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

|/x/                                           | Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 
|--------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended MARCH 31, 2003
|or                                            |                                                                                         
|/ /                                           | 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. Yes/x/No/ /

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes/x/No/ /

As
of the close of business on April 30, 2003, Consolidated Edison, Inc. (Con Edison) had outstanding 214,577,014 Common Shares ($.10 par value). Con Edison owns all of the outstanding
common equity of Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (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). Con Edison of New York and O&R are subsidiaries of Con Edison, and
together with Con Edison are referred to in this report as "the Companies." Neither Con Edison of New York nor O&R 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                                                                  |  |                              
|                              |  |                                                                                       |  | Con Edison                    |  |                                               
|                              |  |                                                                                       |  |                               |  | Consolidated Balance Sheet                     |  | 4   
|                              |  |                                                                                       |  |                               |  | Consolidated Income Statement                  |  | 6   
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Comprehensive Income |  | 7   
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Retained Earnings    |  | 7   
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Cash Flows           |  | 8   
|                              |  |                                                                                       |  | Con Edison of New York        |  |                                               
|                              |  |                                                                                       |  |                               |  | Consolidated Balance Sheet                     |  | 9   
|                              |  |                                                                                       |  |                               |  | Consolidated Income Statement                  |  | 11  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Comprehensive Income |  | 12  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Retained Earnings    |  | 12  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Cash Flows           |  | 13  
|                              |  |                                                                                       |  | O&R                           |  |                                               
|                              |  |                                                                                       |  |                               |  | Consolidated Balance Sheet                     |  | 14  
|                              |  |                                                                                       |  |                               |  | Consolidated Income Statement                  |  | 16  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Comprehensive Income |  | 17  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Retained Earnings    |  | 17  
|                              |  |                                                                                       |  |                               |  | Consolidated Statement of Cash Flows           |  | 18  
|                              |  |                                                                                       |  | Notes to Financial Statements |  | 19                                            
|Item 2.                       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 35                           
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 53                           
|Item 4.                       |  | Controls and Procedures                                                               |  | 53                           
|                              |  | Forward-Looking Statements                                                            |  | 53                           
|Part II.Other Information    |  |                                                                                      
|Item 1.                       |  | Legal Proceedings                                                                     |  | 54                           
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                      |  | 54                           
|Signatures                    |  | 56                                                                                   
|Certifications                |  | 57                                                                                   

2

---

GLOSSARY OF TERMS

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

|Con Edison Companies      |  |                                             
|------------------------- |  | --------------------------------------------
|Con Edison                |  | Consolidated Edison, Inc                    
|Con Edison Communications |  | Con Edison Communications, LLC              
|Con 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          

|Regulatory and State Agencies |  |                                         
|----------------------------- |  | ----------------------------------------
|NYPA                          |  | New York Power Authority                
|PSC                           |  | New York State Public Service Commission
|SEC                           |  | Securities and Exchange Commission      

|Other     |  |                                                                                     
|--------- |  | ------------------------------------------------------------------------------------
|AFDC      |  | Allowance for Funds used During Construction                                        
|DTH       |  | Dekatherm                                                                           
|FASB      |  | Financial Accounting Standards Board                                                
|EITF      |  | Emerging Issues Task Force                                                          
|ENDRO     |  | Equivalent number of days of revenue outstanding                                    
|kwh       |  | Kilowatt-hour                                                                       
|MW        |  | Thousand kilowatts or Megawatts                                                     
|NYISO     |  | New York Independent System Operator                                                
|OCI       |  | Other Comprehensive Income                                                          
|PCBs      |  | Polychlorinated biphenyls                                                           
|SFAS      |  | Statement of Financial Accounting Standards                                         
|Superfund |  | Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980

3

---



Consolidated Edison, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                                 | As at                                                                                                                   
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------
|
|
|
|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 $32 and $30 in 2003 and 2002, respectively              
|                                                                 | Non-utility property, less accumulated depreciation of $22 and $19 in 2003 and 2002, respectively                       
|                                                                 | Construction work in progress                                                                                           
|                                                                
|NET PLANT                                                        |                                                                                                                         
|                                                                
|CURRENT ASSETS                                                   |                                                                                                                         
|                                                                 | Cash and temporary cash investments                                                                                     
|                                                                 | Restricted cash                                                                                                         
|                                                                 | Funds held for the redemption of long-term debt                                                                         
|                                                                 | Accounts receivable - customers, less allowance for uncollectible accounts of $36 and $35 in 2003 and 2002, respectively
|                                                                 | Accrued unbilled revenue                                                                                                
|                                                                 | Other receivables                                                                                                       
|                                                                 | 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 asset, less accumulated amortization of $11 and $10 in 2003 and 2002, respectively                           
|                                                                 | Prepaid pension costs                                                                                                   
|                                                                 | Regulatory assets                                                                                                       
|                                                                 | Other deferred charges and noncurrent assets                                                                            
|                                                                
|TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NON CURRENT ASSETS |                                                                                                                         
|                                                                
|TOTAL ASSETS                                                     | $                                                                                                                       
|                                                                

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

4

---



Consolidated Edison, Inc.CONSOLIDATED BALANCE SHEET(UNAUDITED)

|                                                  |                                                                                                                                   | As At |                                  
|------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ----- | ---------------------------------
|
|
|
|CAPITALIZATION AND LIABILITIES                    |                                                                                                                                   |       |                                  
|CAPITALIZATION                                    |                                                                                                                                   |       |                                  
|                                                  | Common stock, authorized 500,000,000 shares; outstanding 214,443,381 shares and 213,932,934 shares in 2003 and 2002, respectively |       | $                                
|                                                  | Retained earnings                                                                                                                 |       |                                  
|                                                  | Treasury stock, at cost; 23,210,700 shares in 2003 and 2002                                                                       |       |                                  
|                                                  | Capital stock expense                                                                                                             |       |                                  
|                                                  | Accumulated other comprehensive income (loss)                                                                                     |       |                                  
|                                                  |                                                                                                                                  
|                                                  |                                                                                                                                   |       | TOTAL COMMON SHAREHOLDERS' EQUITY
|                                                  |                                                                                                                                  
|                                                  | Preferred stock                                                                                                                   |       |                                  
|                                                  | Long-term debt                                                                                                                    |       |                                  
|                                                  |                                                                                                                                  
|TOTAL CAPITALIZATION                              |                                                                                                                                   |       | 12,207                           
|                                                  |                                                                                                                                  
|MINORITY INTERESTS                                |                                                                                                                                   |       | 8                                
|NONCURRENT LIABILITIES                            |                                                                                                                                   |       |                                  
|                                                  | Obligations under capital leases                                                                                                  |       |                                  
|                                                  | Provision for injuries and damages                                                                                                |       |                                  
|                                                  | Pension and benefits                                                                                                              |       |                                  
|                                                  | Superfund and other environmental costs                                                                                           |       |                                  
|                                                  | Independent power producer buyout                                                                                                 |       |                                  
|                                                  | Other noncurrent liabilities                                                                                                      |       |                                  
|                                                  |                                                                                                                                  
|TOTAL NONCURRENT LIABILITIES                      |                                                                                                                                   |       | 668                              
|                                                  |                                                                                                                                  
|CURRENT LIABILITIES                               |                                                                                                                                   |       |                                  
|                                                  | Long-term debt due within one year                                                                                                |       |                                  
|                                                  | Notes payable                                                                                                                     |       |                                  
|                                                  | Accounts payable                                                                                                                  |       |                                  
|                                                  | Customer deposits                                                                                                                 |       |                                  
|                                                  | Accrued taxes                                                                                                                     |       |                                  
|                                                  | Accrued interest                                                                                                                  |       |                                  
|                                                  | System benefit charge                                                                                                             |       |                                  
|                                                  | Accrued wages                                                                                                                     |       |                                  
|                                                  | Other current liabilities                                                                                                         |       |                                  
|                                                  |                                                                                                                                  
|TOTAL CURRENT LIABILITIES                         |                                                                                                                                   |       | 2,638                            
|                                                  |                                                                                                                                  
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                                                                                   |       |                                  
|                                                  | Deferred income taxes                                                                                                             |       |                                  
|                                                  | Deferred investment tax credits                                                                                                   |       |                                  
|                                                  | Regulatory liabilities                                                                                                            |       |                                  
|                                                  | Other deferred credits                                                                                                            |       |                                  
|                                                  |                                                                                                                                  
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                                                                                   |       | 3,746                            
|                                                  |                                                                                                                                  
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                                                                                   | $     | 19,267                           
|                                                  |                                                                                                                                  

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

5

---



Consolidated Edison, Inc.CONSOLIDATED INCOME STATEMENT(UNAUDITED)

|                                                                                 |                                                            | For the Three Months
Ended March 31, |      
|-------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------ | -----
|
|
|
|OPERATING REVENUES                                                               |                                                            |                                      |      
|                                                                                 | Electric                                                   |                                      | $    
|                                                                                 | Gas                                                        |                                      |      
|                                                                                 | Steam                                                      |                                      |      
|                                                                                 | Non-utility                                                |                                      |      
|                                                                                 |                                                           
|TOTAL OPERATING REVENUES                                                         |                                                            |                                      | 2,570
|                                                                                 |                                                           
|OPERATING EXPENSES                                                               |                                                            |                                      |      
|                                                                                 | Purchased power                                            |                                      |      
|                                                                                 | Fuel                                                       |                                      |      
|                                                                                 | Gas purchased for resale                                   |                                      |      
|                                                                                 | Other operations                                           |                                      |      
|                                                                                 | Maintenance                                                |                                      |      
|                                                                                 | Depreciation and amortization                              |                                      |      
|                                                                                 | Taxes, other than income taxes                             |                                      |      
|                                                                                 | Income taxes                                               |                                      |      
|                                                                                 |                                                           
|TOTAL OPERATING EXPENSES                                                         |                                                            |                                      | 2,313
|                                                                                 |                                                           
|OPERATING INCOME                                                                 |                                                            |                                      | 257  
|                                                                                 |                                                           
|OTHER INCOME (DEDUCTIONS)                                                        |                                                            |                                      |      
|                                                                                 | Investment income                                          |                                      |      
|                                                                                 | Allowance for equity funds used during construction        |                                      |      
|                                                                                 | Other income                                               |                                      |      
|                                                                                 | Other deductions                                           |                                      |      
|                                                                                 | Income taxes                                               |                                      |      
|                                                                                 |                                                           
|TOTAL OTHER INCOME (DEDUCTIONS)                                                  |                                                            |                                      | 6    
|                                                                                 |                                                           
|INCOME BEFORE INTEREST CHARGES                                                   |                                                            |                                      | 263  
|                                                                                 |                                                           
|                                                                                 | Interest on long-term debt                                 |                                      |      
|                                                                                 | Other interest                                             |                                      |      
|                                                                                 | Allowance for borrowed funds used during construction      |                                      |      
|                                                                                 |                                                           
|NET INTEREST CHARGES                                                             |                                                            |                                      | 106  
|                                                                                 |                                                           
|INCOME BEFORE PREFERRED STOCK DIVIDENDS                                          |                                                            |                                      | 157  
|                                                                                 |                                                           
|PREFERRED STOCK DIVIDEND REQUIREMENTS                                            |                                                            |                                      | 3    
|                                                                                 |                                                           
|INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                |                                                            |                                      | 154  
|                                                                                 |                                                           
|CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (NET OF INCOME TAXES OF $14) |                                                            |                                      |     
|                                                                                 |                                                           
|NET INCOME FOR COMMON STOCK                                                      |                                                            | $                                    | 154  
|                                                                                 |                                                           
|EARNINGS PER COMMON SHARE - BASIC                                                |                                                            |                                      |      
|                                                                                 | Before cumulative effect of change in accounting principle |                                      | $    
|                                                                                 |                                                           
|                                                                                 | Cumulative effect of change in accounting principle        |                                      | $    
|                                                                                 |                                                           
|                                                                                 | After cumulative effect of change in accounting principle  |                                      | $    
|                                                                                 |                                                           
|EARNINGS PER COMMON SHARE - DILUTED                                              |                                                            |                                      |      
|                                                                                 | Before cumulative effect of change in accounting principle |                                      | $    
|                                                                                 |                                                           
|                                                                                 | Cumulative effect of change in accounting principle        |                                      | $    
|                                                                                 |                                                           
|                                                                                 | After cumulative effect of change in accounting principle  |                                      | $    
|                                                                                 |                                                           
|DIVIDENDS DECLARED PER SHARE OF COMMON STOCK                                     |                                                            | $                                    | 0.560
|                                                                                 |                                                           
|AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC (IN MILLIONS)                       |                                                            |                                      | 214.2
|                                                                                 |                                                           
|AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED (IN MILLIONS)                     |                                                            |                                      | 215.1
|                                                                                 |                                                           

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

6

---



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

|                                                |                                                                                                                                      | For the Three Months
Ended March 31, |    
|----------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------ | ---
|
|
|
|NET INCOME FOR COMMON STOCK                     |                                                                                                                                      | $                                    | 154
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES |                                                                                                                                      |                                      |    
|                                                | Minimum pension liability adjustments, net of ($2) taxes in 2002                                                                     |                                      |    
|                                                | Unrealized gains on derivatives qualified as hedges, net of $9 and $8 taxes in 2003 and 2002, respectively                           |                                      |    
|                                                | Less: Reclassification adjustment for gains (losses) included in net income, net of $8 and ($6) taxes in 2003 and 2002, respectively |                                      |    
|                                                |                                                                                                                                     
|TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES  |                                                                                                                                      |                                      | 2  
|                                                |                                                                                                                                     
|COMPREHENSIVE INCOME                            |                                                                                                                                      | $                                    | 156
|                                                |                                                                                                                                     

