UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                         Amendment No. 1 on Form 10Q/A
                                    to Form 10-Q
(Mark One)
 X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---
EXCHANGE ACT OF 1934

For the quarterly period ended                                    June 30, 2000
                               ------------------------------------------------
                                                                  OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---
EXCHANGE ACT OF 1934

For the transition period from                     to
                               ------------------    ------------------

                         Commission file number 1-14161
                                                --------

                               KEYSPAN CORPORATION
                              ---------------------
             (Exact name of Registrant as specified in its charter)

          New York                                       11-3431358
-------------------------------               ----------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)


                 One MetroTech Center, Brooklyn, New York 11201
              175 East Old Country Road, Hicksville, New York 11801
           -----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                            (718) 403-1000 (Brooklyn)
                           (631) 755-6650 (Hicksville)
                          -----------------------------
              (Registrant's telephone number, including area code)


 (Former name, former address and former fiscal year, if changed since last
  report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

   Class of Common Stock                          Outstanding at August 1, 2000
---------------------------                      ------------------------------
      $.01 par value                                        134,262,534


<PAGE>

EXPLANATORY NOTE:

           The Company hereby amends Part I of its quarterly report on Form 10-Q
for the period  ended June 30, 2000 to reflect the  inclusion  of a new footnote
No. 9, which  footnote  includes  summary  financial  data of  KeySpan  Gas East
Corporation,  a wholly owned  subsidiary  of the  Company,  as required by Staff
Accounting  Bulletin 53. No other changes to the financial  statements set forth
herein have been made.

                      KEYSPAN CORPORATION AND SUBSIDIARIES

                                      INDEX

                     Part I. FINANCIAL INFORMATION                     Page No.
                                                                       --------

Item 1. Financial Statements

           Consolidated Balance Sheet -
           June 30, 2000 and December 31, 1999                              3

           Consolidated Statement of Income -
           Three and Six Months Ended June 30, 2000 and 1999                5

           Consolidated Statement of Cash Flows -
           Three and Six Months Ended June 30, 2000 and 1999                6

           Notes to Consolidated Financial Statements                       7


Signatures                                                                 16



                                        2

<PAGE>



                           CONSOLIDATED BALANCE SHEET
                            (IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>

                                                                                    June 30, 2000                 December 31, 1999
---------------------------------------------------------------------  ----  ----------------------------  ----  ------------------
                                                                                   (Unaudited)                        (Audited)
<S>                                                                                <C>                             <C>
ASSETS
Current Assets
    Cash and temporary cash investments                                $                92,127     $                   128,602
    Customer accounts receivable                                                       620,739                         425,643
    Other accounts receivable                                                          268,464                         235,156
    Allowance for uncollectible accounts                                               (27,762)                        (20,294)
    Special deposits                                                                    42,325                          60,863
    Gas in storage, at average cost                                                    145,896                         144,256
    Materials and supplies, at average cost                                             85,206                          84,813
    Other                                                                               92,433                          98,914
                                                                             -----------------        ------------------------
                                                                                     1,319,428                       1,157,953
                                                                             -----------------        ------------------------


Equity Investments and Other                                                           428,828                         391,731
                                                                             -----------------        ------------------------

Property
    Electric                                                                         1,367,512                       1,346,851
    Gas                                                                              3,522,284                       3,449,384
    Other                                                                              387,523                         375,657
    Accumulated depreciation                                                        (1,655,540)                     (1,589,287)
    Gas exploration and production, at cost                                          1,278,786                       1,177,916
    Accumulated depletion                                                             (561,966)                       (520,509)
                                                                             -----------------        ------------------------
                                                                                     4,338,599                       4,240,012
                                                                             -----------------        ------------------------

Deferred Charges
    Regulatory assets                                                                  334,976                         319,167
    Goodwill, net of amortizations                                                     328,510                         255,778
    Other                                                                              369,811                         366,050
                                                                             -----------------        ------------------------
                                                                                     1,033,297                         940,995
                                                                             -----------------        ------------------------

                                                                             -----------------        ------------------------
Total Assets                                                           $             7,120,152     $                 6,730,691
                                                                             =================        ========================
</TABLE>






        See accompanying Notes to the Consolidated Financial Statements.



