The future minimum lease commitments for the above assets are as follows: Internal Revenue Service has proposed that the tax losses rec- ognized in connection with the 1997 LILO transaction be disal- lowed for the tax year 1997. Con Edison believes its position is correct and is currently appealing the auditors’ proposal within the Internal Revenue Service. The estimated total tax savings from the two LILO transactions during the tax years 1997 through 2003, in the aggregate, was $100 million. On January 1, 2002, Con Edison adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 pro- vides that goodwill (i.e., the excess of cost over fair value of the net assets of a business acquired) and intangible assets with indefinite useful lives will no longer be amortized, but instead be tested for impairment at least annually. Other intangible assets will continue to be amortized over their finite useful lives. In 2002, the company recognized a loss of $34 million ($20 million after-tax) as an offset to goodwill recorded by Con Edison Development relating to certain of its generation assets. During 2003, Con Edison completed the impairment test for its goodwill of $406 million and determined that it was not impair ed. Operating leases: The future minimum lease commitments under Con Edison’s non-cancelable operating lease agree- ments, excluding the Newington Project, are as follows: In November 2000, a Con Edison Development subsidiary entered into an operating lease arrangement with a limited partnership to finance construction of a 525 MW gas-fired electric generating facility in Newington, New Hampshire (Newington Project). See Note T. As part of a broad initiative, the Internal Revenue Service is reviewing certain categories of transactions. Among these are transactions in which a taxpayer leases property and then immediately subleases it back to the lessor (termed “Lease In/Lease Out,” or LILO transactions). In 1997 and 1999, Con Edison’s unregulated subsidiaries invested $93 million in two LILO transactions, involving gas distribution and electric gener- ating facilities in the Netherlands, which represented approxi- mately 36 percent of the purchase price; the remaining 64 per- cent or $166 million was furnished by third-party financing in the form of long-term debt that provides no recourse against the subsidiaries and is primarily secured by the assets, except for guarantees of up to $10 million of the debt. Approximately half of these guarantees expired prior to December 31, 2002 and the other half will expire at the end of May 2004. At December 31, 2003, the company’s investment of $202 million in these leveraged leases net of deferred tax liabilities of $142 million amounted to $60 million, which was included at cost on Con Edison’s consolidated balance sheet. On audit, the Con Edison Annual Report 2003 77 Had Con Edison been accounting for goodwill under SFAS No. 142 for all periods presented, its income and earnings  per share would have been as follows: Con Edison (Millions of Dollars) Con Edison of New York O&R 2004 $ 51 $40 $ 3 2005 17 7 2 2006 16 6 2 2007 15 5 2 2008 15 5 2 All years thereafter 48 19 17 To tal $162 $82 $28 For the years ended December 31, (Millions of Dollars, except per share amounts) 2003 2002 2001 Net income for common stock As reported $ 528 $ 646 $ 682 Add back: goodwill  amortization (net of tax) - - 11 Adjusted $ 528 $ 646 $ 693 Basic earnings per share As reported $2.39 $ 3.03 3.22 Add back: goodwill  amortization (net of tax) - - .05 Adjusted $2.39 $ 3.03 3.27 Diluted earnings per share  As reported $2.38 $ 3.02 $ 3.21 Add back: goodwill  amortization (net of tax) - - .05 Adjusted $2.38 $ 3.02 $ 3.26 Con Edison (Millions of Dollars) Con Edison of New York 2004 $14 $ 8 2005 7 7 2006 7 7 2007 7 7 2008 8 8 All years thereafter 28 28 To t a l $71 $65 Less: amount representing interest 26 26 Present value of net minimum lease payment $45 $39 Note L – Goodwill and Intangible Assets 