of these contracts,
it has been determined

35

---



that
four entities are not VIEs under the guidelines of the standard and, therefore not subject to consolidation. The remaining six contracts are discussed below.

Under
FIN 46R specific disclosures must be made in situations where a company is unable to obtain sufficient information to apply the Interpretation. Con Edison and Con Edison of New York did
not apply FIN 46R to six VIE's because, after a number of requests, the information necessary to determine whether Con Edison of New York is the primary beneficiary of the respective entities
was not made available to us. The first entity, Selkirk Unit 2, which is owned by Selkirk Cogen Partners, L.P., is a 345 MW cogeneration facility that provides Con Edison of New
York with 265 MW of electricity under a 20-year purchase power agreement (PPA) which began in September 1994. The second entity, Brooklyn Navy Yard, which is owned by
Brooklyn Navy Yard Cogeneration Partners, L.P., is a 325 MW generating facility that provides Con Edison of New York with 286 MW of electricity under a 40-year PPA
which began in November 1996. The third entity, Linden Cogeneration, owned by East Coast Power, L.L.C., is a 755 MW generating facility that provides Con Edison of New York with
645 MW of electricity under a 25-year PPA which began in May 1992. The fourth entity, Indeck Corinth, owned by Indeck Energy Services of Corinth, Inc., is a
140 MW generating facility from which Con Edison of New York purchases 128 MW of electricity under a 20-year PPA which began in July 1995. The fifth entity,
Independence, owned by Sithe/Independence Partners, L.P., is a 1,000 MW generating facility from which Con Edison of New York purchases 740 MW of capacity under a
20-year PPA which began in November 1994. The sixth entity, Astoria Energy, owned by Astoria Energy L.L.C., will develop, own, and operate a new 552 MW generating
facility, from which Con Edison of New York will purchase up to 500 MW of electric capacity and energy under a 10-year PPA beginning on or about May 2006.

The
following is a summary of the revenues provided to the six NUGs as described above:

Twelve Months Ended December 31,

Three Months Ended
March 31,(Millions of Dollars)

2003

2002

2001

2004

2003Selkirk Unit 2

$
170

$
144

$
151

$
44

$
46Brooklyn Navy Yard


129


102


109


32


36Linden Cogeneration


452


345


365


116


127Indeck Corinth


91


82


80


27


25Independence


127


125


124


32


32Astoria Energy

















Con
Edison of New York currently recovers the costs associated with its NUG contracts pursuant to its current electric rate agreement. See "Recoverable Energy Costs" in Note A to the financial
statements in Item 8 of the Form 10-K. If capacity and energy are not delivered under the PPAs, Con Edison of New York may be required to purchase power on the open market. However, the
company expects that it would be allowed to recover any such replacement costs.

Con
Edison Development, a wholly owned subsidiary of Con Edison, owns 80% of Lakewood Cogeneration, LLP (the Partnership), which owns and operates a 236 MW facility located in Lakewood, New

36

---



Jersey.
The facility generates electric power for sale under a 20-year PPA with Jersey Central Power & Light that began on November 8, 1996. The Partnership is the primary
beneficiary of the Lakewood facility and, therefore, is not required to deconsolidate Lakewood under FIN 46R.

Note O - Lower Manhattan Restoration

Con Edison of New York estimates that it will incur $430 million of costs for emergency response to the September 11, 2001 attack on the World
Trade Center, and for resulting temporary and subsequent permanent restoration of electric, gas and steam transmission and distribution facilities damaged in the attack. Most of the costs are expected
to be capital in nature. In December 2001, the company filed a petition with the PSC for authorization to defer the costs. The company estimates that $90 million of the costs will be
covered by insurance. It expects the PSC to permit recovery from customers of the costs, net of any federal reimbursement, insurance payments and tax savings. In August 2002, Congress
appropriated funds for which the company is eligible to apply to recover costs it incurred in connection with the attack. In accordance with the procedural guidelines for disbursement of the federal
funds, the company submitted its initial application for funds in October 2003 and received the first installment of $29 million on October 31, 2003. The company will submit
additional applications when appropriate. At March 31, 2004, the company had capitalized $206 million of such costs as utility plant and deferred $77 million, including interest,
as a regulatory asset.

In
addition, based upon New York City's announced plans for improvement projects in lower Manhattan, including a transportation hub, the company anticipates that over the next five to ten
years it may incur up to $250 million in incremental costs in lower Manhattan. The company expects that it would recover any such costs from customers through the utility ratemaking process.

Note P - New Financial Accounting Standards

In January 2004, the FASB issued FASB Staff Position (FSP) No. FAS 106-1, "Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of 2003." The FSP gives plan sponsors an option to defer recognizing the effects of the Act in the accounting for its plan under FASB
Statement No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and in providing disclosures required by FASB Statement No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits," until authoritative guidance is issued, or until certain other events (such as plan amendments) occur. The Companies elected not to defer the recognition
of the Act. See Note F to the financial statements in Item 8 of the Form 10-K.

In
March 2004, the Emerging Issues Task Force (EITF) reached a consensus regarding disclosures about unrealized losses on available-for-sale debt and equity securities
accounted for under FASB Statements No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and No. 124, "Accounting for Certain Investments Held by
Not-for-Profit Organizations." The guidance for evaluating whether an investment is other than temporarily impaired should be applied to evaluations made in reporting periods
beginning after June 15, 2004. Additional disclosures for cost method investments are effective in annual financial statements for fiscal years ending after June 15, 2004. The Companies
do not expect adoption of this EITF consensus to have a material impact on their financial position, results of operation or liquidity.