                                        3

<PAGE>



                           CONSOLIDATED BALANCE SHEET
                            (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                        June 30, 2000             December 31, 1999
----------------------------------------------------------------------------------------------------------------------
                                                                        (Unaudited)                 (Audited)
<S>                                                                     <C>                    <C>
LIABILITIES AND CAPITALIZATION
Current Liabilities

    Current redemption of preferred stock                               $       -          $       363,000
    Accounts payable and accrued expenses                                  684,291                 645,347
    Commercial paper                                                       262,481                 208,300
    Dividends payable                                                       61,071                  61,306
    Taxes accrued                                                           64,917                  50,437
    Customer deposits                                                       30,607                  31,769
    Interest accrued                                                        44,033                  28,093
                                                                         ---------               ---------
                                                                         1,147,400               1,388,252
                                                                         ---------               ---------
Deferred Credits and Other Liabilities
    Regulatory liabilities                                                  39,520                  26,618
    Deferred income tax                                                    223,551                 186,230
    Postretirement benefits and other reserves                             528,700                 501,603
    Other                                                                   98,677                  66,200
                                                                         ---------               ---------
                                                                           890,448                 780,651
                                                                         ---------               ---------

Capitalization

Common stock, $.01 par value, authorized
450,000,000 shares; outstanding 133,896,426
and 133,866,077 shares stated at                                         2,985,936               2,973,388
    Retained earnings                                                      528,082                 456,882
    Accumulated foreign currency adjustment                                 (1,716)                  7,714
    Treasury stock purchased                                              (722,080)              (722,959)
                                                                         ---------               ---------
      Total common shareholders' equity                                  2,790,222               2,715,025
    Preferred stock                                                         84,339                  84,339
    Long-term debt                                                       2,112,377               1,682,702
                                                                         ---------               ---------
Total Capitalization                                                     4,986,938               4,482,066
                                                                         ---------               ---------

Minority Interest in Subsidiary Companies                                   95,366                  79,722
                                                                         ---------               ---------
Total Liabilities and Capitalization                                 $   7,120,152      $        6,730,691
                                                                         =========               =========
</TABLE>



        See accompanying Notes to the Consolidated Financial Statements.



                                        4

<PAGE>



                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
               (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                        Three Months        Three Months            Six Months           Six Months
                                                           Ended                Ended                  Ended                Ended
                                                        June 30, 2000       June 30, 1999          June 30, 2000       June 30, 1999
--------------------------------------------------------------------------------------------- -------------------------------------
<S>                                                      <C>                  <C>                 <C>                <C>
Revenues
Gas Distribution                                     $     361,540 $            281,384  $         1,166,243 $           999,682
Electric Services                                          388,695              190,435              723,099             365,293
Gas Exploration and Production                              57,842               35,021              107,218              61,541
Energy Related Services and Other                          139,511               36,686              267,641              78,118
                                                       -----------   ------------------    -----------------   -----------------
Total Revenues                                             947,588              543,526            2,264,201           1,504,634
                                                       -----------   ------------------    -----------------   -----------------
Operating Expenses
Purchased gas for resale                                   197,378              106,145              609,125             430,414
Purchased fuel                                              72,772                    -              140,649                   -
Operations and maintenance                                 378,986              239,642              734,465             472,177
Depreciation, depletion and amortization                    73,810               59,383              143,391             117,568
Operating taxes                                             91,118               77,145              206,541             181,038
                                                       -----------   ------------------    -----------------   -----------------
Total Operating Expenses                                   814,064              482,315            1,834,171           1,201,197
                                                       -----------   ------------------    -----------------   -----------------

Operating Income                                           133,524               61,211              430,030             303,437
                                                       -----------   ------------------    -----------------       -------------

