building.
The construction of the building was completed in December 2003.
Due to lower than expected financing and construction costs, the final lease balance was lowered to $103.0 million.
As part of the agreement, we entered into a five-year lease that began upon the completion of the building.
At the end of the lease term, we can purchase the building for the lease balance, remarket or relinquish the building.
If we choose to remarket or are required to do so upon relinquishing the building, we are bound to arrange the sale of the building to an unrelated party and will be required to pay the lessor any shortfall between the net remarketing proceeds and the lease balance, up to the maximum recourse amount of $90.8 million (“residual value guarantee”).
See Note 14 in our Notes to Consolidated Financial Statements for further information.
In August 1999, we entered into a five-year lease agreement for our other two office buildings that currently serve as our corporate headquarters in San Jose, California.
Under the agreement, we have the option to purchase the buildings at any time during the lease term for the lease balance, which is approximately $142.5 million.
We are in the process of evaluating alternative financing methods at expiration of the lease in fiscal 2004 and believe that several suitable financing options will be available to us.
At the end of the lease term, we can purchase the buildings for the lease balance, remarket or relinquish the buildings.
If we choose to remarket or are required to do so upon relinquishing the buildings, we are bound to arrange the sale of the buildings to an unrelated party and will be required to pay the lessor any shortfall between the net remarketing proceeds and the lease balance, up to the maximum recourse amount of $132.6 million (“residual value guarantee”).
For further information, see Note 14 in our Notes to Consolidated Financial Statements.
The two lease agreements discussed above are subject to standard financial covenants.
The agreements limit the amount of indebtedness we can incur.
A leverage covenant requires us to keep our debt to EBITDA ratio less than 2.5:1.0.
As of November 28, 2003, our debt to EBITDA ratio was 0.53:1.0, well within the limit.
We also have a liquidity covenant which requires us to maintain a quick ratio equal to or greater than 1.0.
As of November 28, 2003, our quick ratio was 2.2, well above the minimum.
We expect to remain within compliance in the next 12 months.
We are comfortable with these limitations and believe they will not impact our cash or credit in the coming year or restrict our ability to execute our business plan.
The following table summarizes our contractual commitments as of November 28, 2003:
## Table 0 ##
Indemnifications In the normal course of business, we provide indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our products.
Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations.
We have commitments to make certain milestone and/or retention payments typically entered into in conjunction with various acquisitions, for which we have made accruals in our consolidated financial statements.
In connection with our purchases of technology assets during fiscal 2003, we entered into employee retention agreements totaling $2.2 million.
We are required to make payments upon satisfaction of certain conditions in the agreements.
As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity.
The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime.
The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that limits our exposure and enables us to recover a portion of any future amounts paid.
We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.
RECO & Pike Mortgages Substantially all of the utility plant and other physical property of O&R's utility subsidiaries, RECO and Pike, is subject to the liens of the respective indentures securing first mortgage bonds of each company.
Competitive Energy Businesses Con Edison Development, an unregulated subsidiary of Con Edison, owns and leases interests in 1,668 MW of capacity in electric generating facilities, most of which use gas and/or oil as fuel.
These interests, the capitalized costs of which at December 31, 2005 amounted to $806 million (net of accumulated depreciation), are as follows:
## Table 1 ##
(a) Leased pursuant to a consolidated lease transaction.
See Note Q to the financial statements in Item 8.
(b) Subject to a power purchase agreement expiring in 2026.
(c) Subject to a power purchase agreement expiring in 2014.
(d) Con Edison Development’s interest in these facilities amounts to 1,668 MW Con Edison Development is also engaged in two leasing transactions involving gas distribution and electric generating facilities in the Netherlands.
See Note K to the financial statements in Item 8 (which information is incorporated herein by reference).
Discontinued Operations Con Edison Communications’ assets, the capitalized costs of which at December 31, 2005 amounted to $52 million, are included in Con Edison’s financial statements as Non-Utility Properties Held for Sale.
The assets include opto-electronic equipment and over 400 miles of fiber optic cable that have been installed in the New York City metropolitan area primarily through Con Edison of New York’s underground conduits and other rights of way.