37

---





ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON, CON EDISON OF NEW  YORK AND O&R)

This
combined management's discussion and analysis of financial condition and results of operations (MD&A) relates to the separate consolidated financial statements in Part I,
Item 1 of this report (the First Quarter Financial Statements) of three separate registrants: Consolidated Edison, Inc. (Con Edison), Consolidated Edison Company of New York, Inc.
(Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R, and together with Con Edison of New York, the "Utilities"). The Utilities are subsidiaries of Con Edison and as such
information in this MD&A about each of the Utilities also applies to Con Edison.

Con
Edison and the Utilities are collectively referred to in this MD&A as the "Companies." However, neither Con Edison of New York nor O&R makes any representation as to information in this report
relating to Con Edison or the subsidiaries of Con Edison other than itself.

This
MD&A should be read in conjunction with the First Quarter Financial Statements and the notes thereto and the MD&A in Item 7 of the Companies' combined Annual Report on
Form 10-K for the year ended December 31, 2003 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K).

Information
in the notes to the First Quarter Financial Statements that is referred to in this MD&A is hereby incorporated by reference herein. The use of terms such as "see" or "refer to" shall be
deemed to incorporate by reference into this MD&A the information to which reference is made.

CORPORATE OVERVIEW

Con Edison's principal business operations are those of the Utilities. Con Edison also has unregulated subsidiaries that compete in energy-related and
telecommunications industries.

Certain
financial data of Con Edison's subsidiaries is presented below:

Three months ended March 31, 2004

At March 31,
2004(Millions of Dollars)

Operating
Revenues

Net Income

AssetsCon Edison of New York

$
2,207

82
%
$
152

98
%
$
18,285

85
%O&R


213

8
%

15

10
%

1,279

6
%Total Utilities


2,420

90
%

167

108
%

19,564

91
%Con Edison Communications


7


%

(3
)
(2
)%

41


%Con Edison Development


108

4
%

(5
)
(3
)%

1,318

6
%Con Edison Energy


13

1
%

1


%

140

1
%Con Edison Solutions


141

5
%




%

116


%Othera


(4
)

%

(5
)
(3
)%

334

2
%Total Con Edison

$
2,685

100
%
$
155

100
%
$
21,513

100
%


Con Edison's net income for common stock for the three months ended March 31, 2004 was $155 million or $0.69 a share compared with earnings of
$154 million or $0.72 a share for the three months ended March 31, 2003. See "Results of Operations - Summary," below. For additional segment financial information, see
Note I to the First Quarter Financial Statements and "Results of Operations," below.

38

---



REGULATED UTILITY SUBSIDIARIES

Con Edison of New York provides electric service to over 3.1 million customers and gas service to 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 subsidiaries, provides electric service to over 285,000 customers in
southeastern New York and adjacent sections of New Jersey and northeastern Pennsylvania and gas service to over 120,000 customers in southeastern New York and northeastern Pennsylvania.

The
Utilities are primarily "wires and pipes" energy delivery companies that are subject to extensive federal and state regulation. Pursuant to restructuring agreements, the Utilities have sold most
of their electric generating capacity and provide their customers the opportunity to buy electricity and gas directly from other suppliers through the Utilities' retail access programs. The Utilities
supply more than half of the energy delivered by them in their service areas and provide delivery service to their customers that buy energy from other suppliers. The Utilities purchase substantially
all of the energy they supply to customers pursuant to firm contracts or through wholesale energy markets. In general, the Utilities recover on a current basis the fuel and purchased power costs they
incur in supplying energy to their full-service customers, pursuant to approved rate plans.

Con
Edison anticipates that the Utilities will 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.

Demand
for utility service is affected by weather, economic conditions and other factors. The Utilities have experienced increased customer demand in recent years. In June, July and August of 2002,
both Con Edison of New York and O&R set new three-month electric delivery records of more than 17 million and 1.7 million megawatt hours, respectively. In June 2003, Con Edison of
New York and O&R each experienced a new record electric peak load for that month. The June peak was an all-time peak electric load for O&R. In January 2004, Con Edison of New York
and O&R each experienced a new winter electric peak load.

Because
the energy delivery infrastructure must be adequate to meet demand in peak periods with a high level of reliability, the Utilities' capital investment plans reflect in great part actual growth
in electric peak load adjusted to summer design weather conditions, as well as forecasted growth in peak loads. On this basis, Con Edison of New York's weather-adjusted peak load in the summer of 2003
was 12,600 MW, 1.6 percent higher than the adjusted peak load in 2002. The company estimates that, under design weather conditions, the 2004 service area peak load will be 12,825 MW. The
forecasted average annual growth rate of the electric peak load over the next five years is 1.5 percent. The company anticipates an ongoing need for substantial capital investment in order to
meet this load growth with the exceptionally high level of reliability that it currently provides (see "Capital Requirements," below).

39

---



The
Utilities have rate plans approved by state utility regulators that cover the rates they can charge their customers. Con Edison of New York has an electric rate agreement (approved in
November 2000) that ends in March 2005 and gas and steam rate agreements (approved in April 2002 and December 2000, respectively) that end in September 2004. O&R has
rate plans for its electric and gas services in New York that extend through October 2006. Charges to customers, pursuant to the rate plans, may not be changed during the respective terms of
the rate plans other than for recovery of energy costs and limited other exceptions. The rate plans require the Utilities to share with customers earnings in excess of specified rates of return on
equity. Changes in energy sales and delivery volumes are reflected in operating income (except to the extent that weather-normalization provisions apply to the gas businesses). Con Edison of New
York's electric and steam rate plans do not reflect all of the increased construction expenditures and related costs incurred and expected to be incurred to meet increasing customer demand and
reliability needs that have been experienced since the date of those plans (see "Capital Requirements," below). The company filed petitions in November 2003 to increase rates for gas and steam
service effective October 2004 and in
April 2004 to increase rates for electric service effective April 2005. See "Regulatory Matters," below and "Recoverable Energy Costs" and "Rate and Restructuring Agreements" in Notes A
and B, respectively, to the financial statements in Item 8 of the Form 10-K.