Other Income and (Deductions)
Income from equity investments                               4,683                2,509               11,928               5,481
Interest income                                              4,290                7,746                6,881              18,789
Minority interest                                           (4,766)              (1,887)              (7,795)             (2,191)
Other                                                        3,816                1,056                 (112)              4,305
                                                       -----------   ------------------    -----------------   -----------------
Total Other Income                                           8,023                9,424               10,902              26,384
                                                       -----------   ------------------    -----------------   -----------------
Income Before Interest Charges
  and Income Taxes                                         141,547               70,635              440,932             329,821
                                                       -----------   ------------------    -----------------   -----------------
Interest Charges                                            42,256               34,893               77,325              70,779
                                                       -----------   ------------------    -----------------   -----------------
Income Taxes
    Current                                                 13,184              (39,505)             108,817               7,141
    Deferred                                                32,741               52,258               29,180              85,691
                                                        -----------   ------------------    -----------------  -----------------
Total Income Taxes                                          45,925               12,753              137,997              92,832
                                                       -----------   ------------------    -----------------   -----------------
Net Income                                                  53,366               22,989              225,610             166,210
Preferred stock dividend requirements                        6,286                8,690               14,977              17,379
                                                       -----------   ------------------    -----------------   -----------------
Earnings for Common Stock                            $      47,080 $             14,299  $           210,633 $           148,831
Foreign currency adjustment                                 (9,082)               2,425               (9,430)              5,735
                                                       -----------   ------------------    -----------------   -----------------
Comprehensive Income                                 $      37,998 $             16,724  $           201,203 $           154,566
                                                       ===========   ==================    =================   =================
Average Common Shares Outstanding (000)                    133,889              140,749              133,881             141,865
Basic and Diluted Earnings Per
     Common Share                                    $        0.35  $             0.10    $             1.57  $             1.05
                                                       ===========   ==================    =================   =================
</TABLE>


        See accompanying Notes to the Consolidated Financial Statements.



                                        5

<PAGE>



                                            CONSOLIDATED STATEMENT OF CASH FLOWS
                                                          (Unaudited)
                                                   (IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                        Three Months        Three Months            Six Months           Six Months
                                                           Ended                Ended                  Ended                Ended
                                                        June 30, 2000       June 30, 1999          June 30, 2000       June 30, 1999
--------------------------------------------------------------------------------------------- --------------------------------------
<S>                                                         <C>                   <C>                 <C>                 <C>
OPERATING ACTIVITIES
Net Income                                           $         53,366 $             22,989  $           225,610 $           166,210
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
    Depreciation, depletion and amortization                   73,810               59,383              143,391             117,568
    Deferred income tax                                        32,741               52,258               29,180              85,691
    Income from equity investments                             (4,683)              (2,509)             (11,928)             (5,481)
    Dividends from equity investments                           9,944                    -               11,807               4,296
Changes in assets and liabilities
    Accounts receivable                                        76,154              217,523             (139,344)            146,397
    Materials and supplies, fuel oil and
         gas in storage                                      (102,777)             (54,475)              (1,515)             48,252
    Accounts payable and accrued expenses                     (12,093)             (75,596)              30,676            (161,065)
    Interest accrued                                           11,326               (2,433)              15,932              (4,647)
    Special deposits                                            6,477               12,449               18,538              37,307
    Prepayments and other                                      32,317              (52,218)              44,499             (57,534)
                                                       --------------   ------------------    -----------------   ----------------
Net Cash Provided by Operating Activities                     176,582              177,371              366,846             376,994
                                                       --------------   ------------------    -----------------   -----------------
Investing Activities
Capital expenditures                                         (125,577)            (288,353)            (237,151)           (374,684)
Investments                                                         -                    -             (141,719)                  -
Other                                                          (1,935)              (3,563)               5,154              12,451
                                                       --------------   -------------------   -----------------   -----------------
Net Cash (Used in) Investing Activities                      (127,512)            (291,916)            (373,716)           (362,233)
                                                       --------------   -------------------   -----------------   -----------------
FINANCING ACTIVITIES
Treasury stock purchased                                            -              (68,671)                   -            (122,732)
Issuance of commercial paper                                  262,481                    -               54,181                   -
Issuance of long-term debt                                     19,232                8,000              449,627              15,000
Payment of long-term debt                                     (16,000)            (397,000)             (20,000)           (397,000)
Payment of preferred stock                                   (363,000)                   -             (363,000)                  -
Preferred stock dividends paid                                 (8,286)              (8,690)             (17,124)            (17,379)
Common stock dividends paid                                   (59,584)             (63,323)            (119,159)           (127,683)
Other                                                         (11,124)                 186              (14,130)               (448)
                                                       --------------   -------------------   -----------------   -----------------
Net Cash (Used in) Financing Activities                      (176,281)            (529,498)             (29,605)           (650,242)
                                                       --------------   -------------------   -----------------   -----------------
Net (Decrease) in Cash and                                            $                                         $
     Temporary Cash Investments                      $       (127,211)            (644,043) $           (36,475)           (635,481)
                                                       ==============   ==================    =================   =================
Cash and temporary cash investments at
    beginning of period                              $        219,338 $            951,338  $           128,602 $           942,776
Net (Decrease) in cash and
     temporary cash investments                              (127,211)            (644,043)             (36,475)           (635,481)
                                                       --------------   ------------------    -----------------   -----------------
Cash and Temporary Cash Investments at
    End of Period                                    $        92,127  $            307,295  $            92,127 $           307,295
                                                       ==============   ==================    =================   =================
</TABLE>