Con Edison Communications pays fees for the use of the conduits and rights of way.
ITEM 3.
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 H to the financial statements in Item 8 (which information is incorporated herein by reference).
Lease in/Lease Out Transactions For information about Con Edison’s appeal of a proposed disallowance by the Internal Revenue Service of certain tax losses recognized in connection with the company’s lease in/ lease out transactions, see Note K to the financial statements in Item 8 (which information is incorporated herein by reference).
Con Edison of New York Asbestos For information about legal proceedings relating to exposure to asbestos, see Note G to the financial statements in Item 8 (which information is incorporated herein by reference).
Superfund The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes (Superfund) impose joint and several liability, regardless of fault, upon generators of hazardous substances for investigation, remediation costs and environmental damages.
The sites at which Con Edison of New York has been asserted to have liability under Superfund include its and its predecessor companies’ former manufactured gas sites, its Astoria PCB storage facility, the Arthur Kill Generating Station site and other Superfund sites discussed below.
There may be additional sites as to which assertions will be made that the company has
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK)–CONTINUED The principal factors affecting Con Edison’s liquidity are its investments in the Utilities, the dividends it pays to its shareholders and the dividends it receives from the Utilities.
In addition, in 2004 and 2003, Con Edison issued 16.7 million and 11.9 million shares of common stock for $578 million and $436 million, respectively, of which $512 million and $378 million were invested in Con Edison of New York.
Con Edison also issued $200 million of five-year debt in 2003, most of the proceeds of which were invested in its competitive businesses.
The principal factors affecting Con Edison of New York’s liquidity are its cash flows from operations, cash used in investing activities (including construction expenditures) and cash flows from financing activities discussed below.
Con Edison of New York’s expenditures have included approximately $513 million related to the 2001 attack on the World Trade Center and the subsequent restoration of lower Manhattan energy services and facilities; to date the company has received reimbursement of $76 million of such costs from insurance carriers and $93 million from the federal government and is pursuing further reimbursement of such costs.
See Note I to the financial statements.
The Companies’ current liabilities exceeded their current assets at December 31, 2005, 2004 and 2003.
The Companies generally maintain minimal cash balances and use short-term borrowing to meet their working capital needs and other cash requirements.
The Companies repay their short-term borrowings using funds from long-term financings and operating activities.
The Utilities’ cost of capital, including working capital, is reflected in the rates they charge to their customers.
Each of the Companies believes that it will be able to meet its reasonably likely short-term and long-term cash requirements.
See “Risk Factors,” and “Application of Critical Accounting Policies – Accounting for Contingencies,” above, and “Regulatory Matters,” below.
Changes in the Companies’ cash and temporary cash investments resulting from operating, investing and financing activities for the years ended December 31, 2005, 2004 and 2003 are summarized as follows: Con Edison
## Table 2 ##
Con Edison of New York
## Table 3 ##
Cash Flows from Operating Activities The Utilities’ cash flows from operating activities reflect principally their energy sales and deliveries and cost of operations.
The volume of energy sales and deliveries is dependent primarily on factors external to the Utilities, such as weather and economic conditions.
The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans.
In general, changes in the Utilities’ cost of purchased power, fuel and gas may affect the timing of cash flows but not net income because the costs are recovered in accordance with rate plans.
See “Recoverable Energy Costs” in Note A to the financial statements.
Net income is the result of cash and non-cash (or accrual) transactions.
Only cash transactions affect the Companies’ cash flows from operating activities.
Principal non-cash charges include depreciation, Con Edison’s impairment charges in 2005 and 2003, and in 2004 charges in accordance with Con Edison of New York’s rate plans.
For Con Edison of New York, principal non-cash credits included prepaid pension costs and in 2005, amortizations of certain net regulatory liabilities, including the tax
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK)–CONTINUED O&R’s electric sales and deliveries, excluding off-system sales, in 2004 compared with 2003 were:
## Table 4 ##
Electric delivery volumes in O&R’s service area increased 2.3 percent in 2004 compared with 2003 due to the growth in the number of customers and higher average customer usage.
After adjusting for weather variations in each period and the August 2003 regional power outage, electric delivery volumes in O&R’s service area increased 2.3 percent in 2004.