Accounting
rules and regulations for public utilities include Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation," pursuant to
which the economic effects of rate regulation are reflected in financial statements. See "Application of Critical Accounting Policies," below.

The
respective collective bargaining agreements covering about two-thirds of each of the Utilities' employees expire June 2004.

UNREGULATED BUSINESSES

Con Edison's unregulated subsidiaries participate in competitive businesses and are subject to different risks than the Utilities. The company recognized
impairment charges for its unregulated telecommunications and generation businesses in the fourth quarter of 2003. See Note H to the financial statements in Item 8 of the
Form 10-K. At March 31, 2004, Con Edison's investment in its unregulated subsidiaries was $701 million and the unregulated subsidiaries' total assets amounted to
$1.6 billion.

Consolidated
Edison Solutions, Inc. (Con Edison Solutions) sells electricity to delivery customers of Con Edison of New York, O&R and other utilities and also offers energy-related services. As
of March 31, 2004, the company served approximately 29,000 electric customers with an estimated aggregate peak load of 1,500 MW.

Consolidated
Edison Development, Inc. (Con Edison Development) owns and operates generating plants and participates in other infrastructure projects. At March 31, 2004, the company owned
interests of 1,668 MW of capacity in electric generating facilities of which 244 MW are sold under long-term purchase power agreements and the balance is sold on the wholesale electricity
markets.

40

---



Consolidated
Edison Energy, Inc. (Con Edison Energy) provides energy and capacity to Con Edison Solutions and others and markets the output of plants owned or operated by Con Edison
Development. The company also provides risk management services to Con Edison Solutions and Con Edison Development and offers these services to others.

Con
Edison Communications, LLC (Con Edison Communications) builds and operates fiber optic networks to provide telecommunications services. The company's properties (the capitalized cost of which at
March 31, 2004 amounted to $41 million) include network facilities and over 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.

RESULTS OF OPERATIONS - SUMMARY

Con Edison's earnings per share for the three months ended March 31, 2004 were $0.69 ($0.68 on a diluted basis) as compared to $0.72 ($0.72 on a diluted
basis) for the 2003 period.

Earnings
for the three months ended March 31, 2004 and 2003 were as follows:

2004

2003(Millions of Dollars)Con Edison of New York

$
152

$
138O&R


15


16Con Edison Communications


(3
)

(6
)Con Edison Development


(5
)

(1
)Con Edison Energy


1


Con Edison Solutions





6Othera


(5
)

1CON EDISON

$
155

$
154


Con Edison's earnings for the three months ended March 31, 2004 were $1 million higher than the 2003 period, reflecting the following major
factors (after tax, in millions):

Con Edison of New York:Impact of weather in 2004 on net revenues versus 2003 (estimated)

$
(4
)Sales growth, normalized for weather (estimated)


6Lower operations and maintenance expense, principally corporate


3Regulatory accounting


10Reduced net credit for pensions & other postretirement benefits


(2
)Higher depreciation and property tax expense


(7
)Allowance for equity funds used during construction and other items


8Total Con Edison of New York


14O&R


(1
)Unregulated subsidiaries including parent company


(12
)Total

$
1


41

---



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

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The Companies' financial statements reflect the application of their accounting policies, which conform to accounting principles generally accepted in the
United States of America. The Companies' critical accounting policies include industry-specific accounting applicable to regulated public utilities and accounting for pensions and other postretirement
benefits, contingencies, long-lived assets, derivative instruments, goodwill and leases. See "Application of Critical Accounting Policies" in Item 7 of the
Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

The Companies' liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statements of cash
flows included in Part I, Item 1 of this report and as discussed below. See "Liquidity and Capital Resources" in Item 7 of the Form 10-K. Changes in the
Companies' cash and temporary cash investments resulting from operating, investing and financing activities for the three months ended March 31, 2004 and 2003 are summarized as follows:

Con Edison

Con Edison of
New York

O&R(Millions of Dollars)

2004

2003

Variance

2004

2003

Variance

2004

2003

VarianceOperating activities

$
152

$
(58
)
$
210

$
76

$
(115
)
$
191

$
31

$
26

$
5Investing activities


(369
)

(332
)

(37
)

(334
)

(274
)

(60
)

(12
)

(7
)

(5
)Financing activities


223


334


(111
)

266


335


(69
)

(22
)

(9
)

(13
)Net change

$
6

$
(56
)
$
62

$
8

$
(54
)
$
62

$
(3
)
$
10

$
(13
)Balance at beginning of period


49


118


(69
)

33


88


(55
)

9


2


7Balance at end of period

$
55

$
62

$
(7
)
$
41

$
34

$
7

$
6

$
12

$
(6
)


Cash
Flows from Operating Activities

Cash flows from operating activities for the three months ended March 31, 2004, as compared with the 2003 period, for the Companies reflect their net
income (see "Results of Operations," below) and for Con Edison and Con Edison of New York reflect their higher deferred income tax expense, partially offset by increased other receivables. The
variation in other receivables is due primarily to a current federal income tax benefit in the 2004 period.

For
the Utilities, cash flows from operating activities for the 2004 period, as compared to the 2003 period, also reflect decreased customer accounts receivable, recoverable energy cost and accounts
payable balances. The decreases for Con Edison of New York reflect lower sales and delivery volumes, and fuel, purchased power and gas purchased for resale costs from the milder weather in the period
ended March 2004 than in March 2003. The decreases for O&R reflect lower gas sales and gas purchased for resale costs in the period ended March 2004 than in March 2003.