Consolidated Edison, Inc.CONSOLIDATED STATEMENT OF RETAINED EARNINGS(UNAUDITED)

|                                                                     |                                                           | For the Three Months
Ended March 31,
|-------------------------------------------------------------------- | --------------------------------------------------------- | ------------------------------------
|
|
|
|BALANCE, JANUARY 1                                                   |                                                           | $                                   
|                                                                     | Less: Stock options exercised                             |                                     
|                                                                     | Income before preferred stock dividends                   |                                     
|                                                                     | Less: Cumulative effect of change in accounting principle |                                     
|                                                                    
|NET INCOME AFTER CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |                                                           |                                     
|                                                                    
|TOTAL                                                                |                                                           |                                     
|                                                                    
|DIVIDENDS DECLARED ON CAPITAL STOCK                                  |                                                           |                                     
|                                                                     | Cumulative preferred, at required annual rates            |                                     
|                                                                     | Common, $.56 and $.555 per share, respectively            |                                     
|                                                                    
|TOTAL DIVIDENDS DECLARED                                             |                                                           |                                     
|                                                                    
|BALANCE, MARCH 31                                                    |                                                           | $                                   
|                                                                    

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

7

---



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)                     
|                                                   |                                                |                                      | Cumulative effect of change in accounting principle                    
|                                                   |                                                |                                      | 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                                                       
|                                                   |                                                |                                      | Pension and benefits                                                   
|                                                   |                                                |                                      | Accrued taxes                                                          
|                                                   |                                                |                                      | Accrued interest                                                       
|                                                   |                                                |                                      | Deferred charges and regulatory assets                                 
|                                                   |                                                |                                      | Deferred credits and regulatory liabilities                            
|                                                   |                                                |                                      | Transmission congestion contracts                                      
|                                                   |                                                |                                      | Other assets                                                           
|                                                   |                                                |                                      | Other liabilities                                                      
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES |                                                |                                      | (54                                                                    
|                                                   |                                               
|INVESTING ACTIVITIES                               |                                                |                                      |                                                                        
|                                                   |                                                |                                      | Utility construction expenditures                                      
|                                                   |                                                |                                      | Cost of removal less salvage                                           
|                                                   |                                                |                                      | 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        |                                                |                                      | (333                                                                   
|                                                   |                                               
|FINANCING ACTIVITIES                               |                                                |                                      |                                                                        
|                                                   |                                                |                                      | Net proceeds from short-term debt                                      
|                                                   |                                                |                                      | Retirement of long-term debt                                           
|                                                   |                                                |                                      | Issuance of common stock                                               
|                                                   |                                                |                                      | Issuance of long-term debt                                             
|                                                   |                                                |                                      | Debt issuance costs                                                    
|                                                   |                                                |                                      | Common stock dividends                                                 
|                                                   |                                                |                                      | Preferred stock dividends                                              
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES |                                                |                                      | 333                                                                    
|                                                   |                                               
|CASH AND TEMPORARY CASH INVESTMENTS:               |                                                |                                      |                                                                        
|NET CHANGE FOR THE PERIOD                          |                                                |                                      | (54                                                                    
|BALANCE AT BEGINNING OF PERIOD                     |                                                |                                      | 132                                                                    
|                                                   |                                               
|BALANCE AT END OF PERIOD                           |                                                |                                      | 78                                                                     
|LESS: RESTRICTED CASH                              |                                                |                                      | 16                                                                     
|                                                   |                                               
|BALANCE: CASH AND TEMPORARY CASH INVESTMENTS       |                                                | $                                    | 62                                                                     
|                                                   |                                               
|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.

8

---



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

|                                                                |                                                                                                    | As at
|--------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | -----
|
|
|
|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                                                                |      
|                                                                | Funds held for the redemption of long-term debt                                                    |      
|                                                                | Accounts receivable - customers, less allowance for uncollectible accounts of $30 in 2003 and 2002 |      
|                                                                | Other receivables                                                                                  |      
|                                                                | 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                                                    |                                                                                                    | $    
|                                                               

9

---



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

|                                                  |                                                                                              | As at |                                  
|------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----- | ---------------------------------
|
|
|
|CAPITALIZATION AND LIABILITIES                    |                                                                                              |       |                                  
|CAPITALIZATION                                    |                                                                                              |       |                                  
|                                                  | Common stock, authorized 340,000,000 shares; outstanding 235,488,094 shares in 2003 and 2002 |       | $                                
|                                                  | Repurchased Consolidated Edison, Inc. common stock                                           |       |                                  
|                                                  | Retained earnings                                                                            |       |                                  
|                                                  | Capital stock expense                                                                        |       |                                  
|                                                  | Accumulated other comprehensive income (loss)                                                |       |                                  
|                                                  |                                                                                             
|                                                  |                                                                                              |       | TOTAL COMMON SHAREHOLDERS' EQUITY
|                                                  |                                                                                             
|                                                  | Preferred stock                                                                              |       |                                  
|                                                  |                                                                                              |       | $5 Cumulative Preferred          
|                                                  |                                                                                              |       | 4.65% Series C                   
|                                                  |                                                                                              |       | 4.65% Series D                   
|                                                  |                                                                                             
|                                                  |                                                                                              |       | TOTAL PREFERRED STOCK            
|                                                  |                                                                                             
|                                                  | Long-term debt                                                                               |       |                                  
|                                                  |                                                                                             
|TOTAL CAPITALIZATION                              |                                                                                              |       | 10,390                           
|                                                  |                                                                                             
|NONCURRENT LIABILITIES                            |                                                                                              |       |                                  
|                                                  | Obligations under capital leases                                                             |       |                                  
|                                                  | Provision for injuries and damages                                                           |       |                                  
|                                                  | Pension and benefits                                                                         |       |                                  
|                                                  | Superfund and other environmental costs                                                      |       |                                  
|                                                  | Independent power producer buyout                                                            |       |                                  
|                                                  | Other noncurrent liabilities                                                                 |       |                                  
|                                                  |                                                                                             
|TOTAL NONCURRENT LIABILITIES                      |                                                                                              |       | 481                              
|                                                  |                                                                                             
|CURRENT LIABILITIES                               |                                                                                              |       |                                  
|                                                  | Long-term debt due within one year                                                           |       |                                  
|                                                  | Notes payable                                                                                |       |                                  
|                                                  | Accounts payable                                                                             |       |                                  
|                                                  | Accounts payable to affiliated companies                                                     |       |                                  
|                                                  | Customer deposits                                                                            |       |                                  
|                                                  | Accrued taxes                                                                                |       |                                  
|                                                  | Accrued interest                                                                             |       |                                  
|                                                  | System benefit charge                                                                        |       |                                  
|                                                  | Accrued wages                                                                                |       |                                  
|                                                  | Other current liabilities                                                                    |       |                                  
|                                                  |                                                                                             
|TOTAL CURRENT LIABILITIES                         |                                                                                              |       | 2,116                            
|                                                  |                                                                                             
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                                              |       |                                  
|                                                  | Deferred income taxes                                                                        |       |                                  
|                                                  | Deferred investment tax credits                                                              |       |                                  
|                                                  | Regulatory liabilities                                                                       |       |                                  
|                                                  |                                                                                             
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                                              |       | 3,414                            
|                                                  |                                                                                             
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                                              | $     | 16,401                           
|                                                  |                                                                                             

10

---



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                |                                                       |                                      | 2,150
|                                        |                                                      
|OPERATING EXPENSES                      |                                                       |                                      |      
|                                        | Purchased power                                       |                                      |      
|                                        | Fuel                                                  |                                      |      
|                                        | Gas purchased for resale                              |                                      |      
|                                        | Other operations                                      |                                      |      
|                                        | Maintenance                                           |                                      |      
|                                        | Depreciation and amortization                         |                                      |      
|                                        | Taxes, other than income taxes                        |                                      |      
|                                        | Income taxes                                          |                                      |      
|                                        |                                                      
|TOTAL OPERATING EXPENSES                |                                                       |                                      | 1,921
|                                        |                                                      
|OPERATING INCOME                        |                                                       |                                      | 229  
|                                        |                                                      
|OTHER INCOME (DEDUCTIONS)               |                                                       |                                      |      
|                                        | Allowance for equity funds used during construction   |                                      |      
|                                        | Other income                                          |                                      |      
|                                        | Other deductions                                      |                                      |      
|                                        | Income taxes                                          |                                      |      
|                                        |                                                      
|TOTAL OTHER INCOME (DEDUCTIONS)         |                                                       |                                      | 5    
|                                        |                                                      
|INCOME BEFORE INTEREST CHARGES          |                                                       |                                      | 234  
|                                        |                                                      
|                                        | Interest on long-term debt                            |                                      |      
|                                        | Other interest                                        |                                      |      
|                                        | Allowance for borrowed funds used during construction |                                      |      
|                                        |                                                      
|NET INTEREST CHARGES                    |                                                       |                                      | 93   
|                                        |                                                      
|INCOME BEFORE PREFERRED STOCK DIVIDENDS |                                                       |                                      | 141  
|                                        |                                                      
|PREFERRED STOCK DIVIDEND REQUIREMENTS   |                                                       |                                      | 3    
|                                        |                                                      
|NET INCOME FOR COMMON STOCK             |                                                       | $                                    | 138  
|                                        |                                                      

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

11

---



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

|                                                |                                                                              | For the Three Months
Ended March 31, |    
|----------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------ | ---
|
|
|
|NET INCOME FOR COMMON STOCK                     |                                                                              | $                                    | 138
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES |                                                                              |                                      |    
|                                                | Minimum pension liability adjustments, net ($2) taxes in 2002                |                                      |    
|                                                | Unrealized gains on derivatives qualified as hedges, net of $1 taxes in 2002 |                                      |    
|                                                |                                                                             
|TOTAL OTHER COMPREHENSIVE LOSS, NET OF TAXES    |                                                                              |                                      |   
|                                                |                                                                             
|COMPREHENSIVE INCOME                            |                                                                              | $                                    | 138
|                                                |                                                                             

Consolidated Edison Company of New York, Inc.CONSOLIDATED STATEMENT OF RETAINED EARNINGS(UNAUDITED)

|                                    |                                                | For the Three Months
Ended March 31,
|----------------------------------- | ---------------------------------------------- | ------------------------------------
|
|
|
|BALANCE, JANUARY 1                  |                                                | $                                   
|                                    | Income before preferred stock dividends        |                                     
|                                   
|TOTAL                               |                                                |                                     
|                                   
|DIVIDENDS DECLARED ON CAPITAL STOCK |                                                |                                     
|                                    | Cumulative preferred, at required annual rates |                                     
|                                    | Common                                         |                                     
|                                   
|TOTAL DIVIDENDS DECLARED            |                                                |                                     
|                                   
|BALANCE, MARCH 31                   |                                                | $                                   
|                                   

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

12

---



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

|                                                   |                                                | For the Three Months
Ended March 31, |                                                                        
|-------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | -----------------------------------------------------------------------
|
|
|
|OPERATING ACTIVITIES                               |                                                |                                      |                                                                        
|                                                   | Income before preferred stock dividend         |                                      | $                                                                      
|                                                   | 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                                                       
|                                                   |                                                |                                      | Pension and benefits                                                   
|                                                   |                                                |                                      | Accrued taxes                                                          
|                                                   |                                                |                                      | Accrued interest                                                       
|                                                   |                                                |                                      | Deferred charges and regulatory assets                                 
|                                                   |                                                |                                      | Deferred credits and regulatory liabilities                            
|                                                   |                                                |                                      | Transmission congestion contracts                                      
|                                                   |                                                |                                      | Other assets                                                           
|                                                   |                                                |                                      | Other liabilities                                                      
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES |                                                |                                      | (117                                                                   
|                                                   |                                               
|INVESTING ACTIVITIES                               |                                                |                                      |                                                                        
|                                                   |                                                |                                      | Construction expenditures                                              
|                                                   |                                                |                                      | Cost of removal less salvage                                           
|                                                   |                                                |                                      | 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        |                                                |                                      | (274                                                                   
|                                                   |                                               
|FINANCING ACTIVITIES                               |                                                |                                      |                                                                        
|                                                   |                                                |                                      | Net proceeds from short-term debt                                      
|                                                   |                                                |                                      | Retirement of long-term debt                                           
|                                                   |                                                |                                      | Issuance of long-term debt                                             
|                                                   |                                                |                                      | Debt issuance costs                                                    
|                                                   |                                                |                                      | Common stock dividends                                                 
|                                                   |                                                |                                      | Preferred stock dividends                                              
|                                                   |                                               
|NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES |                                                |                                      | 337                                                                    
|                                                   |                                               
|CASH AND TEMPORARY CASH INVESTMENTS:               |                                                |                                      |                                                                        
|NET CHANGE FOR THE PERIOD                          |                                                |                                      | (54                                                                    
|BALANCE AT BEGINNING OF PERIOD                     |                                                |                                      | 88                                                                     
|                                                   |                                               
|BALANCE AT END OF PERIOD                           |                                                | $                                    | 34                                                                     
|                                                   |                                               
|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.

13

---



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

|                                                                |                                                                                                       | As at
|--------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | -----
|
|
|
|ASSETS                                                          |                                                                                                       |      
|UTILITY PLANT, AT ORIGINAL COST                                 |                                                                                                       |      
|                                                                | Electric                                                                                              |      
|                                                                | Gas                                                                                                   |      
|                                                                | General                                                                                               |      
|                                                               
|                                                                | Total                                                                                                 |      
|                                                                | Less: accumulated depreciation                                                                        |      
|                                                               
|                                                                | Net                                                                                                   |      
|                                                                | Construction work in progress                                                                         |      
|                                                               
|NET UTILITY PLANT                                               |                                                                                                       |      
|                                                               
|NON-UTILITY PLANT                                               |                                                                                                       |      
|                                                                | Non-utility property, less accumulated depreciation of $0.3 and $2.0 in 2003 and 2002, respectively   |      
|                                                               
|NET PLANT                                                       |                                                                                                       |      
|                                                               
|CURRENT ASSETS                                                  |                                                                                                       |      
|                                                                | Cash and temporary cash investments                                                                   |      
|                                                                | Accounts receivable - customers, less allowance for uncollectible accounts of $1 and $2, respectively |      
|                                                                | Other accounts receivable, less allowance for uncollectible accounts of $1 in 2003 and 2002           |      
|                                                                | Accrued unbilled revenue                                                                              |      
|                                                                | 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.