Temporary cash investments are short-term  marketable  securities purchased with
maturities of three months or less that were carried at cost which  approximates
fair value.
        See accompanying Notes to the Consolidated Financial Statements.




                                        6

<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


    KeySpan Corporation d/b/a KeySpan Energy (the "Company" or "KeySpan Energy")
    is a holding company operating two utilities that distribute  natural gas to
    approximately  1.6 million  customers  in New York City and on Long  Island,
    making it the fourth largest  gas-distribution company in the United States.
    Other  KeySpan  Energy  companies  market a portfolio of  gas-marketing  and
    energy-   related    services   in   the   Northeast,    own   and   operate
    electric-generation  plants in New York City and on Long Island, and provide
    operating  and  customer  services to  approximately  1.1  million  electric
    customers of the Long Island Power Authority  ("LIPA").  The Company's other
    energy activities include: gas exploration and production, primarily through
    The Houston  Exploration  Company ("THEC");  a domestic pipeline and storage
    facilities;  and  international  activities,  including  gas  processing  in
    Canada, and a gas pipeline and local distribution in Northern Ireland.  (See
    Note 2,  "Business  Segments" for  additional  information on each operating
    segment.)

1.    BASIS OF PRESENTATION

    In the  opinion of the  Company,  the  accompanying  unaudited  Consolidated
    Financial Statements contain all adjustments necessary to present fairly the
    financial  position of the Company as of June 30,  2000,  and the results of
    its  operations  and cash flows for the three and six months  ended June 30,
    2000 and June 30, 1999. The accompanying financial statements should be read
    in conjunction with the consolidated financial statements and notes included
    in the  Company's  1999  Annual  Report on Form 10-K.  Income  from  interim
    periods may not be indicative of future results.  Certain  reclassifications
    were made to conform  prior  period  financial  statements  with the current
    period financial statement  presentation.  Other than as noted,  adjustments
    were of a normal, recurring nature.

2.    BUSINESS SEGMENTS

    The  Company  has  six  reportable  segments:  Gas  Distribution,  Electric
    Services,   Gas  Exploration  and  Production,   Energy  Services,   Energy
    Investments and Other.

    The Gas Distribution  segment consists of the Company's two gas distribution
    subsidiaries.  The Brooklyn Union Gas Company d/b/a KeySpan Energy  Delivery
    New York  ("KeySpan  Energy  Delivery New York")  provides gas  distribution
    services to customers in the New York City Boroughs of Brooklyn,  Queens and
    Staten Island.  KeySpan Gas East  Corporation  d/b/a KeySpan Energy Delivery
    Long  Island   ("KeySpan   Energy   Delivery  Long  Island")   provides  gas
    distribution services to customers in the Long Island counties of Nassau and
    Suffolk and the Rockaway Peninsula of the Borough of Queens.