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 weather and economic conditions. The prices at which the Utilities provide energy to their customers are determined in accordance with rate plans approved by
the state public utility

42

---



regulatory
authority having jurisdiction. See "Regulatory Matters," below. 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 the rate plans. See "Recoverable Energy Costs" in Note A to the financial statements in Item 8 of the
Form 10-K.

Net
income for common stock 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 taxes. For Con Edison of New York, principal non-cash credits include prepaid pension costs. Pension credits result from past
favorable performance in Con Edison of New York's pension fund and assumptions about future performance. See "Application of Critical Accounting PoliciesAccounting for Pensions and Other
Postretirement Benefits" in Item 7 of the Form 10-K and Notes E and F to the financial statements in Item 8 of the Form 10-K.

Cash
Flows Used in Investing Activities

Cash flows used in investing activities of each of the Companies for the three months ended March 31, 2004, as compared with the 2003 period reflect
increased Utility construction expenditures and, for Con Edison, also reflect decreased construction expenditures by its unregulated subsidiaries.

Cash
Flows from/(used in) Financing Activities

Cash flows from financing activities of each of the Companies for the three months ended March 31, 2004 as compared with the 2003 period reflect
decreased commercial paper issuance (shown on the consolidated balance sheets in Part I, Item 1 of this report as "Notes payable") and for Con Edison and Con Edison of New York also
reflect significant refinancing of long-term debt.

Commercial
paper outstanding at March 31, 2004 for Con Edison (on a consolidated basis) and Con Edison of New York was $394 million and $370 million, respectively, which had a
weighted average annualized yield of 1.08 percent. O&R had no commercial paper outstanding.

In
January 2004, Con Edison of New York issued $245 million of its variable rate, tax-exempt Facilities Revenue Bonds, Series 2004A and B, the proceeds of which were
used to redeem in advance of maturity its fixed rate, tax-exempt Facilities Revenue Bonds, Series 1993A, B and C. In January 2003, Con Edison of New York redeemed
$275 million 7.75 percent 35-year Series 1996A, Subordinated Deferrable Interest Debentures using cash held for that purpose at December 31, 2002.

In
February 2004, Con Edison of New York issued $200 million of 4.7 percent 10-year Series 2004A Debentures and $200 million of 5.7 percent
30-year Series 2004B Debentures, the proceeds of which were used to redeem in advance of maturity the company's $150 million 7.125 percent Series 1994A
Debentures and for general corporate purposes.

In
March 2004, Con Edison of New York redeemed at maturity its $150 million of 7.625 percent 12-year Series 1992B Debentures. In March 2003, O&R redeemed
at maturity its $35 million 6.56 percent 10-year Series 1993D Debentures using proceeds from the issuance of commercial paper.

43

---



Cash
flows from financing activities for Con Edison in both the 2004 and 2003 periods also reflect the issuance of common shares through its dividend reinvestment and employee stock plans (2004:
955,259 shares for $25 million; 2003: 510,447 shares for $13 million)

Changes
in Assets and Liabilities

The following table shows significant changes in assets and liabilities at March 31, 2004, compared with December 31, 2003, that have impacted the
Companies' consolidated statements of cash flows, other than those discussed above. The changes in these balances are utilized to reconcile net income to cash flow from operations.

(Millions of Dollars)

Con Edison
2004 vs. 2003
Variance

Con Edison of New York
2004 vs. 2003
Variance

O&R
2004 vs. 2003
VarianceOther receivables - less allowance for uncollectible accounts

$
84

$
65

$
Gas in storage


(78
)

(58
)

(15
)Prepayments


184


183


2Deferred income taxes and investment tax credits


145


143


(8
)


Other receivables, less allowance for uncollectible accounts for Con Edison and Con Edison of New York, increased at March 31, 2004 as compared with
year-end 2003 due primarily to a current federal income tax benefit.

Gas
in storage decreased for the Companies at March 31, 2004 as compared with year-end 2003 due primarily to lower volumes in inventory.

Prepayments
for Con Edison of New York increased at March 31, 2004 as compared with year-end 2003 due primarily to the unamortized portion of property taxes paid in
January 2004. Property taxes are generally prepaid in January and July of each year and amortized to expense over a six-month period.

Deferred
income taxes and investment tax credits increased for Con Edison of New York at March 31, 2004 as compared with year-end 2003 due primarily to differences between the book
and the tax-deductible amounts for New York City prepaid property tax and depreciation costs.

Capital
Resources

At March 31, 2004, there was no material change in the Companies' capital resources compared to those disclosed under "Capital Resources" in
Item 7 of the Form 10-K, other than as described below.

The
Companies are continuing a review of their financing plans, which may include an issuance of Con Edison common stock. The review, which may be completed in the near term, involves consideration of
various factors, including the Con Edison of New York electric rate proceeding initiated in April 2004, the gas and steam rate proceedings initiated in November 2003 and capital expenditures of
more than a $1 billion a year that Con Edison of New York expects to continue to make for the next few years. See Note C to the First Quarter Financial Statements and "Capital
Requirements," below. Con Edison has registered $925 million of securities, including debt, preferred stock and common stock, for sale under the Securities Act of 1933 pursuant to "shelf"
Registration Statements on Form S-3. Con Edison of New York and O&R have registered $825 million and $200 million, respectively, of their debt securities.