14

---



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

|                                                  |                                                                        | As at |                                  
|------------------------------------------------- | ---------------------------------------------------------------------- | ----- | ---------------------------------
|
|
|
|CAPITALIZATION AND LIABILITIES                    |                                                                        |       |                                  
|CAPITALIZATION                                    |                                                                        |       |                                  
|                                                  | Common Stock, authorized and outstanding 1,000 shares in 2003 and 2002 |       | $                                
|                                                  | Additional paid in capital                                             |       |                                  
|                                                  | Retained earnings                                                      |       |                                  
|                                                  | Accumulated other comprehensive income (loss)                          |       |                                  
|                                                  |                                                                       
|                                                  |                                                                        |       | TOTAL COMMON SHAREHOLDER'S EQUITY
|                                                  |                                                                       
|                                                  | Long-term debt                                                         |       |                                  
|                                                  |                                                                       
|TOTAL CAPITALIZATION                              |                                                                        |       | 658                              
|                                                  |                                                                       
|NONCURRENT LIABILITIES                            |                                                                        |       |                                  
|                                                  | Pension and benefits                                                   |       |                                  
|                                                  | Hedges on variable rate long term-debt                                 |       |                                  
|                                                  | Superfund and other environmental costs                                |       |                                  
|                                                  | Other noncurrent liabilities                                           |       |                                  
|                                                  |                                                                       
|TOTAL NONCURRENT LIABILITIES                      |                                                                        |       | 175                              
|                                                  |                                                                       
|CURRENT LIABILITIES                               |                                                                        |       |                                  
|                                                  | Long-term debt due within one year                                     |       |                                  
|                                                  | Notes payable                                                          |       |                                  
|                                                  | Accounts payable                                                       |       |                                  
|                                                  | Accounts payable to affiliated companies                               |       |                                  
|                                                  | Accrued taxes                                                          |       |                                  
|                                                  | Customer deposits                                                      |       |                                  
|                                                  | Accrued interest                                                       |       |                                  
|                                                  | Other current liabilities                                              |       |                                  
|                                                  |                                                                       
|TOTAL CURRENT LIABILITIES                         |                                                                        |       | 147                              
|                                                  |                                                                       
|DEFERRED CREDITS AND REGULATORY LIABILITIES       |                                                                        |       |                                  
|                                                  | Deferred income taxes                                                  |       |                                  
|                                                  | Deferred investment tax credits                                        |       |                                  
|                                                  | Regulatory liabilities                                                 |       |                                  
|                                                  | Other deferred credits                                                 |       |                                  
|                                                  |                                                                       
|TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES |                                                                        |       | 199                              
|                                                  |                                                                       
|TOTAL CAPITALIZATION AND LIABILITIES              |                                                                        | $     | 1,179                            
|                                                  |                                                                       

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

15

---



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               |                                     
|                                | 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 CHARGES  |                                |                                     
|                               
|                                | Interest on long-term debt     |                                     
|                                | Other interest                 |                                     
|                               
|NET INTEREST CHARGES            |                                |                                     
|                               
|NET INCOME FOR COMMON STOCK     |                                | $                                   
|                               

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

16

---



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       |                                                                                  |                                     
|                                                      | Unrealized gains on derivatives qualified as hedges, net of taxes                |                                     
|                                                      | Less: Reclassification adjustment for gains included in net income, net of taxes |                                     
|                                                     
|TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES |                                                                                  |                                     
|                                                     
|COMPREHENSIVE INCOME                                  |                                                                                  | $                                   
|                                                     

Orange and Rockland Utilities, Inc.CONSOLIDATED STATEMENT OF RETAINED EARNINGS(UNAUDITED)

|                   |                             | For the Three Months
Ended March 31, |    
|------------------ | --------------------------- | ------------------------------------ | ---
|
|
|
|BALANCE, JANUARY 1 |                             | $                                    | 169
|                   | Net income for common stock |                                      |    
|                   |                            
|TOTAL              |                             |                                      | 185
|                   |                            
|                   | Dividends to parent         |                                      |    
|                   |                            
|BALANCE, MARCH 31  |                             | $                                    | 178
|                   |                            

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

17

---



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

|                                                 |                                                | For the Three Months Ended
March 31, |                                                                   
|------------------------------------------------ | ---------------------------------------------- | ------------------------------------ | ------------------------------------------------------------------
|
|
|
|OPERATING ACTIVITIES                             |                                                |                                      |                                                                   
|                                                 | Net income for common stock                    |                                      | $                                                                 
|                                                 | PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME |                                      |                                                                   
|                                                 |                                                |                                      | Depreciation and amortization                                     
|                                                 |                                                |                                      | Deferred income taxes                                             
|                                                 |                                                |                                      | Gain on sale of land                                              
|                                                 | 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           
|                                                 |                                                |                                      | Deferred recoverable energy costs                                 
|                                                 |                                                |                                      | Pension and benefits                                              
|                                                 |                                                |                                      | Accounts payable                                                  
|                                                 |                                                |                                      | Accrued taxes                                                     
|                                                 |                                                |                                      | Accrued interest                                                  
|                                                 |                                                |                                      | Deferred debits and regulatory assets                             
|                                                 |                                                |                                      | Deferred credits and regulatory liabilities                       
|                                                 |                                                |                                      | Other assets                                                      
|                                                 |                                                |                                      | Other liabilities                                                 
|                                                 |                                               
|NET CASH FLOWS FROM OPERATING ACTIVITIES         |                                                |                                      | 26                                                                
|                                                 |                                               
|INVESTING ACTIVITIES                             |                                                |                                      |                                                                   
|                                                 |                                                |                                      | Construction expenditures                                         
|                                                 |                                                |                                      | Proceeds from sale of land                                        
|                                                 |                                               
|NET CASH FLOWS USED IN INVESTING ACTIVITIES      |                                                |                                      | (7                                                                
|                                                 |                                               
|FINANCING ACTIVITIES                             |                                                |                                      |                                                                   
|                                                 |                                                |                                      | Net proceeds from/(retirement of) short-term debt                 
|                                                 |                                                |                                      | Retirement of long-term debt                                      
|                                                 |                                                |                                      | Dividend to parent                                                
|                                                 |                                               
|NET CASH FLOWS USED IN FINANCING ACTIVITIES      |                                                |                                      | (9                                                                
|                                                 |                                               
|CASH AND TEMPORARY CASH INVESTMENTS:             |                                                |                                      |                                                                   
|NET CHANGE FOR THE PERIOD                        |                                                |                                      | 10                                                                
|BALANCE AT BEGINNING OF PERIOD                   |                                                |                                      | 2                                                                 
|                                                 |                                               
|BALANCE AT END OF PERIOD                         |                                                | $                                    | 12                                                                
|                                                 |                                               
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |                                                |                                      |                                                                   
|                                                 | Cash paid during the period for:               |                                      |                                                                   
|                                                 |                                                |                                      | Interest                                                          
|                                                 |                                                |                                      | Income Taxes                                                      
|                                                 |                                               

18

---



NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

General

These combined notes accompany and form an integral part of the interim consolidated financial statements of each of 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). Con Edison of New York and O&R, which are regulated utilities, are subsidiaries of Con Edison, and together with Con Edison are referred to in these combined notes as "the Companies." Amounts
shown for Con Edison include unregulated subsidiaries. The financial statements of each of the Companies are unaudited but, in the opinion of the Companies' 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 financial statements of each of the Companies
should be read together with their respective audited financial statements (including the notes thereto) included in Item 8 of the Companies' combined Annual Reports on Form 10-K
for the year ended December 31, 2002 (the Form 10-K). The use of terms such as "see" or "refer to" shall be deemed to incorporate by reference into these notes the
information to which reference is made. Except as otherwise noted, the information in these combined notes relates to each of the Companies. Neither Con Edison of New York nor O&R makes any
representation as to the information contained in this report or the Form 10-K relating to Con Edison or the subsidiaries of Con Edison other than itself. Results for interim
periods are not necessarily indicative of results for the entire fiscal year.

19

---

Note A - Earnings per Common Share (Con Edison)

Reference is made to "Earnings per Share" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K. For
the three months ended March 31, 2003 and 2002, respectively, Con Edison's basic and diluted EPS are calculated as follows:

|                                                                                  |  | 2003 |      | 2002
|--------------------------------------------------------------------------------- |  | ---- | ---- | ----
|
|
|Net income                                                                        |  | $    | 157  |     
|Less: Preferred stock dividend requirements                                       |  |      | 3    |     
|                                                                                 
|Income available to common shareholders                                           |  | $    | 154  |     
|Less: Cumulative effect of change in accounting principle, net of tax             |  |      |     |     
|                                                                                 
|Net income applicable to common stock                                             |  | $    | 154  |     
|                                                                                 
|Number of shares on which basic EPS is calculated:                                |  |      | 214  |     
|Add: incremental shares attributable to effect of potentially dilutive securities |  |      | 1    |     
|                                                                                 
|Number of shares on which diluted EPS is calculated                               |  |      | 215  |     
|                                                                                 
|EARNINGS PER COMMON SHARE - BASIC                                                 |  |      |      |     
|Before cumulative effect of change in accounting principle                        |  | $    | 0.72 |     
|Cumulative effect of change in accounting principle                               |  |      |     |     
|                                                                                 
|After cumulative effect of change in accounting principle                         |  | $    | 0.72 |     
|                                                                                 
|EARNINGS PER COMMON SHARE - DILUTED                                               |  |      |      |     
|Before cumulative effect of change in accounting principle                        |  | $    | 0.72 |     
|Cumulative effect of change in accounting principle                               |  |      |     |     
|                                                                                 
|After cumulative effect of change in accounting principle                         |  | $    | 0.72 |     
|                                                                                 

Stock
options to purchase 6.9 million and 5.0 million common shares for the three months ended March 31, 2003 and 2002, respectively, were not included in the respective period's
computation of diluted earnings per share because the exercise prices of the options were greater than the average market price of the common shares.

20

---

Note B - Stock-Based Compensation

Reference is made to "Stock-Based Compensation" in Note A to the Companies' financial statements in Item 8 of the Form 10-K.

|                                                                                                                                      |                       | Con Edison |     | Con Edison of New York |   | O&R
|------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | ---------- | --- | ---------------------- | - | ---
|
|
|
|Net income, as reported                                                                                                               |                       | $          | 154 |                        | $ | 146
|Add: Stock-based compensation expense included in reported net income, net of related tax effects                                     |                       |            | 1   |                        |   |   
|Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects |                       |            | (2  | )                      |   | (1 
|                                                                                                                                     
|Pro forma net income                                                                                                                  |                       | $          | 153 |                        | $ | 145
|                                                                                                                                     
|Number of shares on which basic EPS is calculated                                                                                     |                       |            | 214 |                        |   | 212
|Add: Incremental shares attributable to effect of dilutive securities                                                                 |                       |            | 1   |                        |   | 1  
|                                                                                                                                     
|Number of shares on which diluted EPS is calculated                                                                                   |                       |            | 215 |                        |   | 213
|                                                                                                                                     
|Earnings per share:                                                                                                                   |                       |            |     |                        |   |    
|                                                                                                                                      | Basic - as reported   |            | $   | 0.72                   |   | $  
|                                                                                                                                      | Basic - pro forma     |            | $   | 0.71                   |   | $  
|                                                                                                                                     
|                                                                                                                                      | Diluted - as reported |            | $   | 0.72                   |   | $  
|                                                                                                                                      | Diluted - pro forma   |            | $   | 0.71                   |   | $  
|                                                                                                                                     

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.

21

---

Note C - Accounting for Regulated Public UtilitiesSFAS No. 71

Reference is made to "Accounting Policies" in Note A to the Companies' financial statements in Item 8 of the Form 10-K.

Regulatory
assets and liabilities at March 31, 2003 and at December 31, 2002 were comprised of the following items:

|                             |                                                   | Con Edison |       | Con Edison of New York |   | O&R  
|---------------------------- | ------------------------------------------------- | ---------- | ----- | ---------------------- | - | -----
|
|
|
|Regulatory assets            |                                                   |            |       |                        |   |      
|                             | Future federal income tax                         |            | $     | 633                    |   | $    
|                             | Recoverable energy costs                          |            |       | 395                    |   |      
|                             | Sale of nuclear generating plant                  |            |       | 205                    |   |      
|                             | Real estate sale costs - First Avenue properties  |            |       | 137                    |   |      
|                             | Deferred retirement program costs                 |            |       | 84                     |   |      
|                             | Deferred unbilled gas revenue                     |            |       | 44                     |   |      
|                             | Deferred environmental remediation costs          |            |       | 90                     |   |      
|                             | Workers' compensation                             |            |       | 54                     |   |      
|                             | Deferred asbestos - related costs                 |            |       | 39                     |   |      
|                             | Divestiture - capacity replacement reconciliation |            |       | 26                     |   |      
|                             | Deferred revenue taxes                            |            |       | 72                     |   |      
|                             | World Trade Center restoration costs              |            |       | 67                     |   |      
|                             | Other                                             |            |       | 139                    |   |      
|                            
|Total Regulatory Assets      |                                                   | $          | 1,985 |                        | $ | 1,866
|                            
|Regulatory liabilities       |                                                   |            |       |                        |   |      
|                             | NYISO reconciliation                              |            | $     | 107                    |   | $    
|                             | World Trade Center casualty loss                  |            |       | 79                     |   |      
|                             | Gain on divestiture                               |            |       | 69                     |   |      
|                             | Deposit from sale of First Avenue properties      |            |       | 50                     |   |      
|                             | Refundable energy costs                           |            |       | 27                     |   |      
|                             | Accrued electric rate reduction                   |            |       | 38                     |   |      
|                             | DC service incentive                              |            |       | 35                     |   |      
|                             | Transmission congestion contracts                 |            |       | 125                    |   |      
|                             | Gas rate plan - World Trade Center recovery       |            |       | 36                     |   |      
|                             | Electric excess earnings                          |            |       | 55                     |   |      
|                             | Other                                             |            |       | 277                    |   |      
|                            
|Total Regulatory Liabilities |                                                   | $          | 898   |                        | $ | 891  
|                            

22

---

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 Con Edison of
New York and O&R 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 impose joint and several liabilities, regardless of fault, upon generators of
hazardous substances for removal and remediation costs (which include costs of investigation, demolition, removal, disposal, storage, replacement, containment and monitoring) and environmental
damages. Liabilities 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
Con Edison of New York or O&R 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 neither Con Edison of New York nor O&R are managing the site investigation and remediation, the accrued Superfund
Sites liability represents an estimate of the amount Con Edison of New York or O&R will need to pay to settle its obligations with respect to the site. For the other Superfund Sites (including the
manufactured gas sites), which Con Edison of New York or O&R manage, the accrued Superfund Sites liability represents an estimate of their undiscounted cost to investigate and remediate each of the
sites in light of the information available about the site, applicable remediation standards and experience with similar sites.