O&R’s purchased power cost decreased $5 million in 2004 as compared with 2003 due to a decrease in the average unit cost, lower energy usage by the company’s full-service customers and the regulatory actions referenced above.
O&R’s electric operating income decreased $3 million in 2004 as compared with 2003 due primarily to the referenced regulatory actions offset in part by lower depreciation expense and lower revenue and income taxes.
Gas O&R’s gas operating revenues increased $7 million in 2004 compared with 2003.
The increase is due primarily to the impact of the 2003 gas rate agreement and higher firm transportation volumes.
O&R’s gas sales and deliveries, excluding off-system sales, in 2004 compared with 2003 were:
## Table 5 ##
Sales and transportation volumes for firm customers decreased 3.2 percent in 2004 compared with 2003 reflecting the impact of the milder winter and warm spring weather.
After adjusting for weather variations in each period and the August 2003 power outage, total firm sales and transportation volumes were 0.9 percent higher in 2004 compared with 2003.
Non-firm transportation of customer-owned gas to electric generating plants decreased 76.7 percent in 2004 as compared with 2003 because the relative prices of gas and fuel oil led power plants in the company’s gas service area to utilize oil rather than gas for a significant portion of their generation.
In addition, one area power plant has changed equipment at its two coal-fired units to significantly reduce the volume of gas required for ignition.
The decline in gas usage had minimal impact on earnings due to the application of a fixed demand charge for local transportation.
Gas operating income was the same in 2004 as in 2003.
Increased gas operations and maintenance expenses of $12 million, primarily related to pensions and other postretirement benefits, were offset by an increase in net gas revenues of $7 million, reflecting the 2003 gas rate agreement, and by a decrease in federal and state income tax of $4 million and lower taxes other than income taxes of $1 million.

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td>Total</td><td>Less than 1 year</td><td>1-3 years</td><td>3-5 years</td><td>Over 5 years</td></tr><tr><td>Non-cancelable operating leases, net of sublease income</td><td>$83.9</td><td>$23.6</td><td>$25.9</td><td>$16.3</td><td>$18.1</td></tr></table>
<table><tr><td> Name</td><td rowspan="3"> Power Plant Type Base/Peak/Intermediate Base Base</td><td rowspan="3"> Power Pool/Location ISO-NE/New Hampshire ECAR/Michigan</td><td rowspan="3"> Aggregate Capacity (in MW) 525 29(b)</td><td></td></tr><tr><td>Newington(a)</td><td></td></tr><tr><td>ADA</td><td></td></tr><tr><td> Total Base Capacity</td><td></td><td></td><td> 554</td><td> </td></tr><tr><td>GENOR</td><td>Intermediate</td><td>Central America/Guatemala</td><td>42</td><td></td></tr><tr><td>CEEMI</td><td>Intermediate</td><td>ISO-NE/Massachusetts</td><td>125</td><td></td></tr><tr><td>Lakewood</td><td>Intermediate</td><td>PJM/New Jersey</td><td>236(c)</td><td></td></tr><tr><td colspan="2"> Total Intermediate Capacity</td><td></td><td> 403</td><td> </td></tr><tr><td>CEEMI</td><td>Peaking</td><td>ISO-NE/Massachusetts</td><td>156</td><td></td></tr><tr><td>Ocean Peaking</td><td>Peaking</td><td>PJM/New Jersey</td><td>330</td><td></td></tr><tr><td>Rock Springs</td><td>Peaking</td><td>PJM/Maryland</td><td>335</td><td></td></tr><tr><td> Total Peaking Capacity</td><td></td><td></td><td> 821</td><td> </td></tr><tr><td> Total Capacity</td><td></td><td></td><td> 