44

---



For each of the Companies, the ratio of earnings to fixed charges (Securities and Exchange Commission basis) for the three months ended March 31, 2004 and the twelve months ended
December 31, 2003 was:

|                       |  | Earnings to Fixed Charges
|---------------------- |  | -------------------------
|
|
|Con Edison             |  | 3.0                      
|Con Edison of New York |  | 3.6                      
|O&R                    |  | 5.8                      
|                      

For each of the Companies, the common equity ratio at March 31, 2004 and December 31, 2003 was:

|                       |  | Common Equity Ratio
|---------------------- |  | -------------------
|
|
|Con Edison             |  | 47.4               
|Con Edison of New York |  | 48.4               
|O&R                    |  | 55.5               
|                      

The commercial paper of the Companies is rated P-1, A-1 and F1, respectively, by Moody's Investor Service, Inc. (Moody's),
Standard & Poor's Rating Services (S&P) and Fitch Ratings (Fitch). Con Edison's unsecured debt is rated A2, A- and A-, respectively, by Moody's, S&P and Fitch. The
unsecured debt of the Utilities is rated A1, A and A+, respectively, by Moody's, S&P and Fitch. A securities rating is subject to revision or withdrawal at any time by the assigning rating
organization.

Capital
Requirements

At March 31, 2004, there was no material change in the Companies' capital requirements compared to those discussed under "Capital Requirements" in Item 7
of the Form 10-K, other than the increase in Con Edison of New York's estimated utility construction expenditures to $1,150 million from $1,060 million in 2004 and to
$1,411 million from $1,362 million in 2005.

Contractual
Obligations

At March 31, 2004, there was no material change in the Companies' contractual obligations compared to those discussed under "Contractual Obligations" in
Item 7 of the Form 10-K, other than changes in long-term debt (described above) and Con Edison of New York's non-utility generator contracts, natural

45

---



gas
pipeline and storage contracts and unregulated subsidiary commodity and service agreements (described below).

|(Millions of Dollars)                                          |                         | Payments Due by Period
|-------------------------------------------------------------- | ----------------------- | ----------------------
|
|
|Non-utility generator contracts                                |                         |                       
|                                                              
|                                                               | Con Edison of New York* |                       
|                                                              
|Natural gas supply, transportation and storage contracts       |                         |                       
|                                                              
|                                                               | Con Edison of New York  |                       
|                                                               | O&R                     |                       
|                                                              
|Total natural gas supply, transportation and storage contracts |                         | $                     
|                                                              
|Unregulated subsidiary commodity and service agreements        |                         | $                     
|                                                              

ELECTRIC POWER REQUIREMENTS

At March 31, 2004, there was no material change in the Companies' electric power requirements compared to those disclosed under "Electric Power
Requirements" in Item 7 of the Form 10-K.

REGULATORY MATTERS

At March 31, 2004, there was no material change in the Companies' regulatory matters compared to those disclosed under "Regulatory Matters" in Item 7 of
the Form 10-K and in "Rate and Restructuring Agreements" in Note B to the financial statements in Item 8 of the Form 10-K, other than as described in
Note C.

FINANCIAL AND COMMODITY MARKET RISKS

The Companies are subject to various risks and uncertainties associated with financial and commodity markets. The most significant market risks include interest
rate risk, commodity price risk, credit risk and investment risk. At March 31, 2004, there were no material changes to the risks
discussed under "Financial and Commodity Market Risks" in Item 7 of the Form 10-K other than with respect to credit risk.

Credit
Risk

Con Edison's unregulated energy subsidiaries had $117 million of credit exposure, net of collateral and reserves, at March 31, 2004, of which
$100 million was with investment grade counterparties and $17 million was with the New York Mercantile Exchange or independent system operators.

Material
Contingencies

For information concerning potential liabilities arising from the Companies' material contingencies, see the notes to the First Quarter Financial Statements.

46

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RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2003

The Companies' results of operations (which were summarized above under "Results of Operations -Summary") for the three months ended March 31,
2004 compared with the three months ended March 31, 2003 were:

Con Edison*

Con Edison of New York

O&R(Millions of Dollars)

Increases
(Decreases)
Amount

Increases
(Decreases)
Percent

Increases
(Decreases)
Amount

Increases
(Decreases)
Percent

Increases
(Decreases)
Amount

Increases
(Decreases)
PercentOperating revenues

$
115

4.5
%
$
57

2.7
%
$
12

6.0
%Purchased power


66

7.6


3

0.4


6

10.7Fuel







10

7.9




Gas purchased for resale


37

10.2


27

9.0


3

5.4Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)


12

1.0


17

1.7


3

3.4Other operations and maintenance


1

0.3


(1
)
(0.3
)

7

20.6Depreciation and amortization


8

6.2


4

3.5


(1
)
(11.1
)Taxes, other than income tax


(2
)
(0.7
)






(1
)
(7.1
)Income tax


7

7.1


13

14.6




Operating income


(2
)
(0.8
)

1

0.4


(2
)
(9.5
)Other income less deductions and related federal income tax


11

LARGE


10

LARGE




Net interest charges


8

7.5


(3
)
(3.2
)

(1
)
(16.7
)Preferred stock dividend requirements














Net income for common stock

$
1

0.6
%
$
14

10.1
%
$
(1
)
(6.3
)%


* Represents the consolidated financial results of Con Edison and all of its subsidiaries.

A discussion of the results of operations by principal business segment follows. For additional business segment financial information, see Note I to the
financial statements.

The
results reflect the application of the Companies' accounting policies and rate plans that cover the rates the Utilities can charge their customers. In general, the Utilities recover on a current
basis the fuel and purchased power costs they incur in supplying energy to their full-service customers. See "Recoverable Energy Costs" in Note A and "Regulatory Matters" in
Note B to the financial statements in Item 8 of the Form 10-K.

CON EDISON OF NEW YORK

Electric

Con Edison of New York's electric operating revenues increased $40 million in the three months ended March 31, 2004 compared with the 2003 period,
due primarily to higher recoverable fuel costs in the 2004 period of $9 million, a provision made in 2003, but not in 2004, for a refund to customers of electric earnings in excess of a
targeted return ($15 million) and an increase in electric sales and delivery volumes.