Con
Edison of New York and O&R are permitted under their current rate agreements to defer as regulatory assets (for subsequent recovery through rates) certain site investigations and remediation
costs. At March 31, 2003, the accrued liabilities and regulatory assets related to Superfund Sites for each of the Companies were as follows:

|                     |                                 | Con Edison |    | Con Edison of New York |     | O&R
|-------------------- | ------------------------------- | ---------- | -- | ---------------------- | --- | ---
|
|
|Accrued liabilities: |                                 |            |    |                        |     |    
|                     | Manufactured gas plant sites    |            | $  | 105                    |     | $  
|                     | Other Superfund Sites and other |            |    | 35                     |     |    
|                    
|                     |                                 | Total      |    | $                      | 140 |    
|                    
|Regulatory assets    |                                 | $          | 90 |                        | $   | 58 
|                    

Most
of the accrued Superfund Site liability relates to Superfund Sites that have been investigated, in whole or in part. As investigation progresses 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 to the financial position, results of operations or liquidity of each of the Companies.

In
2002, Con Edison of New York estimated that for its manufactured gas sites, many of which had not been investigated, its aggregate undiscounted potential liability for the investigation and
remediation of

23

---

coal
tar and/or other manufactured gas plant-related environmental contaminants could range from approximately $65 million to $1.1 billion. For O&R's manufactured gas sites, estimates of
the aggregate undiscounted potential liability for the cleanup of coal, tar and/or other manufactured gas plant-related environmental contaminants range from approximately $25 million to
$95 million. These estimates were based upon 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 Con Edison of New York and O&R 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. In 2002, Con Edison of New
York estimated that its aggregate undiscounted potential liability for these suits and additional such suits that may be
brought over the next 50 years is estimated to range 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.

Workers'
compensation administrative proceedings have been commenced, wherein current and former employees claim benefits based upon alleged disability from exposure to asbestos. Con Edison of New
York is permitted under its current rate agreement to defer as regulatory assets (for subsequent recovery through rates), liabilities incurred for its asbestos lawsuits and workers' compensation
claims. O&R also defers as regulatory assets (for subsequent recovery through rates), liabilities incurred for its asbestos lawsuits.

At
March 31, 2003, 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 were as follows:

|                                          |  | Con Edison |     | Con Edison of New York |   | O&R
|----------------------------------------- |  | ---------- | --- | ---------------------- | - | ---
|
|
|Accrued liability - asbestos suits        |  | $          | 39  |                        | $ | 38 
|Regulatory asset - asbestos suits         |  | $          | 39  |                        | $ | 38 
|                                         
|Accrued liability - workers' compensation |  | $          | 129 |                        | $ | 125
|Regulatory asset - workers' compensation  |  | $          | 54  |                        | $ | 54 
|                                         

Clean Air (Con Edison and O&R)

In May 2000, the New York State Department of Environmental Conservation issued notices of violation to O&R and other companies that have operated
coal-fired electric generating facilities in New York State. The notices allege violations of the Federal Clean Air Act and the New York State

24

---

Environmental
Conservation Law resulting from the alleged failure to install pollution control equipment that would have reduced emissions of certain chemicals deemed potentially hazardous. The notice
of violations received by O&R relates to the Lovett Generating Station, which it sold in June 1999. O&R is unable to predict whether or not the alleged violations will have a material adverse
effect on its financial position, results of operations or liquidity.

Note E - Nuclear Generation (Con Edison and Con Edison of New York)

In September 2001, Con Edison of New York completed the sale of its nuclear generating facilities. See Note I to the Con Edison and Con Edison of
New York financial statements in Item 8 of the Form 10-K.

The
New York State Public Service Commission is investigating a February 2000 to January 2001 outage of the nuclear generating unit, its causes and the prudence of Con Edison of New
York's actions regarding the operation and maintenance of the generating unit. The proceeding covers, among other things, Con Edison of New York's inspection practices, the circumstances surrounding
prior outages, the basis for postponement of the unit's steam generator replacement and whether,
and to what extent, increased replacement power costs and repair and replacement costs should be borne by Con Edison's shareholders.

Con
Edison of New York has not billed to customers $90 million of replacement power costs incurred during the outage. In addition, in 2000, Con Edison of New York accrued a $40 million
liability for the possible disallowance of replacement power costs that it had previously recovered from customers.

Neither
Con Edison nor Con Edison of New York is able to predict whether or not any proceedings, lawsuits, legislation or other actions relating to the nuclear generating unit will have a material
adverse effect on its financial position, results of operations or liquidity.

Note F - Northeast Utilities Litigation (Con Edison)

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, 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 Con Edison's amended complaint 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

25

---

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. 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 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. It is expected that both parties will be filing further pre-trial motions that could potentially affect the issues that will be presented at trial. A date for trial has not been
set.

Con
Edison believes that Northeast Utilities has materially breached the merger agreement, and that Con Edison has not materially breached the merger agreement. Con Edison believes it is not obligated
to acquire Northeast Utilities because Northeast Utilities does 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 G - Other Material Contingencies (Con Edison)

For information about contingencies relating to a dispute between the construction contractor for Con Edison Development's 525 MW electric generating facility
in Newington, New Hampshire and the Internal Revenue Service's proposed disallowance of certain tax losses recognized in connection with transactions in which unregulated subsidiaries of Con Edison
leased property and then immediately subleased it back to the lessor (termed "Lease In/Lease Out," or LILO transactions), see Notes J and S to the Con Edison financial statements in Item 8 of the
Form 10-K.

Note H - Derivative Instruments and Hedging Activities

Reference is made to Note O to both the Con Edison and Con Edison of New York financial statements, and Note N to the O&R financial statements in
Item 8 of the Form 10-K.

26

---

Energy Price Hedging

Con Edison and Con Edison's subsidiaries use derivative instruments to hedge market price fluctuations in related underlying transactions for the physical
purchase or sale of electricity and gas. As of March 31, 2003, the net fair value of the derivatives for such use was as follows:

|                         |  | Con Edison |    | Con Edison of
New York |   | O&R
|------------------------ |  | ---------- | -- | ---------------------- | - | ---
|
|
|Fair value of net assets |  | $          | 34 |                        | $ | 12 
|                        

Con
Edison of New York, Con Edison Solutions and Con Edison Energy use cash flow hedge accounting under SFAS No. 133. Under cash flow hedge accounting, to the extent a hedge is determined to be
"effective," the mark-to-market unrealized gain or loss on the hedge is recorded in other comprehensive income (OCI) and reclassified to income at the time the underlying
transaction is completed. Any gain or loss relating to any portion of the hedge determined to be "ineffective" is recognized in income in the period in which such determination is made. For Con Edison
and Con Edison of New York, unrealized gains and losses on cash flow hedges for energy transactions, net of tax, included in accumulated OCI for the three months ended March 31, 2003 and 2002
were as follows:

|                                                                                         |  | Con Edison |    | Con Edison of New York
|---------------------------------------------------------------------------------------- |  | ---------- | -- | ----------------------
|
|
|
|
|Unrealized gains/(losses) on derivatives qualified as hedges net of taxes                |  | $          | 13 |                       
|Less: Reclassification adjustment of gains/(losses) included in net income, net of taxes |  |            | 11 |                       
|                                                                                        
|Unrealized gains/(losses) on derivatives qualified as hedges for the period              |  | $          | 2  |                       
|                                                                                        

Con
Edison recognized in income unrealized mark-to-market pre-tax net gains of $0 million and $3 million relating to hedge ineffectiveness at Con
Edison Solutions for the three months ended March 31, 2003 and 2002, respectively.

As
of March 31, 2003, the maximum remaining terms of Con Edison's, Con Edison of New York's and O&R's contracts were less than three years, one year and three years, respectively. Con Edison
and Con Edison of New York estimate that $15 million and $1 million, respectively, of after-tax net gains accumulated in OCI as of March 31, 2003 will be reclassified
to income within the next 12 months.

Con
Edison's unregulated subsidiaries also enter into certain other contracts that are derivatives, but do not qualify for hedge accounting under SFAS No. 133. Changes in fair market value of
these derivative contracts are recorded in income in the reporting period in which they occur and were immaterial to the results of operations of the unregulated subsidiaries for the periods ending
March 31, 2003 and 2002.

27

---

Interest Rate Hedging

Con Edison's subsidiaries use interest rate swaps to manage interest rate exposures associated with debt. As of March 31, 2003, the fair value of the
interest rate swaps was as follows:

|                                  |  | Con Edison |     | Con Edison of
New York |   | O&R | 
|--------------------------------- |  | ---------- | --- | ---------------------- | - | --- | 
|
|
|Fair value of interest rate swaps |  | $          | (22 | )                      | $ | 6   | 
|                                  | 

Con
Edison of New York's swap is designated as a fair value hedge, which qualifies for "short-cut" hedge accounting under SFAS No. 133. Under this method, changes in fair value of
the swap are recorded directly against the carrying value of the hedged bonds and have no impact on earnings.

Con
Edison Development and O&R's swaps are designated as cash flow hedges under SFAS No. 133. Unrealized gains and losses on these cash flow hedges, net of tax, included in accumulated OCI for
the three months ended March 31, 2003 and 2002 were as follows:

|                                                                                          |  | Con Edison |   | O&R
|----------------------------------------------------------------------------------------- |  | ---------- | - | ---
|
|
|
|Unrealized gains/(losses) on derivatives qualified as hedges, net of taxes                |  | $          |  |    
|Less: Reclassification adjustment for gains/(losses) included in net income, net of taxes |  |            |  |    
|                                                                                         
|Unrealized gains/(losses) on derivatives qualified as hedges for the period               |  | $          |  |    
|                                                                                         

As
of March 31, 2003, the accumulated OCI related to Con Edison's and O&R's interest rate swaps amounted to after-tax losses of $17 million and $11 million,
respectively, of which $4 million and $1 million, respectively, is expected to be reclassified to income within the next 12 months. The reclassification to income has no impact on
O&R's results of operations. These costs are currently recovered in rates.

Energy Trading Activities

Unregulated subsidiaries of Con Edison engage in energy trading activities that are accounted for at fair value. For the three months ended March 31,
2003, energy-trading contracts have been marked to market in accordance with SFAS No. 133 and Emerging Issues Task Force (EITF) Issue No. 02-3. For the corresponding period
in 2002, these contracts were accounted for under EITF Issue No. 98-10, which was rescinded in October of 2002.

The
fair value of energy trading net assets as of March 31, 2003 and 2002 was $9 million and $16 million, respectively.

Note I - Financial Information By Business Segment

The business segments of each of the Companies were determined based on similarities in economic characteristics, the regulatory environment, and management's
reporting requirements.

Con
Edison's principal business segments are Con Edison of New York's regulated electric, gas and steam utility activities, O&R's regulated electric and gas utility activities and other operations,
Con Edison's

28

---

unregulated
subsidiaries and other (parent holding company revenues, interest and other expenses and consolidation adjustments). Con Edison of New York's principal business segments are its regulated
electric, gas and steam utility activities. O&R's principal business segments are its regulated electric and gas utility activities and other operations. Reference is made to "Con Edison" at the
beginning of the notes to each of the Companies' financial statements included in Item 8 of the Form 10-K for a description of the segments.

All
revenues of these business segments, excluding revenues earned by Con Edison Development on certain energy infrastructure projects, which are deemed to be immaterial, are from customers located in
the United States of America. Also, all assets of the business segments, excluding certain investments in energy infrastructure projects by Con Edison Development ($202 million at
March 31, 2003), are located in the United States of America. The accounting policies of the segments are the same as those described in Note A to financial statements of each of the
Companies, included in Item 8 of the Form 10-K.

Common
services shared by the business segments are assigned directly or allocated based on various cost factors, depending on the nature of the service provided.