     The Electric Services segment consists of Company subsidiaries that operate
     the electric  transmission and  distribution  ("T&D") system owned by LIPA,
     own and provide  capacity to and produce energy for LIPA from the Company's
     generating  facilities  located on Long Island and manage fuel supplies for
     LIPA to fuel the Company's Long Island generating  facilities,  all through
     long-term  service  contracts having terms that range from eight to fifteen
     years. The



                                        7

<PAGE>



    Electric Services segment also includes Company subsidiaries that own, lease
    and operate  the 2,168  megawatt  Ravenswood  electric  generation  facility
    ("Ravenswood Facility"), located in Queens, New York. The Company's contract
    with Consolidated  Edison Company of New York ("Con Ed"), which provided Con
    Ed with 100% of the available capacity of the Ravenswood Facility on a fixed
    monthly fee,  expired on April 30, 2000. The Company now provides all of the
    energy,  capacity and ancillary services related to the Ravenswood  Facility
    to the New  York  Independent  System  Operator  ("NYISO").  Currently,  the
    Company's  primary  electric  generation  customers  are LIPA and the  NYISO
    energy markets.

    The  Gas  Exploration  and  Production  segment  is  engaged  in gas and oil
    exploration and production,  and the development and acquisition of domestic
    natural gas and oil properties.  This segment  consists of the Company's 70%
    equity  interest in THEC,  an  independent  natural gas and oil  exploration
    company,  as well as KeySpan  Exploration  and Production LLC, the Company's
    wholly owned  subsidiary  engaged in a joint venture with THEC. On March 31,
    2000, under a pre- existing credit arrangement, approximately $80 million in
    debt owed by THEC to the Company was  converted  into common equity of THEC.
    Upon such conversion, the Company's common equity ownership interest in THEC
    increased from 64% to the current level of approximately 70%.

    The Company's  Energy Services  segment  primarily  includes  companies that
    provide  energy  services  to  customers  located  within  the New York City
    tri-state  metropolitan  area and in Rhode Island through the following four
    lines of business:  (i) home energy services provides residential  customers
    with service and  maintenance of energy systems and  appliances,  as well as
    the  retail   marketing  of  natural  gas  and  electricity  to  residential
    customers;     (ii)     business     solutions     provides     professional
    engineering-consulting  and  design of energy  systems  for  commercial  and
    industrial   customers,   including   installation  of  plumbing,   heating,
    ventilation  and  air  conditioning  ("HVAC")  equipment;   (iii)  commodity
    procurement provides management and procurement services for fuel supply and
    management of energy sales,  primarily for the Ravenswood Facility; and (iv)
    telecommunications  services  provides various services to carriers of voice
    and data transmission on Long Island and in New York City.

    Subsidiaries in the Energy Investments segment hold a 20% equity interest in
    the Iroquois Gas Transmission System LP, a pipeline that transports Canadian
    gas supply to markets in the  Northeastern  United States; a 50% interest in
    the Premier  Transmission  Pipeline and a 24.5% interest in Phoenix  Natural
    Gas, both in Northern Ireland;  investments in certain midstream natural gas
    assets in Western Canada owned jointly with Gulf Canada  Resources  Limited,
    through the Gulf Midstream Services Partnership ("GMS") and the ownership of
    certain oil producing properties in Alberta,  Canada. These subsidiaries are
    primarily accounted for under the equity method. Accordingly,  equity income
    from  these   investments  is  primarily   reflected  in  other  income  and
    (deductions) in the Consolidated Statement of Income.

    The Other segment represents primarily unallocated  administrative expenses,
    interest  income earned on temporary cash  investments,  and preferred stock
    dividends.

     The accounting  policies of the segments are the same as those used for the
     preparation  of  the  Consolidated  Financial  Statements.   The  Company's
     segments are strategic  business units that are managed  separately because
     of their different operating and regulatory environments. At June



                                        8

<PAGE>



    30, 2000,  the total assets of certain  reportable  segments  increased from
    levels  reported  at  December  31,  1999 as  follows:  the Energy  Services
    segment's assets  increased by  approximately  $200 million during the three
    months  ended March 31, 2000,  due  primarily  to the  acquisition  of three
    additional companies that provide energy-related services and the investment
    in  MyHomeKey.com,  Inc. The segment  information  presented  below reflects
    amounts reported in the Consolidated  Financial Statements for the three and
    six months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>