47

---



Con
Edison of New York's electric sales and deliveries, excluding off-system sales, for the first quarter of 2004 compared with the first quarter of 2003 were:

MILLIONS OF KWHS

Three Months EndedDescription

March 31, 2004

March 31, 2003

Variation

Percent
VariationResidential/Religious

3,042

2,965

77

2.6
%Commercial/Industrial

4,264

4,495

(231
)
(5.1
)Other

37

35

2

5.7Total Full Service Customers

7,343

7,495

(152
)
(2.0
)Retail access customers

3,209

3,029

180

5.9Sub-total

10,552

10,524

28

0.2NYPA, Municipal Agency and Other Sales

2,768

2,639

129

4.9Total Service Area

13,320

13,163

157

1.2
%


Electric sales and delivery volumes in Con Edison of New York's service area increased 1.2 percent in the three months ended March 2004 compared
with the first quarter of 2003 period, reflecting primarily increased deliveries to the New York Power Authority (NYPA), offset by the milder winter weather in the 2004 period compared with the colder
weather in the 2003 period. After adjusting for weather and billing day variations in each period, electric sales and delivery volumes in Con Edison of New York's service area increased
1.7 percent in 2004 compared with 2003. Weather-adjusted sales and delivery volumes represent an estimate of the sales and deliveries that would have been made if historical average weather
conditions had prevailed.

Electric
purchased power costs remained the same in the three months ended March 31, 2004 as compared with the 2003 period due to lower purchased volumes being offset by higher unit costs.
Electric fuel costs increased $9 million, reflecting an increase in sendout volumes.

Electric
operating income increased $13 million for the three months ended March 31, 2004 compared with 2003. The principal components of the increase were higher net revenues (operating
revenues less purchased power and fuel costs - $31 million) and a decrease in other operations and maintenance expense ($3 million), partially offset by an increase in income
taxes ($16 million), property taxes ($5 million) and depreciation ($3 million).

Gas

Con Edison of New York's gas operating revenues in the three months ended March 31, 2004 increased $19 million compared with the 2003 period, due
primarily to the higher cost of purchased gas of $27 million (which is recoverable from customers), partially offset by lower firm sales due to the milder winter weather.

Con
Edison of New York's revenues from gas sales are subject to a weather normalization clause that moderates, but does not eliminate, the effect of weather-related changes on net income.

48

---



Gas
sales and deliveries, excluding off-system sales, for the first quarter of 2004 compared with the first quarter of 2003 were:

THOUSANDS OF DTHS

Three Months EndedDescription

March 31, 2004

March 31, 2003

Variation

Percent
VariationFirm SalesResidential

24,636

25,860

(1,224
)
(4.7
)%General

15,360

15,840

(480
)
(3.0
)Firm Transportation

7,028

7,160

(132
)
(1.8
)Total Firm Sales and Transportation

47,024

48,860

(1,836
)
(3.8
)Off Peak/Interruptible Sales

5,487

5,684

(197
)
(3.4
)Non-Firm Transportation of GasNYPA

2,668

3,843

(1,175
)
(30.6
)Generation Plants

4,987

5,462

(475
)
(8.7
)Total NYPA and Generation Plants

7,655

9,305

(1,650
)
(17.7
)Other

5,260

7,244

(1,984
)
(27.4
)Total Sales and Transportation

65,426

71,093

(5,667
)
(8.0
)%


Sales and transportation volumes for firm customers decreased 3.8 percent in the 2004 period compared with the 2003 period. The decrease reflects the
impact of milder winter weather. After adjusting for weather and billing day variations in each period, firm gas sales and transportation volumes in the company's service area increased
0.9 percent in the 2004 period.

Non-firm
transportation of customer-owned gas to NYPA, electric generators and other customers decreased in the three months ended March 31, 2004 as compared with the first quarter
of 2003 because the relative prices of gas and fuel oil led the generators and other customers in the company's gas service area used oil rather than gas for a significant portion of their generation
and other needs. The decline in gas usage had minimal impact on earnings due to the application of a fixed demand charge for local transportation.

Purchased
gas costs increased $27 million in the three months ended March 31, 2004 compared with the 2003 period, due to higher unit costs.

Gas
operating income decreased $7 million in the three months ended March 31, 2004 compared with the first quarter of 2003, reflecting primarily lower net revenues (operating revenues
less gas purchased for resale).

49

---



Steam

Con Edison of New York's steam operating revenues and steam operating income decreased $3 million and $6 million, respectively, in the three
months ended March 31, 2004 compared with the 2003 period. The lower revenues reflect lower sales volumes due to the milder winter weather in the three months ended March 31, 2004 as
compared with the colder weather in the 2003 period and the timing of certain fuel cost recoveries. This decrease in steam operating revenues was partially offset by higher revenues associated with
increased costs for fuel and purchased power. The decrease in steam operating income reflects primarily lower net revenues (operating revenues less fuel and purchased power costs).

Steam
sales and deliveries for the first quarter of 2004 compared with the first quarter of 2003 were:

MILLIONS OF POUNDS

|                |             | Three Months Ended |        |       |        |     |    
|--------------- | ----------- | ------------------ | ------ | ----- | ------ | --- | ---
|
|
|General         |             | 427                |        | 447   |        | (20 | )  
|Apartment house |             | 3,379              |        | 3,446 |        | (67 | )  
|Annual power    |             | 6,807              |        | 6,779 |        | 28  |    
|                |            
|                | Total Sales |                    | 10,613 |       | 10,672 |     | (59
|                |            

Steam sales and delivery volumes decreased 0.5 percent in the three months ended March 31, 2004 compared with the 2003 period, reflecting the
impact of the aforementioned milder winter weather. After adjusting for weather and billing day variations in each period, steam sales and deliveries increased 1.0 percent.