29

---

The
financial data for the business segments are as follows:

|                             |          | For the Three Months Ended March 31, 2003
|---------------------------- | -------- | -----------------------------------------
|
|
|
|Con Edison of New York       |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Steam    |                                          
|                            
|Total Con Edison of New York |          | $                                        
|                            
|O&R                          |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                            
|Total O&R                    |          | $                                        
|                            
|Unregulated subsidiaries     |          | $                                        
|Other                        |          |                                          
|                            
|Total Con Edison             |          | $                                        
|                            

|                             |          | For the Three Months Ended March 31, 2002
|---------------------------- | -------- | -----------------------------------------
|
|
|
|Con Edison of New York       |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Steam    |                                          
|                            
|Total Con Edison of New York |          | $                                        
|                            
|O&R                          |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                            
|Total O&R                    |          | $                                        
|                            
|Unregulated subsidiaries     |          | $                                        
|Other                        |          |                                          
|                            
|Total Con Edison             |          | $                                        
|                            

The
Con Edison business segment financial information shown above is presented differently than it was in Note N to the Con Edison financial statements in Item 8 of the
Form 10-K where its regulated electric and gas utility operations were presented as separate segments by aggregating the regulated electric and gas operations of Con Edison of New
York and O&R. SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" permits, but does not require, Con Edison to aggregate such operations. Con Edison has now
determined to no longer aggregate such operations and instead, as

30

---

shown
above, will separately present such operations. On this basis of presentation, the Con Edison business segment financial information for 2002, 2001 and 2000 is as follows:

|                             |          | For the 12 Months Ended December 31, 2002
|---------------------------- | -------- | -----------------------------------------
|
|
|
|Con Edison of New York       |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Steam    |                                          
|                            
|Total Con Edison of New York |          | $                                        
|                            
|O&R                          |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Other    |                                          
|                            
|Total O&R                    |          | $                                        
|                            
|Unregulated subsidiaries     |          | $                                        
|Other                        |          |                                          
|                            
|Total Con Edison             |          | $                                        
|                            

|                             |          | For the 12 Months Ended December 31, 2001
|---------------------------- | -------- | -----------------------------------------
|
|
|
|Con Edison of New York       |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Steam    |                                          
|                            
|Total Con Edison of New York |          | $                                        
|                            
|O&R                          |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Other    |                                          
|                            
|Total O&R                    |          | $                                        
|                            
|Unregulated subsidiaries     |          | $                                        
|Other                        |          |                                          
|                            
|Total Con Edison             |          | $                                        
|                            

31

---

|                             |          | For the 12 Months Ended December 31, 2000
|---------------------------- | -------- | -----------------------------------------
|
|
|
|Con Edison of New York       |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Steam    |                                          
|                            
|Total Con Edison of New York |          | $                                        
|                            
|O&R                          |          |                                          
|                             | Electric |                                          
|                             | Gas      |                                          
|                             | Other    |                                          
|                            
|Total O&R                    |          | $                                        
|                            
|Unregulated subsidiaries     |          | $                                        
|Other                        |          |                                          
|                            
|Total Con Edison             |          | $                                        
|                            

Note J - Guarantees (Con Edison)

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 $1.3 billion at
March 31, 2003 of which $640 million was outstanding. Management believes the likelihood that Con Edison would be required to perform with respect to these guarantees is remote.

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

|                           |  | Maximum Amount
|-------------------------- |  | --------------
|
|
|
|Commodity Transactions     |  | $             
|Newington Lease Agreement  |  |               
|Affordable Housing Program |  |               
|Intra-company Guarantee    |  |               
|Other                      |  |               
|                          
|TOTAL                      |  | $             
|                          

Commodity Transactions -Con Edison guarantees payments on behalf of its subsidiaries in order to
facilitate physical and financial transactions in gas, pipeline capacity, transportation, oil, electricity and related commodity services. In addition, a Con Edison Development subsidiary guaranteed
payment for fuel oil purchases by a foreign generating project in which it has an equity interest. To the extent that liabilities exist under the contracts subject to these guarantees, such
liabilities are included in the consolidated balance sheet.

Newington Lease Agreement -Con Edison guarantees the payment and performance obligations of a Con Edison Development subsidiary. See
Note S to the Con Edison financial statements in Item 8 of the Form 10-K.

32

---

Affordable Housing Program -Con Edison Development guarantees the repurchase and remarketing obligations of one of its subsidiaries with respect
to the debt ($56.7 million, including interest) relating to moderate-income rental apartment properties eligible for tax credits under Section 42 of the Internal Revenue Code. In
accordance with EITF Issue No. 94-01, "Accounting for Tax Benefits Resulting from Investments in Affordable Housing Projects," neither the rental apartment properties nor the
related indebtedness is included on Con Edison's consolidated balance sheet.

Intra-company Guarantee -Con Edison has issued a guarantee on behalf of Con Edison Communications to Con Edison of New York for payment
obligations relating to the use of space in the latter's facilities and the construction of new telecommunications underground facilities.

Other -Con Edison, Con Edison Development and its subsidiaries also guarantee the following:



Note K - Related Party Transactions (Con Edison of New York and O&R)

Reference is made to Note M to the Con Edison of New York financial statements, and Note I to the O&R financial statements, in Item 8 of the
Form 10-K.

The
costs of administrative and other services 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, 2003 and 2002 were
as follows:

|                          |  | Con Edison of New York |   | O&R
|------------------------- |  | ---------------------- | - | ---
|
|
|
|
|Cost of Services Provided |  | $                      | 8 |    
|Cost of Services Received |  | $                      | 6 |    
|                         

In addition, O&R purchased from Con Edison of New York $52 million and $26 million of natural gas and $1 million and $7 million of
electricity for the three months ended March 31, 2003 and 2002, respectively.

Note L - New Financial Accounting Standards

In January 2003, Financial Accounting Standards Board (FASB) issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46).
For discussion on FIN 46, see Note S, Note Q and Note O, respectively, to the Con Edison, Con Edison of New York and O&R financial statements included in Item 8 of the
Form 10-K.

In
January 2003, the Companies adopted SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires entities to record the fair value of a liability associated with an
asset retirement

33

---

obligation
in the period incurred. When the liability is initially recorded, the entity will capitalize the cost by increasing the amount of the related asset. The liability will be increased to its
present value each period and the capitalized cost will be depreciated over the useful life of the related asset. Upon retirement of the asset, the entity will settle the obligation for the amount
recorded or incur a gain or loss. The adoption of SFAS No. 143 did not have a material impact on Companies' financial position, results of operations or liquidity. Con Edison of New York and
O&R generally compute annual charges for depreciation using the straight-line method for financial statement purposes, with rates based on average service lives and net removal costs
(removal costs less salvage value). At March 31, 2003 the estimated net removal costs included in accumulated depreciation were $764 million and $41 million for Con Edison of New
York and O&R, respectively.

In
April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This Statement amends and clarifies financial accounting and
reporting for derivative instruments. SFAS 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30,
2003. The Companies have not yet determined the impact of this standard, if any, on their financial position, results of operations or liquidity.

34

---



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
discussion and analysis relates to the consolidated financial statements of 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) in Part I, Item 1 of this report. This discussion and analysis should be read in conjunction with these financial
statements and the notes thereto and Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A), Con Edison of New York's MD&A and O&R's Management's
Narrative Discussion of Results of Operations (O&R Narrative) in Item 7 of the combined Con Edison, Con Edison of New York and O&R Annual Reports on Form 10-K for the year ended
December 31, 2002 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K). Con Edison of New York and O&R, which are regulated utilities,
are subsidiaries of Con Edison, and together with Con Edison are referred to in this MD&A as "the Companies."

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.

Information
in the notes to the consolidated financial statements referred to in this discussion and analysis 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 discussion and analysis the information to which reference is made.

CORPORATE OVERVIEW

Con Edison's principal business operations are those of its regulated utility subsidiaries, Con Edison of New York and O&R. Con Edison also has unregulated
subsidiaries that compete in energy-related and telecommunication businesses.

|                         |                           | Three months ended March 31, 2003 |       | At March 31, 2003 |     
|------------------------ | ------------------------- | --------------------------------- | ----- | ----------------- | ----
|
|
|
|
|Con Edison of New York   |                           | $                                 | 2,150 |                   | 83.7
|O&R                      |                           |                                   | 201   |                   | 7.8 
|                         |                          
|                         | Total regulated utilities |                                   |       | 2,351             |     
|                         |                          
|Unregulated subsidiaries |                           |                                   | 219   |                   | 8.5 
|Other                    |                           |                                   |      |                   |    
|                         |                          
|                         | Total Con Edison          |                                   | $     | 2,570             |     
|                         |                          

Con Edison's net income for common stock for the three months ended March 31, 2003 was $154 million or $0.72 a share compared with earnings of
$146 million, after the cumulative effect of a change in accounting principle, or $0.68 a share for the three months ended March 31, 2002. See "Results of Operations - Summary,"
below. For additional segment financial information, see Note I to the financial statements included in Part I, Item1 and "Results of Operations," below.

35

---

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 from other suppliers through their retail access programs. The utilities continue to supply
energy to most of their customers 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.

The
utilities have agreements that cover the rates they can charge their customers. Con Edison of New York's electric rate agreement ends March 2005 and its gas and steam rate agreements end in
September 2004. The O&R rate agreements are for various periods. The rate agreements generally require the utilities to share with customers earnings in excess of specified rates of return on
equity. With limited exceptions, rates charged customers pursuant to these agreements may not be changed during the respective terms of these agreements. However, in accordance with provisions
approved by state regulators, the utilities generally recover from customers on a current basis the costs they prudently incur for energy purchased for them. See "Rate and Restructuring Agreements"
and "Recoverable Energy Costs" in each of the Companies' Note A to their financial statements in Item 8 of the Form 10-K.

The
utilities have experienced increased energy sales and transportation volumes in recent years. Such increases are reflected in operating income (except to the extent that a weather-normalization
provision applies to the gas business). In June, July and August of 2002, Con Edison of New York set a new three-month electric delivery record of more than 17 million megawatt hours and
experienced five of its 10 highest electric peak load days. In addition, the company's 10 highest winter electric peak loads all occurred during the 2002-2003 winter. The utilities have
increased their construction expenditures to meet increased customer demand and reliability needs. See "Capital Requirements" in the Con Edison and Con Edison of New York MD&A in Item 7 of the
Form 10-K.

Accounting
policies for the 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.

UNREGULATED BUSINESSES

Con Edison's four unregulated subsidiaries participate in competitive businesses and are subject to different risks than the regulated utility subsidiaries. At
March 31, 2003, Con Edison's investment in its

36

---

unregulated
subsidiaries was $758 million and the unregulated subsidiaries' assets amounted to $1.3 billion. Con Edison expects to include $353 million of non-utility
plant and long-term debt and other liabilities related to Con Edison Development's Newington project on its consolidated balance sheet upon adoption of the Financial Accounting Standards
Board Interpretation No. 46, "Consolidation of Variable Interest Entities" in 2003. See Note S to the Con Edison financial statements in Item 8 of the Form 10-K.

Consolidated
Edison Solutions, Inc. (Con Edison Solutions) sells electricity, gas and energy-related services to delivery customers of Con Edison of New York, O&R and other utilities. At
March 31, 2003, the company serves approximately 33,000 electric customers with an estimated aggregate annual load of 1,100 MW of electricity. The company's gross margins (operating revenues
less fuel, purchased power and gas purchased for resale) on energy sales are expected to decrease in 2003, compared to 2002, as a result of increased competition for its largest customers and higher
energy prices.

Consolidated
Edison Development, Inc. (Con Edison Development) owns and operates generating plants and energy and other infrastructure projects. At March 31, 2003, the company owned
interests in electric generating facilities with an aggregate capacity of 588 MW and had under construction additional generating facilities with an aggregate capacity of 665 MW of capacity. In
addition, the company has an operating lease arrangement for a 525 MW generating facility that reached substantial completion in the fourth quarter of 2002. The electricity produced from these
facilities will be sold under contract or on the wholesale electricity markets.

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 supplies an estimated 300 MW of electric load (including capacity, energy, ancillary services and transmission) to a utility in New Jersey for basic generation service under a
contract that expires in July 2003 and has agreed to supply an estimated 600 MW of such
service to other New Jersey utilities (including 100 MW for a regulated utility subsidiary of O&R) for the period August 2003 through May 2004, and an additional 400 MW to unaffiliated
New Jersey utilities for the period August 2003 through May 2006. The company also provides risk management services to Con Edison Solutions, Con Edison Development and 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, 2003 amounted to $145 million, net of accumulated depreciation) include network facilities and approximately 373 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. The company, incorporated in 1997, began providing services to customers in 2001.
During its start-up phase and currently, the company has incurred operating losses.

37

---

RESULTS OF OPERATIONS - SUMMARY

The Companies' earnings per share for the three months ended March 31, 2003 was $0.72 ($0.72 on a diluted basis) as compared to $0.68, after the
cumulative effect of a change in accounting principle, ($0.68 on a diluted basis) for the 2002 period.

Earnings
for the three months ended March 31, 2003 and 2002 were as follows:

|                         |  | 2003 |     | 2002 |  
|------------------------ |  | ---- | --- | ---- | -
|
|
|Con Edison of New York   |  | $    | 138 |      | $
|O&R                      |  |      | 16  |      |  
|Unregulated Subsidiaries |  |      | (1  | )    |  
|Other*                   |  |      | 1   |      |  
|                         | 
|Con Edison               |  | $    | 154 |      | $
|                         | 

* Includes parent company and inter-company accounting.

** Includes a charge for the cumulative effect of a change in accounting principles for goodwill impairment of certain
unregulated generating assets totaling $20 million after tax.

The Companies' earnings for the three months ended March 31, 2003 were $8 million higher than the 2002 period reflecting the following factors
(after tax, in millions):

|Con Edison of New York:                                     |                                                                                                      |  |    |    
|----------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- |  | -- | ---
|                                                            | Impact of cold winter weather in 2003 on net revenues versus
mild winter weather in 2002 (estimated) |  | $  | 29 
|                                                            | Sales growth from factors other than weather (estimated)                                             |  |    | 12 
|                                                            | Reduced net credit for pensions & other postretirement benefits                                      |  |    | (17
|                                                            | Regulatory accounting/amortizations                                                                  |  |    | (18
|                                                            | Higher depreciation and property tax expense                                                         |  |    | (6 
|                                                            | Amortization of divestiture gain in 2002                                                             |  |    | (13
|Orange and Rockland Utilities                               |                                                                                                      |  | 4  |    
|Unregulated businesses                                      |                                                                                                      |  | (5 | )  
|Cumulative effect of change in accounting principle in 2002 |                                                                                                      |  | 20 |    
|Other                                                       |                                                                                                      |  | 2  |    
|                                                            |                                                                                                     
|                                                            | Total                                                                                                |  | $  | 8  
|                                                            |                                                                                                     

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 utility subsidiaries and accounting for pensions and other
postretirement benefits, contingencies, derivative instruments, goodwill and leases. See "Application of Critical Accounting Policies" in the Con Edison and Con Edison of New York MD&A and the O&R
Narrative in Item 7 of the Form 10-K.