                                                                                                       (IN THOUSANDS OF DOLLARS)
-----------------------------------------------------------------------------------------------------------------------------------
                          Gas         Electric     Gas Exploration      Energy      Energy
                      Distribution    Services      and Production     Services   Investments    Other    Eliminations  Consolidated
-----------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>            <C>             <C>           <C>           <C>           <C>         <C>           <C>
Three Months Ended
June 30, 2000
Unaffiliated Revenue   $   361,540 $     388,695 $        57,842 $      138,021 $    1,490    $       -     $      -  $      947,588
Intersegment Revenue          -             -              -             32,158           -           -        (32,158)         -
Operating Income            21,769        62,215          25,173         33,712     (2,518)        (6,827)         -         133,524
Earnings for
  Common Stock               2,279        28,841          10,465         17,155       1,543       (13,203)         -          47,080
Basic and Diluted
Earnings Per Share         $0.02          $0.22           $0.08          $0.13        $0.01        $(0.11)       $ -           $0.35

Three Months Ended
June 30, 1999
Unaffiliated Revenue   $   281,384 $     190,435 $        35,021 $      36,235  $       451   $       -     $      -    $    543,526
Intersegment Revenue          -             -                 -              -           -            -            -            -
Operating Income            21,461        30,133          10,610        (1,561)      (1,650)        2,218          -          61,211
Earnings for
  Common Stock               1,220        15,037           3,326          (851)       2,605        (7,038)         -          14,299
Basic and Diluted
Earnings Per Share          $0.01          $0.11           $0.02        $(0.01)        $0.02       $(0.05)  $      -          $0.10
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>

                                                                                                       (IN THOUSANDS OF DOLLARS)
-----------------------------------------------------------------------------------------------------------------------------------
                          Gas         Electric     Gas Exploration      Energy        Energy
                      Distribution    Services     and Production     Services     Investments   Other   Eliminations   Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>             <C>            <C>            <C>           <C>        <C>        <C>            <C>
Six Months Ended
June 30, 2000
Unaffiliated Revenue   $ 1,166,243 $     723,099 $      107,218    $    264,640 $    3,001    $     -     $   -     $     2,264,201
Intersegment Revenue         -             -                 -           32,774           -         -      (32,774)              -
Operating Income           234,230       131,827         41,529          32,305     (3,053)      (6,808)      -            430,030
Earnings for
  Common Stock             129,058        71,520         15,963          15,585      5,190      (26,683)      -            210,633
Basic and Diluted
Earnings Per Share          $0.96          $0.53         $0.12           $0.12       $0.04       $(0.20)     $-              $1.57

Six Months Ended
June 30, 1999
Unaffiliated Revenue   $   999,682 $     365,293 $       61,541 $        77,069  $   1,049    $     -     $   -     $    1,504,634
Intersegment Revenue          -             -               -              -           -            -         -              -
Operating Income           227,200        63,260         14,081          (4,492)    (2,715)       6,103       -            303,437
Earnings for
  Common Stock             121,910        31,622          3,804          (2,500)     3,116       (9,121)      -            148,831
Basic and Diluted
   Earnings Per Share       $0.86          $0.22         $0.03           $(0.02)     $0.02       $(0.06)     $-              $1.05
</TABLE>





                                        9

<PAGE>



3.    ENVIRONMENTAL MATTERS

    MANUFACTURED  GAS  PLANT  SITES:  The  Company  has  identified  thirty-four
    manufactured  gas  plant  ("MGP")  sites  that  were  historically  owned or
    operated by KeySpan  Energy  Delivery New York and KeySpan  Energy  Delivery
    Long Island (or such companies'  predecessors).  These former sites, some of
    which are no longer owned by the Company,  have been  identified  to the New
    York State Department of Environmental Conservation ("DEC") for inclusion on
    appropriate waste site inventories.

    The Company  presently  estimates that the remaining cost of its MGP-related
    environmental  cleanup activities will be approximately $120 million;  which
    amount has been accrued by the Company as its current  best  estimate of its
    aggregate  environmental  liability  for known  sites.  The  currently-known
    conditions of the former MGP sites, their period and magnitude of operation,
    generally observed cleanup  requirements and costs in the industry,  current
    land  use  and  ownership,  and  possible  reuse  have  been  considered  in
    establishing   contingency  reserves.  The  Company  believes  that  in  the
    aggregate,  the accrued  liability for  investigation and remediation of the
    MGP sites identified above are reasonable  estimates of likely cost within a
    range of reasonable, foreseeable costs.

