customers and increased gas unit costs in 2003. The increase is offset in part by increased volumes of gas purchased from other suppliers by participants in O&R’s retail access program. See “Recoverable Energy Costs” in Note A to the financial statements. Gas operating income increased $2 million in 2003 as com- pared with 2002. The increase reflects an increase in net gas revenues (operating revenues less purchased gas) of $7 million, which is due primarily to increased sales and the referenced regulatory actions. The increase in net revenues was offset in part by increased gas operations and maintenance expenses of $2 million and increased federal and state income tax of $3 million. Unregulated subsidiaries’ operating income for 2003 was $122 million lower than 2002. Operating revenues increased $292 million in 2003 compared with 2002 due primarily to higher sales from Con Edison Development’s increased generating capacity and increased retail electric sales at Con Edison Solutions. Unregulated subsidiaries’ operating expenses, excluding income taxes, increased by $502 million, reflecting principally increased fuel and purchased power costs of $260 million, impairment charges of $159 million and increased operation and maintenance expenses of $83 million. See Note H to the financial statements. The increase in operation and mainte- nance expenses was attributable to increased costs at Con Edison Development ($51 million), primarily to operate the new generation assets, Con Edison Communications’ increased operating costs reflecting expansion of the business ($23 mil- lion), and higher depreciation for additional telecommunications facilities and generating assets placed in service ($13 million), offset in part by lower operation and maintenance costs at Con Edison Solutions ($6 million). Taxes other than income taxes decreased $2 million in 2003 compared with 2002.  Operating income taxes decreased $88 million for 2003 as compared with 2002 reflecting primarily lower taxable income (including the tax-effect of the aforementioned impairment charges). Unregulated subsidiaries’ other income (deductions) increased $1 million and interest charges were lower by $1 million for 2003 as compared with 2002.  Unregulated subsidiaries’ earnings reflect an increase of $25 million for 2003 as compared with 2002 resulting from the cumulative effect of changes in accounting principles adopted in each year. For 2003, the positive cumulative effect of changes in accounting principles of $3 million (after tax) at Con Edison Development related to mark-to-market gains applica- ble to power sales contracts at certain generating plants, par- tially offset by the impact of the financial statement consolida- tion of its Newington plant. For 2002, the cumulative effect of changes in accounting principles included charges for goodwill impairment of certain generating assets at Con Edison Development, totaling $20 million (after tax), and a charge of $2 million (after tax) at Con Edison Energy relating to the accounting for certain contracts involved in energy trading and risk management activities. Earnings attributable to Other, representing the parent compa- ny and inter-company transactions, were $9 million lower for 2003 as compared with 2002 primarily reflecting higher interest expenses. O&R’s net interest charges decreased by $7 million in 2003 compared with 2002, due primarily to the company recording interest charges of $5 million in 2002 as a result of a change by the NJBPU in the carrying charges allowed on the compa- ny’s deferred purchased power balance in New Jersey and to lower interest on long-term debt as a result of the redemption of a $35 million, 10-year debenture in March 2003 (see “Liquidity and Capital Resources,” above). O&R’s other income (deductions) decreased $3 million in 2003 compared with 2002, due primarily to the reclassification to other income (deductions) of losses previously recognized in other comprehensive income related to investments in mar- ketable securities.  Operating income taxes increased by $9 million in 2003  compared with 2002 due primarily to the result of less flow- through (non-deferred) depreciation for tax purposes. The principal components of, and variation, in taxes,  other than income taxes were: Con Edison Annual Report 2003 41 Net Interest Charges Other Income Income Taxes Taxes Other Than Income Taxes Unregulated Subsidiaries and Other (b) Includes a sales and use tax refund of approximately $800,000. Increase/ (Millions of Dollars) 2003 2002 (Decrease) Property taxes $28 $27 $ 1 State and local taxes related  to revenue receipts 19 21 (2) Payroll taxes 4 4 - Other taxes (1)(b) - (1) Total $50(a) $52(a) $(2) (a) Including sales tax on customers’ bills, total taxes other than income taxes,  (a) billed to customers in 2003 and 2002 were $69 and $71 million, respectively.