Con
Edison's critical accounting policies also include SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which, among other things, requires that all
long-lived assets be tested for impairment upon the occurrence of certain circumstances. A critical element of the impairment test is a forecast of cash flows to be generated from the use
or sale of the assets tested for impairment. Actual

38

---

cash
flows might be materially different from those forecasted and forecasted cash flows are subject to revision. To forecast cash flows, each of the Companies is required to make complex judgments
about future operations. These judgments are particularly difficult to make with respect to operations in evolving industries such as the energy-related and telecommunications businesses in which Con
Edison's unregulated subsidiaries participate. The Companies' most recent tests for impairment did not identify any impairment of their assets under SFAS No. 144. See Notes T, Q and O,
respectively, to the Con Edison, Con Edison of New York and O&R financial statements in Item 8 of the Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

The Companies' liquidity reflects cash flows from operating, investing and financing activities, as shown on the respective consolidated statement of cash flows
included in Part I, Item 1 of this report. See "Liquidity and Capital Resources" in the Con Edison and Con Edison of New York MD&A in Item 7 of the Form 10-K. Changes in the
Companies' cash and temporary cash investments resulting from operating, investing and financing activities during the three months ended March 31, 2003 and 2002 are summarized as follows:

|                                                     |            | Con Edison |      | Con Edison of
New York |   | O&R  |     
|---------------------------------------------------- | ---------- | ---------- | ---- | ---------------------- | - | ---- | ----
|
|
|
|Operating activities                                 |            | $          | (54  | )                      | $ | 146  |     
|Investing activities                                 |            |            | (333 | )                      |   | (333 | )   
|Financing activities                                 |            |            | 333  |                        |   | (78  | )   
|                                                     |           
|                                                     | Net change |            |      | (54                    | ) |      | (265
|                                                     |           
|Balance at beginning of period                       |            |            | 132  |                        |   | 359  |     
|                                                     |           
|Balance at end of period (including restricted cash) |            | $          | 78   |                        | $ | 94   |     
|                                                     |           

Cash flows used in operating activities of each of the Companies in the three months ended March 31, 2003, as compared to the 2002 period, reflect
increased accounts receivable, deferred recoverable energy costs and accounts payable. These increases resulted from higher electric, gas and steam sales for Con Edison of New York, higher electric
and gas sales for O&R and higher fuel and purchased power unit costs during the colder than normal first quarter 2003. In general, changes in Con Edison of New York's and O&R's cost of purchased
power, fuel and gas affect the timing of cash flows but not net income because, in accordance with provisions approved by state
regulators, the utilities generally recover from customers the costs they prudently incur for energy purchased for their customers. See "Rate and Restructuring Agreements" and "Recoverable Energy
Costs" in each of the Companies' Note A to their financial statements in Item 8 of the Form 10-K.

The
reconciliation of income to determine cash flows from operating activities for each of the Companies in the three months ended March 31, 2003, as compared with the 2002 period is also
impacted by changes in non-cash items. Non-cash items included decreased accrued pension credits (resulting from past investment performance and a reduction for 2003 in the
assumption for future performance) and increased depreciation and amortization (resulting from higher plant balances) and increased deferred

39

---

income
tax (resulting primarily from increased current tax deductions for deferred fuel costs and other items).

Cash
flows used in investing activities of each of the Companies reflect increased utility construction expenditures and, for Con Edison, also reflect decreased construction expenditures of its
unregulated subsidiaries.

Cash
flows from financing activities of each of the Companies reflect increased commercial paper issuance (shown on the consolidated balance sheets in Part I, Item 1 of this report as "Notes
payable"). The amounts outstanding at March 31, 2003 for Con Edison, Con Edison of New York and O&R were $632 million, $432 million and $34 million, respectively. The
weighted average yield for the commercial paper is 1.3 percent for the Companies.

Cash
flows from financing activities also reflect that in January 2003, Con Edison of New York redeemed $275 million of 7.75 percent 35-year, Series 1996A,
Subordinated Deferrable Interest Debentures. In March 2003, O&R redeemed $35 million of 6.560 percent 10-year, Series 1993D Debentures. In April 2003,
Con Edison of New York issued $175 million 5.875 percent 30-year Series 2003A Debentures. Also, during the 2003 period, Con Edison issued approximately 500,000 shares
of its common stock under its dividend reinvestment and employee stock plans. Con Edison's Board of Directors has adopted and, at its scheduled May 19, 2003 annual meeting, its shareholders
will consider approval of a new
Long-Term Incentive Plan under which up to ten million shares of its common stock may be issued. The ten million shares authorized under Con Edison's 1996 Stock Option plan have been
nearly fully allocated.

The
following table shows variations in certain significant line items on the Companies' consolidated balance sheets at March 31, 2003, compared with December 31, 2002, that have also
impacted specific line items within the Companies' consolidated statements of cash flows for the three months ended March 31, 2003.

|                                                                          |  | Con Edison
2003 vs. 2002
Variance |     | Con Edison of New York
2003 vs. 2002
Variance |   | O&R
2003 vs. 2002
Variance |  
|------------------------------------------------------------------------- |  | --------------------------------- | --- | --------------------------------------------- | - | -------------------------- | -
|
|
|Accounts receivable - customer, less allowance for uncollectible accounts |  | $                                 | 189 |                                               | $ | 159                        |  
|Regulatory assets - recoverable energy costs                              |  |                                   | 85  |                                               |   | 77                         |  
|Prepayments                                                               |  |                                   | 164 |                                               |   | 166                        |  
|Accounts payable                                                          |  |                                   | 101 |                                               |   | 85                         |  
|Accrued taxes                                                             |  |                                   | (96 | )                                             |   | (89                        | )
|Regulatory liability - electric excess earnings                           |  |                                   | 15  |                                               |   | 15                         |  
|                                                                          | 

Accounts receivable - customers, less allowance for uncollectible accounts, regulatory assets -recoverable energy cost and accounts payable
increased due primarily to higher electric, gas and steam sales for Con Edison of New York and higher electric and gas sales for O&R, and higher fuel and purchased power unit costs during the colder
than normal first quarter 2003. The higher energy sales and unit energy purchase costs are discussed below under "Results of Operations." In accordance with provisions approved by state regulators,
the utilities generally recover from customers the costs they prudently incur

40

---

for
energy purchased for their customers. See "Rate and Restructuring Agreements" and "Recoverable Energy Costs" in of the Companies' Note A to their financial statements in Item 8 of the
Form 10-K.

Con
Edison of New York's and O&R's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable were 27.3 days and 23.8 days, respectively, for the 12 months
ended March 31, 2003, compared with 29.0 days and 34.1 days, respectively, for the 12 months ended March 31, 2002.

Prepayments
for Con Edison of New York increased at March 31, 2003 as compared with year-end 2002 due primarily to the unamortized portion of property taxes paid in
January 2003. Property taxes are generally prepaid in January and July of each year and amortized to expense over a six-month period.

Accrued
taxes for Con Edison of New York decreased at March 31, 2003 as compared with year-end 2002. This decrease is due primarily to the payment of the final federal and state
income tax installments for the 2002 tax year and lower taxable income.

Electric
excess earnings for Con Edison of New York increased at March 31, 2003 as compared with year-end 2002. This amount is an addition to a reserve established in 2002 for the
rate year ended March 31, 2003 for earnings in excess of a specified rate of return in accordance with Con Edison of New York's 2000 Electric Rate Agreement. As of March 31, 2003, the
total electric excess earnings reserve was $55 million. See "Rate and Restructuring Agreements" in Note A to the Con Edison of New York financial statements included in Item 8 of the
Form 10-K.

Capital
Resources and Requirements

Con Edison has registered $500 million of securities, including debt, preferred stock and common stock, for sale under the Securities Act of 1933
pursuant to a Registration Statement on Form S-3. The company is considering selling common stock in the near term.

In
August 2002, President Bush signed into law an appropriations bill that authorizes funds, for which Con Edison of New York is eligible to apply, to recover costs it incurred in connection
with the attack on the World Trade Center. The procedural guidelines for disbursement of the federal funds are in the process of being developed. See Note Q to the Con Edison financial
statements and Note P to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

For
each of the Companies, the ratio of earnings to fixed charges (Securities and Exchange Commission basis) for the three months and 12 months ended March 31, 2003 and the years ended
December 31, 2002, 2001, 2000, 1999 and 1998 were:

|                       |  | Earnings to Fixed Charges
|---------------------- |  | -------------------------
|
|
|
|
|Con Edison             |  | 3.1                      
|Con Edison of New York |  | 3.2                      
|O&R                    |  | 5.4                      
|                      

41

---

For each of the Companies, the common equity ratio as of March 31, 2003 and the years ended December 31, 2002, 2001 and 2000 were:

|                       |  | Common Equity Ratio
|---------------------- |  | -------------------
|
|
|
|
|
|Con Edison             |  | 49.0               
|Con Edison of New York |  | 47.5               
|O&R                    |  | 54.3               
|                      

The commercial paper of the Companies is rated P-1, A-1 and F-1, 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 Con Edison of New York and O&R, 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. Moody's, S&P and Fitch are each completing a review of their ratings of the Companies' securities. Based upon preliminary indications, the Companies expect that the only changes
to the ratings will be that S&P will change its ratings of Con Edison's and the utility subsidiaries' unsecured debt to A- and A, respectively.

Contractual
Obligations and Commercial Commitments

At March 31, 2003, there was no material change in the Companies' contractual obligations and commercial commitments compared to those disclosed in
"Contractual Obligations and Commercial Commitments" in the Con Edison and Con Edison of New York MD&A in Item 7 of the Form 10-K, other than long-term debt transactions
described above and the capacity and energy purchase agreements described in the "Electric Power Requirements" below.

ELECTRIC POWER REQUIREMENTS

At March 31, 2003, there was no material change in the Companies' electric power requirements compared to those discussed in "Electric Power
Requirements" in the Con Edison and Con Edison of New York MD&A in Item 7 of the Form 10-K, other than as described in the following two paragraphs.

In
February 2003, Con Edison Energy agreed to supply an estimated 600 MW of electric load to New Jersey utilities (including 100 MW for a regulated subsidiary of O&R) for the period
August 2003 through May 2004 and an additional 400 MW to unaffiliated New Jersey utilities for the period August 2003 through May 2006. Con Edison Energy has entered into
contracts in connection with its supply obligations. At March 31, 2003, Con Edison Energy's contractual obligations to make payments for electric and gas purchases amounted to
$195 million of which $118 million will be due within one year and the balance due within one to three years.

In
April 2003, Con Edison of New York agreed to purchase 500 MW of electricity annually for ten years from a plant in Queens County, New York that is scheduled to be completed in
May 2006. Con Edison of New York's total contractual obligations to make payments for purchases of electricity under long-term contracts at April 30, 2003, including this
contract, amounted to $10.0 billion of which

42

---

$0.6 billion
will be due within one year, $1.3 billion within one to three years, $1.3 billion between four and five years and the balance due after 5 years.

REGULATORY MATTERS

At March 31, 2003, there was no material change in the Companies' regulatory matters compared to those disclosed under "Regulatory Matters" in the Con
Edison and Con Edison of New York MD&A in Item 7 in the Form 10-K and in "Rate and Restructuring Agreements and Recoverable Energy Costs" in Note A to the O&R financial
statements in Item 8 of the Form 10-K, other than as described in the following paragraphs.

In
March 2003, an Administrative Law Judge issued a Recommended Decision in the ongoing statewide proceeding to consider issues related to the "unbundling" of electric and gas utility rates,
that is, the pricing of specific services provided by the utilities to their customers, in light of the ability of such customers to purchase a portion of these services (i.e., electric energy and
gas, at retail) from competitive suppliers. See "Con Edison of New York - Regulation" in Part 1 of the Form 10-K. If adopted by the New York State Public Service
Commission (PSC), the recommendations could, in certain circumstances, effectively result in the non-recovery of certain lost revenues from migration of customers to competitive markets.
The company is opposing the recommendations. The company does not, however, expect adoption of the recommendations by the PSC would have a material adverse effect on its financial position, results of
operations or liquidity. A PSC decision applicable to Con Edison of New York's electric and gas rates is expected in 2003.

O&R
is currently in settlement negotiations before the PSC for new electric and gas rate agreements. O&R's most recent electric rate agreement expired in December 2002 and the current gas rate
agreement is effective until October 2003.

FINANCIAL MARKET RISKS

The Companies are subject to various risks and uncertainties associated with their operations. The most significant market risks include interest rate risk,
commodity price risk, credit risk and investment risk. At March 31, 2003, there were no material changes to the Companies' financial market risks from those disclosed under "Financial Market
Risks" in the Con Edison and Con Edison of New York MD&A in Item 7 of the Form 10-K and O&R Narrative in Item 7A of the Form 10-K, to which reference is made.

Interest
Rate Risk

Con Edison estimates that, as of March 31, 2003, a 10 percent variation in interest rates applicable to its variable rate debt of
$1.3 billion would result in a change in annual interest expense of approximately $1 million. Assuming a 10 percent change in Con Edison of New York's and O&R's variable interest
rates applicable to their debt of $1 billion and $78 million, respectively, annual interest expense for Con Edison of New York would change by $1 million with no material impact
for O&R.

Commodity
Price Risk

Con Edison estimates that, as of March 31, 2003, a 10 percent change in market prices would result in a change in fair value of $13 million
for the derivative instruments used by its regulated utility subsidiaries to hedge purchases of electricity and gas, of which $10 million is for Con Edison of New York and

43

---

$3 million
for O&R. Con Edison expects that any such change in fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased.