    Thirteen of the identified sites are currently the subject of Administrative
    Consent  Orders  ("ACO")  with the DEC and  another  site is  subject to the
    negotiation  of an  ACO  or an  agreement  under  DEC's  Voluntary  Clean-up
    Program. The Company's remaining MGP sites may not become subject to ACOs in
    the future, and accordingly no liability has been accrued for these sites.

    Under prior rate orders,  the Public Service  Commission of the State of New
    York  ("NYPSC")  has allowed  recovery of costs  related to certain  KeySpan
    Energy Delivery New York MGP sites.  The Company  believes that current rate
    plans in effect for both Gas Distribution  subsidiaries provide for recovery
    of environmental costs attributable to the Gas Distribution segment. At June
    30, 2000,  the Company had a total  regulatory  asset of  approximately  $98
    million.  Expenditures  incurred  to date by the  Company  with  respect  to
    MGP-related activities total approximately $19 million.


4.     LIQUIDITY AND FINANCINGS

    On  June  1,  2000,  the  Company  redeemed,  at  maturity,  all  14,520,000
    outstanding  shares of its 7.95%  Preferred  Stock Series AA. The  Company's
    obligation of $370.2 million included the mandatory  redemption price of $25
    per share  totaling  $363.0  million and  dividends  payable  totaling  $7.2
    million.  The  redemption  was satisfied  through  utilization of internally
    generated funds and proceeds from the issuance of commercial paper.

    During the six months  ended June 30,  2000,  the Company  issued and repaid
    commercial  paper  to  satisfy  working  capital  needs  and  the  mandatory
    redemption of preferred stock as discussed above.  During the second quarter
    of 2000, the Company issued $319 million of commercial paper



                                       10

<PAGE>



    and repaid $56.5  million.  At June 30, 2000, the Company had $262.5 million
    of commercial paper  outstanding at an average  annualized  interest rate of
    6.91%.

    KeySpan  Energy  Delivery Long Island filed a shelf  registration  statement
    with the Securities and Exchange Commission ("SEC") in December 1999 for the
    issuance of up to $600  million of Medium  Term Notes.  On February 1, 2000,
    KeySpan  Energy  Delivery  Long Island issued $400 million 7.875 % Notes due
    February 1, 2010.  The net proceeds from the issuance were used to repay the
    Company for its costs in  extinguishing  $397 million of promissory notes to
    LIPA  that  matured  in June  1999.  The  Medium  Term  Notes  are fully and
    unconditionally guaranteed by the Company. At June 30, 2000, $200 million of
    Medium Term Notes remain available for issuance under the shelf registration
    statement.

    During the quarter ended June 30, 2000,  THEC borrowed $14 million under its
    credit facility with a commercial bank and repaid $16 million of outstanding
    borrowings.  At June 30, 2000, $177 million remained  outstanding under this
    facility  at a  weighted  average  annualized  interest  rate of  7.71%.  In
    addition, during the quarter ended June 30, 2000, a subsidiary in the Energy
    Investments   segment  increased  its  borrowings  under  a  revolving  loan
    agreement  with a financial  institution in Canada by $5.2 million U.S. . At
    June 30,  2000,  $120 million U.S.  was  outstanding  at a weighted  average
    annualized interest rate of 6.51%.


5.    ACQUISITION OF EASTERN ENTERPRISES

    On  November  4, 1999,  the  Company  and  Eastern  Enterprises  ("Eastern")
    announced that the companies had signed a definitive  merger agreement under
    which the Company will acquire all of the common stock of Eastern for $64.00
    per share in cash,  subject to adjustment.  The Agreement and Plan of Merger
    is  included  as an exhibit to the  Company's  Form 8-K filed on November 5,
    1999. The  transaction has a total value of  approximately  $2.5 billion and
    will be accounted for utilizing purchase accounting.

