Con Edison’s intangible assets consist of the following: The power purchase agreement was written up to its fair value of $112 million upon implementation of new FASB guidance  on derivatives (Derivatives Implementation Group Issue C20), and is being amortized over its remaining useful life of 11 years. See Note V. The amortization expense was $6 million and $4 million for the years ended December 31, 2003 and 2002 respectively,  and is expected to be $10 million annually for the years 2004-2008.  The components of income tax are as follows: Note M – Income Tax December 31, 2003 December 31, 2002 Accumulated Accumulated (Millions of Dollars) Gross Amortization Net Gross Amortization Net Power purchase agreement  of an unregulated subsidiary $112 $3 $109 $92 $10 $82 Other 3 1 2 - - - To tal $115 $4 $111 $92 $10 $82 Con Edison Con Edison of New York O&R (Millions of Dollars) 2003 2002 2001 2003 2002 2001 2003 2002 2001 Charge/(benefit) to operations: State Current $ 10 $ (3) $ 69 $3 3 $ ( 2 ) $7 2 $ - $1 $2 Deferred – net 64 97 79 56 87 65 9 3 4 Federal Current (107) 93 381 (36) 92 405 (7) 16 7 Deferred – net 364 217 (57) 325 183 (100) 32 5 13 Amortization of investment  tax credit (6) (6) (7) (6) (6) (7) - - - To tal Charge to Operations 325 398 465 372 354 435 34 25 26 Charge/(benefit) to other income: State Current (2) (3) (4) (1) (2) 1 - - - Deferred – net 5 (1) - 4 (1) - - - - Federal Current (11) (13) (9) (6) (5) (1) - - (1) Deferred – net (2) (1) (7) (2) - (6) - - - Amortization of investment  tax credit - (4) (2) - (4) (2) - - - To tal Benefit to Other Income (10) (22) (22) (5) (12) (8) - - (1) To t a l $315 $376 $443 $367 $342 $427 $34 $25 $25 78 Con Edison Annual Report 2003