Con
Edison's unregulated subsidiaries use a value-at-risk (VaR) model to assess the market risk of their electricity and gas commodity fixed price purchase and sales
commitments, physical forward contracts, and commodity derivative instruments. VaR for hedges
associated with generating assets and commodity contracts, assuming a one-day holding period, for the three months ended March 31, 2003, and 2002, respectively, was as follows:

|                       |  | 2003 |   | 2002
|---------------------- |  | ---- | - | ----
|
|
|Average for the period |  | $    | 1 |     
|High                   |  | $    | 2 |     
|Low                    |  | $    |  |     
|                      

Credit
Risk

Con Edison's unregulated energy subsidiaries had $112 million of credit exposure, net of collateral, at March 31, 2003, of which
$84 million was with investment grade counterparties and $21 million was with the New York Mercantile Exchange or independent system operators.

Investment
Risk

The Companies' current investment policy for their pension plan assets includes investment targets of 60 percent equities and 40 percent fixed
income and other securities. At March 31, 2003, the pension plan investments consisted of 53 percent equity and 47 percent fixed income and other securities.

ENERGY TRADING ACTIVITIES

Unregulated subsidiaries of Con Edison engage in energy trading activities that are accounted for in accordance with SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended. Con Edison Energy makes wholesale purchases and sales of electric, gas and related energy trading products and provides risk management
services to other unregulated Con Edison subsidiaries in order to optimize the value of their electric generating facilities and retail supply contracts. It also engages in a limited number of other
wholesale commodity transactions. Con Edison Energy utilizes forward contracts for the purchase and sale of electricity and capacity, over-the-counter swap contracts,
exchange-traded natural gas and crude oil futures and options, transmission congestion contracts, natural gas transportation contracts and other physical and financial contracts.

For
the period ended March 31, 2003, these contracts were marked to market in accordance with Emerging Issues Task Force (EITF) 02-3 and SFAS No. 133. Changes in fair value
of energy trading contracts that do not qualify for hedge accounting treatment are recorded in income in the reporting period in which they occur. For the corresponding period in 2002, these contracts
had been accounted for under EITF Issue No. 98-10, which was rescinded in October of 2002. Certain contracts, such as long-term natural gas transportation contracts that
were marked to market under EITF Issue No. 98-10, do not fall within the scope of SFAS No. 133, and therefore, are no longer marked to market for accounting purposes.

44

---

The
changes in fair value of energy trading net assets for the three months ended March 31, 2003 and 2002 were as follows:

|                                                           |                                                | 2003 |   | 2002 |  
|---------------------------------------------------------- | ---------------------------------------------- | ---- | - | ---- | -
|
|
|Fair value of net assets outstanding - beginning of period |                                                | $    | 5 |      | $
|Change in fair value during the period:                    |                                                |      |   |      |  
|                                                           | Net premium paid                               |      |   | 2    |  
|                                                           | Changes in fair value prior to settlement      |      |   | 3    |  
|                                                           | Fair value realized at settlement of contracts |      |   | (1   | )
|                                                           |                                               
|Total change in fair value during the period               |                                                |      | 4 |      |  
|                                                           |                                               
|Fair value of net assets outstanding - end of period       |                                                | $    | 9 |      | $
|                                                           |                                               

As of March 31, 2003, the sources of fair value of the energy trading net assets were as follows:

|                                                   |  | Fair Value of Net Assets at Period End |   
|-------------------------------------------------- |  | -------------------------------------- | --
|
|
|
|Prices provided by external sources                |  | $                                      | 14
|Prices based on models and other valuation methods |  |                                        | (5
|                                                   | 
|Total                                              |  | $                                      | 9 
|                                                   | 

"Prices provided by external sources" represent the fair value of exchange-traded futures and options and the fair value of positions for which price quotations
are available through or derived from brokers or other market sources.

"Prices
based on models and other valuation methods" represent the fair value of positions calculated using internal models when directly and indirectly quoted external prices or prices derived from
external sources are not available. Internal models incorporate the use of options pricing and estimates of the present value of cash flows based upon underlying contractual terms. The models reflect
management's estimates, taking into account observable market prices, estimated market prices in the absence of quoted market prices, the risk-free market discount rate, volatility
factors, estimated correlations of energy commodity prices and contractual volumes. Counterparty specific credit quality, market price uncertainty and other risks are also factored into the models.

MATERIAL CONTINGENCIES

For information concerning potential liabilities arising from the Companies' material contingencies, see the notes to the Companies' financial statements in
Part I, Item 1 of this report.

45

---

RESULTS OF OPERATIONS

FIRST QUARTER OF 2003 COMPARED WITH FIRST QUARTER OF 2002

The Companies' results of operations (which were discussed above under "Results of OperationsSummary") for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 were:

|                                                                                          |  | Con Edison* |     | Con Edison of
New York |        | O&R |  
|----------------------------------------------------------------------------------------- |  | ----------- | --- | ---------------------- | ------ | --- | -
|
|
|
|Operating revenues                                                                        |  | $           | 514 |                        | 25.0   | %   | $
|Purchased power                                                                           |  |             | 195 |                        | 29.1   |     |  
|Fuel                                                                                      |  |             | 120 |                        | 184.6  |     |  
|Gas purchased for resale                                                                  |  |             | 133 |                        | 57.8   |     |  
|Operating revenues less purchased power, fuel and gas purchased for resale (net revenues) |  |             | 66  |                        | 6.0    |     |  
|Other operations and maintenance                                                          |  |             | 51  |                        | 15.1   |     |  
|Depreciation and amortization                                                             |  |             | 9   |                        | 7.5    |     |  
|Taxes, other than income tax                                                              |  |             | 17  |                        | 6.4    |     |  
|Income tax                                                                                |  |             | (11 | )                      | (10.0  | )   |  
|Operating income                                                                          |  |             |    |                        |       |     |  
|Other income less deductions and related federal income tax                               |  |             | (11 | )                      | (64.7  | )   |  
|Net interest charges                                                                      |  |             | 1   |                        | 1.0    |     |  
|Preferred stock dividend requirements                                                     |  |             |    |                        |       |     |  
|Cumulative effect of change in accounting principle                                       |  |             | (20 | )                      | (100.0 | )   |  
|Net income for common stock                                                               |  | $           | 8   |                        | 5.5    | %   | $
|                                                                                          | 

* Represents the consolidated financial results of all Con Edison companies.

A discussion of the results of operations by principal business segment follows. Con Edison's principal segments are Con Edison of New York's regulated
electric, gas and steam utility segments, O&R's regulated electric and gas utility and other operations segments, and Con Edison's unregulated businesses. For additional business segment financial
information, see Note I to the financial statements in Part I, Item 1 of this report.

CON EDISON OF NEW YORK

Electric

Con
Edison of New York's electric operating revenues in the first quarter of 2003 increased $170 million compared with the first quarter of 2002, reflecting higher fuel and purchased power
costs of $155 million (see below). The increase also reflects the increase in net revenues (operating revenues less fuel and purchased power) due to the impact on deliveries of the cold winter
weather in 2003 compared with the mild winter weather in 2002 ($17 million) and sales growth from factors other than weather ($14 million). In addition, the increase reflects a reserve
booked in 2002 related to the sale of the Company's nuclear generating unit ($16 million). The increase in operating revenues was offset, in part, by a reserve for earnings in excess of a
specified rate of return that are to be retained for customer benefit in

46

---

accordance
with the 2000 Electric Rate Agreement ($15 million) and the recognition in 2002 of a previously deferred gain on the sale of divested plants ($12 million). See "Recoverable
Energy Costs" and "Rate and Restructuring Agreements" in Note A to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

Con
Edison of New York's electric sales and deliveries, excluding off-system sales, for the first quarter of 2003 compared with the first quarter of 2002 were:

MILLIONS OF KWHRS.

|                                       |                              | Three Months Ended |        |       |        |     |    
|-------------------------------------- | ---------------------------- | ------------------ | ------ | ----- | ------ | --- | ---
|
|
|Residential/Religious                  |                              | 2,965              |        | 2,768 |        | 197 |    
|Commercial/Industrial                  |                              | 4,491              |        | 4,436 |        | 55  |    
|Other                                  |                              | 35                 |        | 34    |        | 1   |    
|                                       |                             
|                                       | Total Full Service Customers |                    | 7,491  |       | 7,238  |     | 253
|Retail access customers                |                              | 3,020              |        | 2,655 |        | 365 |    
|                                       |                             
|                                       | Sub-total                    |                    | 10,511 |       | 9,893  |     | 618
|NYPA, Municipal Agency and Other Sales |                              | 2,639              |        | 2,381 |        | 258 |    
|                                       |                             
|                                       | Total Service Area           |                    | 13,150 |       | 12,274 |     | 876
|                                       |                             

Electric delivery volumes in Con Edison of New York's service territory increased 7.1 percent in the first quarter of 2003 compared with the first
quarter of 2002. The increase in delivery volumes reflects the colder winter weather in 2003 compared with the mild winter in 2002. After adjusting for variations, principally weather and billing days
in each period, electric delivery volumes in the service territory increased 3.1 percent in the first quarter of 2003 compared with the first quarter of 2002. Weather-adjusted sales represent
an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Con
Edison of New York's electric purchased power costs increased $148 million in the first quarter of 2003 as compared with the first quarter of 2002, due to an increase in the average unit
price of purchased power and to higher customer usage. This increase was offset in part by higher volumes of electricity purchased from other suppliers by participants in the company's retail access
programs. Fuel costs increased $8 million reflecting an increase in the average unit price of fuel. In general, Con Edison of New York recovers prudently incurred fuel and purchased power costs
pursuant to rate provisions approved by the PSC. See "Recoverable Energy Costs" in Note A to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

Con
Edison of New York's electric operating income decreased $16 million in the first quarter of 2003 compared with the first quarter of 2002. The principal component of the decrease was an
increase in other operations and maintenance expense of $32 million due primarily to a reduced net credit for pension and other postretirement benefits. The decrease was offset in part by an
increase in net revenues of $15 million as a result of higher sales from the cold winter weather in 2003 net of regulatory accounting and amortizations discussed above.

47

---

Gas

Con Edison of New York's gas operating revenues increased $124 million, resulting primarily from the higher cost of purchased gas ($119 million)
in the first quarter of 2003 compared with the first quarter of 2002. The higher cost of purchased gas reflects higher unit costs and increased sales volumes. The increased sales volumes result
primarily from the colder winter weather in the first quarter of 2003 compared with the mild winter in the first quarter of 2002. These revenue increases were partially offset by rate reductions
implemented in accordance with the gas rate agreement approved by the PSC in 2002. See "Recoverable Energy Costs" in Note A to the Con Edison of New York financial statements in Item 8 of the
Form 10-K.

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.

Gas
operating income decreased $3 million in the first quarter of 2003 compared with the first quarter of 2002, reflecting higher other operations and maintenance expense ($5 million)
reflecting primarily a reduced net credit for pension and other postretirement benefits and higher property taxes ($5 million), offset in part by an increase in net revenues (operating revenues
less gas purchased for resale) of $5 million.

Con
Edison of New York's gas sales and deliveries, excluding off-system sales, for the first quarter of 2003 compared with the first quarter of 2002 were:

THOUSANDS OF DTHS.

|                                     |                                | Three Months Ended |        |        |        |       |       
|------------------------------------ | ------------------------------ | ------------------ | ------ | ------ | ------ | ----- | ------
|
|
|Firm Sales                           |                                |                    |        |        |        |       |       
|Residential                          |                                | 25,861             |        | 19,373 |        | 6,488 |       
|General                              |                                | 15,840             |        | 12,545 |        | 3,295 |       
|Firm Transportation                  |                                | 7,159              |        | 5,909  |        | 1,250 |       
|                                     |                               
|                                     | Non-Firm Transportation of Gas |                    | 48,860 |        | 37,827 |       | 11,033
|Off Peak/Interruptible Sales         |                                | 5,684              |        | 4,045  |        | 1,639 |       
|Transportation of Customer Owned Gas |                                |                    |        |        |        |       |       
|NYPA                                 |                                | 3,842              |        | 4,220  |        | (378  | )     
|Divested Plants                      |                                | 17,797             |        | 14,217 |        | 3,580 |       
|Other                                |                                | 7,244              |        | 7,563  |        | (319  | )     
|                                     |                               
|                                     | Total Sales and Transportation |                    | 83,427 |        | 67,872 |       | 15,555
|                                     |                               

Con Edison of New York's gas sales and transportation volumes for firm customers increased 29.2 percent in the first quarter 2003 compared with the first
quarter of 2002. The increase reflects the impact of the cold winter weather in the first quarter of 2003 as compared with the mild weather in the first quarter of 2002. After adjusting for
variations, principally weather and billing days in each period, firm gas sales and transportation volumes in the company's service area increased 3.3 percent in the 2003 period.

48

---

Steam

Con Edison of New York's steam operating revenues increased $97 million and steam operating income increased $18 million for the first quarter of
2003 compared with the first quarter of 2002. The higher revenues reflect higher sales volumes due to the cold winter weather in the first quarter of 2003 as compared with the mild weather in the
first quarter of 2002. The increase also includes higher fuel and purchased power costs for the first quarter of 2003 compared to the first quarter of 2002. See "Recoverable Energy Costs" in
Note A to the Con Edison of New York financial statements in Item 8 of the Form 10-K. The increase in operating income reflects primarily the increase in net revenues
(operating revenues less fuel and purchased power costs) of $29 million, offset in part by higher income taxes ($10 million).

