The components of the Utilities’ net periodic postretirement benefit costs for 2003, 2002 and 2001 were as follows: Con Edison Con Edison of New York O&R (Millions of Dollars) 2003 2002 2001 2003 2002 2001 2003 2002 2001 Service cost $ 10 $ 10 $ 12 $ 8 $ 8 $ 11 $ 2 $ 2 $ 1 Interest cost on accumulated  postretirement benefit obligation 82 88 88 73 80 81 9 8 7 Expected return on plan assets (78) (80) (73) (74) (76) (70) (4) (4) (3) Amortization of net actuarial loss 46 24 10 41 21 9 5 3 1 Amortization of prior service cost (16) - 1 (15) - 1 (1) - - Amortization of transition obligation 4 5 17 4 5 17 - - - Net Periodic Postretirement Benefit Cost $ 48 $ 47 $ 55 $ 37 $ 38 $ 49 $11 $ 9 $ 6 Cost capitalized/deferred 18 14 13 11 9 11 7 5 2 Cost charged to operating expenses $ 30 $ 33 $ 42 $ 26 $ 29 $ 38 $ 4 $ 4 $ 4 Net Periodic Benefit Cost Funded Status The funded status of the programs at December 31, 2003, 2002 and 2001 was as follows:  Con Edison Con Edison of New York O&R (Millions of Dollars) 2003 2002 2001 2003 2002 2001 2003 2002 2001 Change In Benefit Obligation Benefit obligation at beginning of year $1,248 $1,351 $1,170 $1,116 $1,249 $1,076 $132 $102 $094 Service cost 10 10 12 8 8 10 2 2 2 Interest cost on accumulated  postretirement benefit obligation 82 88 88 73 80 81 9 8 7 Plan amendments - (306) - - (306) - - - - Net actuarial loss 99 178 149 89 151 144 10 27 5  Benefits paid  and administrative expenses (91) (89) (82) (83) (82) (76) (8) (7) (6) Participant contributions 18 15 14 18 15 14 - - - Medicare prescription subsidy (128) - - (114) - - (14) - - Benefit Obligation at End of Year $1,238 $1,247 $1,351 $1,107 $1,115 $1,249 $131 $132 $102 Change In Plan Assets Fair value of plan assets at beginning of year $ 1, 717 $ 1, 804 $ 1, 844 $ 1, 674 $,0763 $0,805 $043 $041 $039 Actual return on plan assets 145 (61) (29) 143 (61) (29) 2 - - Employer contributions 46 45 56 38 39 50 8 6 6 Participant contributions 18 16 14 18 16 14 - - - Benefits paid (87) (82) (76) (83) (78) (72) (4) (4) (4)  Administrative expenses - (5) (5) - (5) (5) - - - Fair Value of Plan Assets at End of Year $ 839 $ 717 $ 804 $ 790 $ ,0 674 $ 0, 763 $ 0 49 $ 0 43 $ 0 41 Funded status $ (399) $ (530) $ (547) $ (317) $ (441) $ (486) $ (82) $ (89) $ (61) Unrecognized net loss 363 506 211 319 455 189 44 51 22 Unrecognized prior service costs (133) (148) 8 (132) (147) 9 (1) (1) (1) Unrecognized net transition  liability at January 1, 1993* 33 36 191 33 36 191 - - - Accrued Postretirement Benefit Cost $ (136) $ (136) (137) $ (97) $ (97) $ 0, (97) $ (39) $ (39) $ (40) * Being amortized over a period of 20 years and reduced by an additional amount in 2002 due to plan amendments. 72 Con Edison Annual Report 2003