In the fourth quarter of 2003, we filed rate requests for Con Edison of New York’s gas and steam businesses. We expect to submit an electric rate request in the spring of 2004. We are communicating and working with all stakeholders to arrive at positive outcomes to these rate proceedings. New rate plans for gas and steam will likely be implemented in the fourth quarter of 2004, while the electric rate case will not affect earnings until 2005. Our “A” level credit ratings have enabled us to take advantage of the current low interest rate environment while raising the funds necessary for our large capital program. To help maintain our capital structure, we issued a total of $477 million of new common stock in 2003, through a stock issue in the spring and our ongoing dividend reinvestment and employee stock plans. At year-end, Con Edison’s equity ratio was a solid 48 percent, making our balance sheet one of the strongest in the industry. Con Edison common stock price at year-end was $43.01, an increase of 0.4 percent for the year. Total 2003 return for our shar eholders, including reinvestment of dividends, was 6.1 percent. Although the average total return for shareholders of the electric industry and the equity markets in general was higher in 2003, those increases reflectedto a great extent recovery in the stock prices of com- panies that suffered major losses in the previous two years. Over the three-year period 2001 through 2003, Con Edison shar eholders’ total return was 31.7 percent, while the S&P Electric Utilities Index r eturned a neg- ative 12.3 percent and the S&P 500 Index returned a negative 11.7 percent. Our strategy for the future is straight- forward. We continue to focus on the basics of our core business while preparing for the future. In recent years, we’ve experienced events and trends that were beyond our control, ranging fr om terrorist attacks to weather extr emes to unex- First, we will continue to invest for growth. Many indicators point to an improving economy in our service area. In 2003, for example, the number of permits for new housing units in the city rose to the highest level in 30 years. New residents are buying more appliances, home entertainment centers, computers, and other devices that run on electricity than ever before. Our strategic concentration on several key areas will enable us to build a brighter future — for Con Edison, and for the region we serve. pected developments in the economy. We deal with such challenges by focusing on the aspects of the bus- iness we can control while maintaining the resources and capabilities to respond to unforeseen developments. And we work closely with all stake- holders — customers, regulators, community leaders, and elected officials — to encourage the develop- ment of policies and practices that will lead to a stronger energy infra- structure for New York, the region, and the nation. Looking Ahead Page 2, Left: In 2003, Orange & Rockland invested more than $46 million in its electric transmission and distribution systems. Center: In the home and workplace, customers are using more and more electronic devices. Right: A number of newly completed, large residential and commercial buildings are increasing the demand for energy. Page 3, Left: Many new commercial building projects are underway in the region Con Edison serves. Center: Today, everyone uses incr easing amounts of energy. Right: Through investments in infrastructure, Con Edison is meeting the increasing demand for energy. Con Edison Annual Report 2003 3