Con
Edison of New York's steam sales and deliveries for the first quarter of 2003 compared with the first quarter of 2002 were:

MILLIONS OF POUNDS

|                |             | Three Months Ended |        |       |       |       |      
|--------------- | ----------- | ------------------ | ------ | ----- | ----- | ----- | -----
|
|
|General         |             | 447                |        | 302   |       | 145   |      
|Apartment house |             | 3,446              |        | 2,628 |       | 818   |      
|Annual power    |             | 6,779              |        | 5,006 |       | 1,773 |      
|                |            
|                | Total Sales |                    | 10,672 |       | 7,936 |       | 2,736
|                |            

Steam sales volumes increased 34.5 percent in the first quarter of 2003 compared to the 2002 period, primarily as a result of the cold winter weather in
2003 as compared with the mild winter in 2002. After adjusting for variations, principally weather and billing days in each period, steam sales increased 1.2 percent.

Other
Income

Other income (deductions) decreased $13 million in the first quarter of 2003 compared to the first quarter of 2002. The decrease is due primarily to an
increase in income tax expense as a result of the recognition in 2002 of income tax benefits relating to the September 2001 sale of the company's nuclear generating unit.

O&R

Electric

Electric operating revenues increased $23 million during the three months ended March 31, 2003 compared to the 2002 period. The increase was
primarily the result of increased sales and higher purchased power costs in the 2003 period. See "Recoverable Energy Costs" in Note A to the O&R financial statements in Item 8 of the
Form 10-K.

49

---

O&R's
electric sales and deliveries, excluding off-system sales, for the first quarter of 2003 compared with the first quarter of 2002 were:

MILLIONS OF KWHRS.

|                        |                              | Three Months Ended |       |     |       |    |    
|----------------------- | ---------------------------- | ------------------ | ----- | --- | ----- | -- | ---
|
|
|Residential/Religious   |                              | 437                |       | 397 |       | 40 |    
|Commercial/Industrial   |                              | 572                |       | 568 |       | 4  |    
|Other                   |                              | 27                 |       | 27  |       |   |    
|                        |                             
|                        | Total Full Service Customers |                    | 1,036 |     | 992   |    | 44 
|                        |                             
|Retail Access Customers |                              | 308                |       | 248 |       | 60 |    
|                        |                             
|                        | Total Service Area           |                    | 1,344 |     | 1,240 |    | 104
|                        |                             

Electric delivery volumes in the first quarter of 2003 increased 8.4 percent compared to the 2002 period due to the cold winter weather in 2003 compared
with the mild winter in 2002, customer growth and higher average usage. After adjusting for weather variations, total electric delivery volumes were 3.3 percent higher in the current year.

Purchased
power cost increased $18 million during the first three months of 2003 compared to the 2002 period. This increase reflects increases in the average unit cost of purchased power and
higher energy usage by full-service customers, offset in part by increased volumes of electricity purchased by customers from other suppliers by participants in O&R's retail access
program.

Electric
operating income increased $3 million during the three months ended March 31, 2003 as compared to the 2002 period. The increase reflects an increase in net revenues (operating
revenues less fuel and purchased power) of $5 million, which is due primarily to increased sales. The increase in net revenues is partially offset by increased depreciation and amortization
expenses of $1 million and increased federal and state income tax of $1 million.

Gas

Gas operating revenues increased $22 million during the three months ended March 31, 2003 compared to the 2002 period. The increase was primarily
the result of increased sales to firm customers and increased gas costs in the 2003 period from the cold winter weather. See "Recoverable Energy Costs" in Note A to the O&R financial statements
in Item 8 of the Form 10-K.

50

---

O&R's
gas sales and deliveries, excluding off-system sales, for the first quarter of 2003 compared with the first quarter of 2002 were:

THOUSANDS OF DTHS.

|                               |                                     | Three Months Ended |        |       |        |      |      
|------------------------------ | ----------------------------------- | ------------------ | ------ | ----- | ------ | ---- | -----
|
|
|Firm Sales                     |                                     |                    |        |       |        |      |      
|Residential                    |                                     | 5,428              |        | 4,510 |        | 918  |      
|General                        |                                     | 1,723              |        | 1,461 |        | 262  |      
|Firm Transportation            |                                     | 3,439              |        | 2,455 |        | 984  |      
|                               |                                    
|                               | Total Firm Sales and Transportation |                    | 10,590 |       | 8,426  |      | 2,164
|Off Peak/Interruptible Sales   |                                     | 1,903              |        | 2,074 |        | (171 | )    
|Non-Firm Transportation of Gas |                                     |                    |        |       |        |      |      
|Divested Plants                |                                     | 815                |        | 1,597 |        | (782 | )    
|Other                          |                                     | 499                |        | 382   |        | 117  |      
|                               |                                    
|                               | Total Sales and Transportation      |                    | 13,807 |       | 12,479 |      | 1,328
|                               |                                    

Total firm gas sales volumes for the first quarter of 2003 increased 25.7 percent compared to the 2002 period. O&R's revenues from gas sales in New York
are subject to a weather normalization clause that moderates, but does not eliminate, the effect of weather-related changes on net income. After adjusting for weather variations in each period, total
firm sales and transportation volumes were 1.1 percent higher for the 2003 period compared to the 2002 period.

The
cost of gas purchased for resale increased $20 million in the 2003 period compared to the 2002 period due to higher sales volumes and higher unit costs.

For
the quarter ended March 31, 2003, gas operating income was unchanged. The $2 million increase in net gas revenues (operating revenues less purchased gas) was offset in part by
increased gas operations and maintenance expenses of $1 million and increased federal and state income tax of $1 million.

Taxes
Other Than Income Taxes

Taxes other than income taxes increased by $1 million in the 2003 period compared to the 2002 period. The increase was due primarily to higher property
taxes and payroll taxes.

Income
Taxes

Income taxes increased by $2 million in the 2003 period compared to the 2002 period, due to the higher taxable income in the current period.

Other
Income

Other income (deductions) increased by $1 million in the 2003 period compared to the 2002 period due primarily to a $1 million
after-tax gain on a January 2003 sale of land by an O&R unregulated subsidiary.

UNREGULATED BUSINESSES

Unregulated operating income for the first quarter of 2003 was $1 million lower than the 2002 period. Operating revenues increased $79 million in
the 2003 period compared to 2002 due primarily to higher sales from increased generating capacity and increased retail electric sales.

51

---

Operating
expenses, excluding income taxes, increased by $87 million, reflecting increased fuel and purchased power supply costs of $70 million and a $17 million increase in
operation and maintenance expenses attributable to increased costs to operate the generation assets ($12 million), Con Edison Communication's additional business development costs
($4 million) and higher depreciation on telecommunications and generating assets placed in service after March 2002 ($2 million). Operating income taxes decreased
$7 million in the first quarter 2003 as compared with the 2002 period reflecting lower taxable income.

Other
income (deductions) decreased $3 million for the first quarter of 2003 compared to the 2002 period, prior to consolidation adjustments, reflecting lower unrealized gains on derivative
contracts ($3 million), offset by the first quarter 2002 write down of an investment in Neon Communications ($4 million after tax). Other income (deductions) for the 2003 period also
reflect a fee of $4 million paid to Con Edison in connection with its guarantee of certain subsidiary obligations. Excluding this fee, which was eliminated in the preparation of Con Edison's
consolidated financial statements, other income (deductions) increased $1 million.

52

---



ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE 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 Market Risks" in the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part 1, Item 2 of this report,
which information is incorporated herein by reference. Also, see Item 7A of the Companies' combined Annual Report on Form 10-K for the year ended December 31, 2002 (the
Form 10-K).

ITEM 4.    CONTROLS AND PROCEDURES

For each of the Companies, its principal executive officer and principal financial officer, based upon his or her evaluation of its disclosure controls and
procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended) within 90 days prior to the filing date of this report, have concluded that
these controls and other procedures are effective to provide reasonable assurance that the information required to be disclosed by the company of which he or she is the principal executive officer or
principal financial officer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission. There have been no significant changes in the internal controls of any of the Companies or in other factors that could
significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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 those detailed in "Forward-Looking Statements" in
Part II of the Form 10-K.

53

---

PART II.    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Con Edison

Northeast Utilities

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

Con Edison of New York

Asbestos Proceedings

For information about Con Edison of New York's legal proceedings relating to asbestos, see Note D to the financial statements included in Part 1,
Item 1 of this report (which information is incorporated herein by reference).

In
March 2003, a jury awarded a 53-year old man $47 million for asbestos-related injuries in an action in New York State Supreme Court, New York County, entitled Robert
Croteau v. A.C.& S., Inc. et al. The man was employed by a subcontractor who did work in the 1970s on two power plants being constructed for Con Edison of New York. The jury found that Con
Edison of New York was 34 percent liable for the damages. In the event the court confirms the verdict, Con Edison of New York will appeal. If the verdict is ultimately upheld, Con Edison of New
York believes it is entitled to full reimbursement from other entities.

Con
Edison of New York believes that the preliminary verdict is grossly excessive and not supported by either the facts or the law. Con Edison of New York has filed motions to set aside the
preliminary verdict. Con Edison of New York believes that it has strong legal and factual arguments supporting its position that the verdict should be overturned.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

Con Edison

|Exhibit 10.1.1 |  | Consolidated Edison, Inc. Long Term Incentive Plan.                                                                                                                                                                                         
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.1.2 |  | The Consolidated Edison, Inc. Restricted Stock Plan for Non-Employee Directors, effective October 1, 1998. (Designated in Con Edison's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-14514) as
Exhibit 10.20.)
|Exhibit 12.1   |  | Statement of computation of Con Edison's ratio of earnings to fixed charges for the three-month period ended March 31, 2003, the years 1998-2002 and the twelve-month period ended March 31, 2003.                                          
|Exhibit 99.1.1 |  | Certification of chief executive officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                      
|Exhibit 99.1.2 |  | Certification of chief financial officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                      

54

---

Con Edison of New York

|Exhibit 10.2.1 |  | Consolidated Edison Company of New York, Inc. Retirement Plan for Trustees, effective as of July 1, 1988. (Designated in Con Edison of New York's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1-1217) as
Exhibit 10(ee).)                                   
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 10.2.2 |  | Amendment No. 1, dated September 28, 1990, to the Consolidated Edison Company of New York, Inc. Retirement Plan for Trustees. (Designated in Con Edison of New York's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1990 (File No. 1-1217) as Exhibit 19(c).)
|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, 2003, the years 1998-2002 and the twelve-month period ended March 31, 2003.                                                                            
|Exhibit 99.2.1 |  | Certification of chief executive officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                    
|Exhibit 99.2.2 |  | Certification of chief financial officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                    

O&R

|Exhibit 10.3   |  | Annual Team Incentive Plan, effective January 1, 1995, described on pages 9-10 of O&R's definitive proxy statement filed with the Securities and Exchange Commission on March 6, 1998, for O&R's Annual Meeting of shareholders, which
description is hereby incorporated by reference (File No. 1-4315).
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 12.3   |  | Statement of computation of O&R's ratio of earnings to fixed charges for the three-month period ended March 31, 2003, the years 1998-2002 and the twelve-month period ended March 31, 2003.                                                                                                              
|Exhibit 99.3.1 |  | Certification of chief executive officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                   
|Exhibit 99.3.2 |  | Certification of chief financial officer required under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                   

Con Edison filed Current Reports on Form 8-K dated (i) January 16, 2003, reporting under Item 5) its unaudited net income for common
stock for 2002 and certain information about its pension plan and furnishing (under Item 9) a copy of its press release, dated January 16, 2003, and certain additional information;
(ii) dated February 11, 2003, furnishing (under Item 9) a presentation dated February 11, 2003; and (iii) dated April 17, 2003, furnishing (under Item
9) a copy of its press release, dated April 17, 2003, reporting, among other things, its unaudited net income for common stock for the three months ended March 31, 2003.

The
Companies filed no other Current Reports on Form 8-K during the quarter ended March 31, 2003.

Con
Edison of New York filed a Current Report on Form 8-K, dated April 7, 2003, reporting (under Item 5) the completion of the sale of $175 million aggregate
principal amount of the company's 5.875% Debentures, Series 2003 A.

55

---



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 15, 2003 |  | By                                           
|                   |  | Orange and Rockland Utilities, Inc.          
|DATE: May 15, 2003 |  | By:                                          

56

---



Certifications

CON EDISON - Principal Executive Officer

I,
Eugene R. McGrath, the principal executive officer of Consolidated Edison, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/EUGENE R. MCGRATHEugene R. McGrath          
| |  | -----------------------------------------------
| |  | Chairman, President and Chief Executive Officer

57

---

CON EDISON - Principal Financial Officer

I,
Joan S. Freilich, the principal financial officer of Consolidated Edison, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/JOAN S. FREILICHJoan S. Freilich                 
| |  | ----------------------------------------------------
| |  | Executive Vice President and Chief Financial Officer

58

---

CON EDISON OF NEW YORK - Principal Executive Officer

I,
Eugene R. McGrath, the principal executive officer of Consolidated Edison Company of New York, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/EUGENE R. MCGRATHEugene R. McGrath
| |  | -------------------------------------
| |  | Chairman and Chief Executive Officer 

59

---

CON EDISON OF NEW YORK - Principal Financial Officer

I,
Joan S. Freilich, the principal financial officer of Consolidated Edison Company of New York, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/JOAN S. FREILICHJoan S. Freilich                 
| |  | ----------------------------------------------------
| |  | Executive Vice President and Chief Financial Officer

60

---

O&R - Principal Executive Officer

I,
John D McMahon, the principal executive officer of Orange and Rockland Utilities, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/JOHN D. MCMAHONJohn D. McMahon    
| |  | -------------------------------------
| |  | President and Chief Executive Officer

61

---

O&R - Principal Financial Officer

I,
Edward J. Rasmussen, the principal financial officer of Orange and Rockland Utilities, Inc., certify that:

DATE:
May 15, 2003

| |  | /s/EDWARD J. RASMUSSENEdward J. Rasmussen 
| |  | ------------------------------------------
| |  | Vice President and Chief Financial Officer

62

---

QuickLinks