Income
Taxes

Operating income taxes increased $13 million in the three months ended March 31, 2004 compared with the 2003 period, due primarily to higher
taxable income in the 2004 period.

Other
Income

Other income increased $10 million in the three months ended March 31, 2004 compared with the 2003 period, due primarily to interest income
associated with sales and use tax overpayments and increased allowance for equity funds used during construction.

Net
Interest Expense

Net interest expense decreased $3 million for the three months ended March 31, 2004 compared with the 2003 period due primarily to lower interest
expense on long-term debt as a result of refinancings at lower interest rates.

50

---



O&R

Electric

O&R's electric operating revenues increased $6 million in the three months ended March 31, 2004 compared with the 2003 period, due primarily to
higher purchased power costs in 2004 (which are recoverable from customers).

Electric
sales and deliveries, excluding off-system sales, for the first quarter of 2004 compared with the first quarter of 2003 were:

MILLIONS OF KWHS

Three Months EndedDescription

March 31, 2004

March 31, 2003

Variation

Percent
VariationResidential/Religious

415

436

(21
)
(4.8
)%Commercial/Industrial

531

572

(41
)
(7.2
)Other

27

27



Total Full Service Customers

973

1,035

(62
)
(6.0
)Retail access customers

405

308

97

31.5Total Service Area

1,378

1,343

35

2.6
%


Electric sales and delivery volumes in O&R's service area increased 2.6 percent in the three months ended March 31, 2004 compared with the first
quarter of 2003 due to growth in the number of customers and higher average customer usage. After adjusting for weather variations, electric sales and delivery volumes in O&R's service area increased
3.4 percent in the 2004 period.

Purchased
power costs increased $6 million for the three months ended March 31, 2004 compared with the 2003 period due primarily to an increase in the average unit cost.

Electric
operating income decreased $2 million during the three months ended March 31, 2004 compared with the first quarter of 2003 as a result of increased operations and maintenance
expenses of $3 million, primarily for pension costs and corporate charges, offset in part by lower depreciation and amortization costs of $1 million.

Gas

O&R's gas operating revenues increased $6 million during the three months ended March 31, 2004 compared with the first quarter of 2003. The
increase is due primarily to the impact of the 2003 gas rate agreement discussed in Note B to the financial statements in Item 8 of the Form 10-K and the higher cost of gas
purchased for resale in 2004 (which is recoverable from customers).

51

---



Gas
sales and deliveries, excluding off-system sales, in the 2004 period compared with the 2003 period were:

THOUSANDS OF DTHS

Three Months EndedDescription

March 31, 2004

March 31, 2003

Variation

Percent
VariationFirm SalesResidential

4,765

5,428

(663
)
(12.2
)%General

1,307

1,723

(416
)
(24.1
)Firm Transportation

4,263

3,439

824

24.0Total Firm Sales and Transportation

10,335

10,590

(255
)
(2.4
)Off Peak/Interruptible Sales

1,808

1,903

(95
)
(5.0
)Non-Firm Transportation of GasGeneration Plants

237

815

(578
)
(70.9
)Other

536

499

37

7.4Total Sales and Transportation

12,916

13,807

(891
)
(6.5
)%


Sales and transportation volumes for firm customers decreased 2.4 percent in the three months ended March 31, 2004 compared with the first quarter
of 2003. The decrease reflects the impact of the milder winter weather in the 2004 period. After adjusting for weather variations in each period, total firm sales and transportation volumes were
0.5 percent higher for the 2004 period compared with 2003.

Non-firm
transportation of customer-owned gas to electric generating plants decreased 70.9 percent for the three months ended March 31, 2004 as compared with the 2003 period
because the relative prices of gas and fuel oil led electric generating plants in the company's gas service area to use oil rather than gas for a significant portion of their generation. In addition,
one area power plant has constructed a direct connection to a gas transmission provider. The decline in gas usage had minimal impact on earnings due to the application of a fixed demand charge for
local transportation.

O&R's
cost of gas purchased for resale increased $3 million in the three months ended March 31, 2004 as compared with the 2003 period due to higher unit costs in 2004.

Gas
operating income was unchanged for the three months ended March 31, 2004 as compared with the 2003 period. Increased gas net revenues (operating revenues less gas purchased for resale),
reflecting primarily the impact of the 2003 gas rate agreement and lower income taxes were offset by increased gas operations and maintenance expenses (primarily for pension costs).

Taxes
Other Than Income Taxes

Taxes other than income taxes decreased $1 million during the three months ended March 31, 2004 compared with the 2003 period, reflecting
primarily lower payroll and gross receipts taxes.

52

---



Net
Interest Expense

O&R's net interest expense decreased by $1 million during the three months ended March 31, 2004 compared with the 2003 period, reflecting
primarily lower interest rates on variable rate debt and the redemption of a $35 million, 10-year debenture in March 2003 (see "Liquidity and Capital Resources," above).

UNREGULATED SUBSIDIARIES AND OTHER

Operating income for the unregulated subsidiaries during the three months ended March 31, 2004 was $3 million lower than the 2003 period.
Operating revenues were $47 million higher in the first quarter of 2004 reflecting primarily sales from Con Edison Development's increased generating capacity and higher retail electric sales
at Con Edison Solutions.

Operating
expenses, excluding income taxes, increased by $53 million, reflecting principally increased purchased power costs, gas costs and depreciation expenses. This increase was offset in
part by decreased operating expenses at Con Edison Development of $6 million due principally to the consolidation accounting associated with the Newington project. See Note T to the
financial statements in Item 8 of the Form 10-K. Lease payments made in both periods were recorded in operations expense in 2003 and in depreciation and interest expense in 2004 in
accordance with consolidation accounting.