1,778</td><td> (d)</td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td>2005</td><td>2004</td><td>Variance 2005 vs. 2004</td><td>2003</td><td>Variance 2004 vs. 2003</td></tr><tr><td>Operating activities</td><td>$793</td><td>$1,311</td><td>$-518</td><td>$1,309</td><td>$2</td></tr><tr><td>Investing activities</td><td>-1,277</td><td>-1,531</td><td>254</td><td>-1,534</td><td>3</td></tr><tr><td>Financing activities</td><td>539</td><td>197</td><td>342</td><td>156</td><td>41</td></tr><tr><td>Net change for the period</td><td>55</td><td>-23</td><td>78</td><td>-69</td><td>46</td></tr><tr><td>Balance at beginning of period</td><td>26</td><td>49</td><td>-23</td><td>118</td><td>-69</td></tr><tr><td>Balance at end of period</td><td>$81</td><td>$26</td><td>$55</td><td>$49</td><td>$-23</td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td>2005</td><td>2004</td><td>Variance 2005 vs. 2004</td><td>2003</td><td>Variance 2004 vs. 2003</td></tr><tr><td>Operating activities</td><td>$818</td><td>$1,201</td><td>$-383</td><td>$1,169</td><td>$32</td></tr><tr><td>Investing activities</td><td>-1,167</td><td>-1,412</td><td>245</td><td>-1,337</td><td>-75</td></tr><tr><td>Financing activities</td><td>400</td><td>188</td><td>212</td><td>113</td><td>75</td></tr><tr><td>Net change for the period</td><td>51</td><td>-23</td><td>74</td><td>-55</td><td>32</td></tr><tr><td>Balance at beginning of period</td><td>10</td><td>33</td><td>-23</td><td>88</td><td>-55</td></tr><tr><td>Balance at end of period</td><td>$61</td><td>$10</td><td>$51</td><td>$33</td><td>$-23</td></tr></table>
<table><tr><td></td><td colspan="2"> Millions of kWhs  Twelve Months Ended</td><td></td><td></td></tr><tr><td> Description</td><td> December 31, 2004</td><td> December 31, 2003</td><td>Variation</td><td>Percent Valuation</td></tr><tr><td>Residential/Religious</td><td>1,729</td><td>1,769</td><td>-40</td><td>-2.3%</td></tr><tr><td>Commercial/ Industrial</td><td>2,046</td><td>2,277</td><td>-231</td><td>-10.1</td></tr><tr><td>Other</td><td>107</td><td>111</td><td>-4</td><td>-3.6</td></tr><tr><td> Total Full Service Customers</td><td> 3,882</td><td> 4,157</td><td>-275</td><td>-6.6</td></tr><tr><td>Retail access customers</td><td>1,861</td><td>1,455</td><td>406</td><td>27.9</td></tr><tr><td> Total Service Area</td><td> 5,743</td><td> 5,612</td><td>131</td><td>2.3%</td></tr></table>
<table><tr><td></td><td colspan="2"> Thousands of DTHs  Twelve Months Ended</td><td></td><td rowspan="2">Percent Variation</td></tr><tr><td> Description</td><td> December 31, 2004</td><td> December 31, 2003</td><td>Variation</td></tr><tr><td> Firm Sales</td><td></td><td></td><td></td><td></td></tr><tr><td>Residential</td><td>9,487</td><td>10,810</td><td>-1,323</td><td>-12.2%</td></tr><tr><td>General</td><td>2,487</td><td>3,314</td><td>-827</td><td>-25.0</td></tr><tr><td> Firm Transportation</td><td> 9,931</td><td> 8,498</td><td>1,433</td><td>16.9</td></tr><tr><td> Total Firm Sales and Transportation</td><td> 21,905</td><td> 22,622</td><td>-717</td><td>-3.2</td></tr><tr><td>Off Peak/Interruptible Sales</td><td>6,996</td><td>6,833</td><td>163</td><td>2.4</td></tr><tr><td> Non-Firm Transportation of Gas</td><td></td><td></td><td></td><td></td></tr><tr><td>Generation Plants</td><td>659</td><td>2,833</td><td>-2,174</td><td>-76.7</td></tr><tr><td>Other</td><td>1,068</td><td>1,134</td><td>-66</td><td>-5.8</td></tr><tr><td> Total Sales and Transportation</td><td> 30,628</td><td> 33,422</td><td>-2,794</td><td>-8.4%</td></tr></table>

Question: Does the value of Residential in 2004 greater than that in 2003?
Answer: No