Operating
income taxes decreased $3 million in the three months ended March 31, 2004 as compared with the 2003 period reflecting primarily lower taxable income.

Other
income (deductions) for the unregulated subsidiaries increased $4 million in the three months ended March 31, 2004 as compared with the first quarter of 2003 due primarily to a fee
paid to Con Edison in 2003 in connection with its guarantee of certain subsidiary obligations. This fee was eliminated in the accounting for inter-company transactions at the parent level.

Interest
charges for the three months ended March 31, 2004 as compared with 2003 increased by $7 million due to the additional interest expense at Con Edison Development attributable to
the consolidation of the Newington Project discussed above.

Earnings
attributable to the parent company were $6 million lower during the three months ended March 31, 2004 as compared with the 2003 period, reflecting primarily higher interest
expenses and the guarantee fee mentioned above.

53

---





ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information about the Companies' primary market risks associated with activities in derivative financial instruments, other financial instruments and
derivative commodity instruments, see "Financial and Commodity Market Risks" in Part 1, Item 2 of this report, which information is incorporated herein by reference. Also, see Item 7A of the
Form 10-K.

ITEM 4.    CONTROLS AND PROCEDURES

The Companies maintain disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed in the reports
that they submit to the Securities Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. For each of the
Companies, its management, with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure controls and procedures as of the end of the period
covered by this report and, based on such evaluation, has concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable assurance is not absolute assurance,
however, and there can be no assurance that any design of controls or procedures would be effective under all potential future conditions, regardless of how remote.

There
were no significant changes in internal controls or in other factors during the quarter that could significantly affect internal controls.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements intended to qualify for the safe-harbor provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectation and not facts.
Words such as "expects," "estimates," "anticipates," "intends," "plans," "will" and similar expressions identify forward-looking statements.

Actual
results or developments might differ materially from those included in the forward-looking statements because of various factors such as those detailed in "Forward-Looking Statements" in
Part II of the Form 10-K.

54

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PART II OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

Con Edison

Northeast Utilities

For information about the legal proceedings relating to Con Edison's October 1999 agreement to acquire Northeast Utilities, see Note E to the
financial statements included in Part 1, Item 1 of this report (which information is incorporated herein by reference).

Newington Project

For information about the settlement of legal proceedings relating to the Newington Project, see "Con Edison - Newington Project" in Part I, Item 3 of
the Form 10-K and Note G to the financial statements included in Part I, Item 1 of this report (which information is incorporated herein by reference).

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

Con Edison

|Exhibit 12.1   |  | Statement of computation of Con Edison's ratio of earnings to fixed charges for the three-month period ended March 31, 2004 and the twelve-month period ended December 31, 2003.
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31.1.1 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Executive Officer.                                                                                                                
|Exhibit 31.1.2 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Financial Officer.                                                                                                                
|Exhibit 32.1.1 |  | Section 1350 CertificationsChief Executive Officer.                                                                                                                            
|Exhibit 32.1.2 |  | Section 1350 CertificationsChief Financial Officer.                                                                                                                            

Con Edison of New York

|Exhibit 12.2   |  | Statement of computation of Con Edison of New York's ratio of earnings to fixed charges for the three-month period ended March 31, 2004 and the twelve-month period ended December 31, 2003.
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31.2.1 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Executive Officer.                                                                                                                            
|Exhibit 31.2.2 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Financial Officer.                                                                                                                            
|Exhibit 32.2.1 |  | Section 1350 CertificationsChief Executive Officer.                                                                                                                                        
|Exhibit 32.2.2 |  | Section 1350 CertificationsChief Financial Officer.                                                                                                                                        

O&R

|Exhibit 12.3   |  | Statement of computation of O&R's ratio of earnings to fixed charges for the three-month period ended March 31, 2004 and the twelve-month period ended December 31, 2003.
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 31.3.1 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Executive Officer.                                                                                                         
|Exhibit 31.3.2 |  | Rule 13a-14(a)/15d-14(a) CertificationsChief Financial Officer.                                                                                                         
|Exhibit 32.3.1 |  | Section 1350 CertificationsChief Executive Officer.                                                                                                                     
|Exhibit 32.3.2 |  | Section 1350 CertificationsChief Financial Officer.                                                                                                                     

55

---



The Companies filed a combined Current Report on Form 8-K, dated January 22, 2004, reporting (under Item 5) 2003 financial results and
furnishing (under Item 12) a copy of Con Edison's press release, dated January 22, 2004, with respect to, among other things, its 2003 financial results.

The
Companies also filed a combined Current Report on Form 8-K, dated April 22, 2004, reporting (under Item 5) 2004 first quarter financial results and furnishing
(under Item 12) a copy of Con Edison's press release, dated April 22, 2004, with respect to, among other things, its 2004 first quarter financial results.

Con
Edison and Con Edison of New York filed a combined Current Report on Form 8-K, dated April 30, 2004, reporting (under Item 5) the Con Edison of New York filing
with the PSC to increase charges for electric service discussed in Note C to the financial statements included in Part 1, Item 1 of this report and the continuing review of their
financing plans discussed under "Capital Resources" in Part I, Item 2 of this report.

56

---





Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                  |  | Consolidated Edison, Inc.                    
|----------------- |  | ---------------------------------------------
|                  |  | Consolidated Edison Company of New York, Inc.
|DATE: May 6, 2004 |  | By                                           
|                  |  | Orange and Rockland Utilities, Inc.          
|DATE: May 6, 2004 |  | By                                           

57

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