    In connection with the merger, Eastern has amended its merger agreement with
    EnergyNorth,  Inc. ("EnergyNorth") to provide for an all cash acquisition by
    Eastern of  EnergyNorth  shares at a price per share of  $61.13,  subject to
    adjustment.  The  restructured  EnergyNorth  merger  is  expected  to  close
    contemporaneously  with the  KeySpan/Eastern  transaction.  The  EnergyNorth
    transaction  has a total  value  of  approximately  $250  million.  Proforma
    financial  statements  for the  Eastern  and  EnergyNorth  transactions  are
    included as an exhibit to this Form 10-Q.

    The Company intends to access the financial markets in the fourth quarter of
    2000 to finance  approximately  $2 billion for the  Eastern and  EnergyNorth
    transactions.  The  Company  intends to use bridge  financing  to fund these
    transactions  initially  and then  replace the bridge  financing  with $1.65
    billion of long-term debt securities as soon as practicable thereafter.  The
    remaining balance will be financed through the issuance of commercial paper.
    The Company  anticipates  issuing several different  maturities of long-term
    debt to balance its future debt capital maturity structure.




                                       11

<PAGE>



    The  Company  expects  pre-tax  annual  cost  savings   resulting  from  the
    transactions  to be  approximately  $40 million.  These cost savings  result
    primarily  from the  elimination of duplicate  corporate and  administrative
    programs,  greater  efficiencies in operations and business  processes,  and
    increased  purchasing  efficiencies.  The  Company  expects to  achieve  the
    majority of the reductions through a variety of programs which would include
    hiring freezes, attrition and separation programs,  including implementation
    of an early retirement program and targeted  voluntary  severance program in
    the third and fourth  quarters  of 2000.  The  Company is  currently  in the
    process of finalizing these programs and will report the potential effect of
    these  initiatives  on  earnings  and cash  flow  from  operations  when job
    positions and cost estimates have been finalized.

    Following the closing of these transactions, the Company will become subject
    to the  regulation  of the SEC as a  registered  holding  company  under the
    Public  Utility  Holding  Company  Act of 1935,  as  amended.  As such,  the
    corporate  and  financial  activities  of the Company and its  subsidiaries,
    including  such entities'  ability to pay dividends,  will be subject to SEC
    regulation.  The  merger  is  conditioned  upon  the  approval  of the  SEC.
    Shareholders of both Eastern and  EnergyNorth,  as well as the New Hampshire
    Public  Utility  Commission  (with  respect  to  Eastern's   acquisition  of
    EnergyNorth)  have approved the transactions.  The Company  anticipates that
    the  transaction  will be  consummated in the fourth quarter of 2000, but is
    unable to determine when or if the required SEC approval will be obtained.

     Eastern owns and operates Boston Gas Company,  Colonial Gas Company,  Essex
     Gas Company,  Midland  Enterprises  Inc.,  Transgas  Inc.,  and  ServicEdge
     Partners, Inc., which primarily serve the Massachusetts area.


6.    NEW YORK STATE INDEPENDENT SYSTEM OPERATOR ("NYISO") MATTERS

    The  Company  currently   realizes  revenues  from  its  investment  in  the
    Ravenswood  Facility  through the  wholesale  sale of energy,  capacity  and
    ancillary  services.  Ancillary  services include spinning  reserves and non
    spinning reserves ("Reserves") available to replace energy that is unable to
    be delivered due to the unexpected loss of a major energy source.

    Due to the  increase in the  market-clearing  price of  Reserves  during the
    first  quarter  of  2000,  the  NYISO  requested  that  the  Federal  Energy
    Regulatory  Commission  ("FERC")  approve a bid cap on  Reserves  as well as
    requiring a refunding of so-called  alleged  "excess  payments"  received by
    sellers  into  the  ancillary  services  market,  including  the  Ravenswood
    Facility and LIPA. Other market  participants,  including buyers of Reserves
    and  electric  utilities  as  load  serving  entities  ("LSEs")  also  filed
    complaints with FERC and intervened in the various FERC proceedings  related
    to Reserves and proposed alternative remedies.

    On May 31, 2000,  FERC issued an order on Reserves  (the  "Reserves  Order")
    that granted approval of a bid cap for non-spinning  reserves which includes
    payments for the  opportunity  cost of not making  energy  sales.  The other
    requests - such as a bid cap for  spinning  reserves,  retroactive  refunds,
    recalculation of Reserve prices for March 2000, and convening a technical



                                       12

<PAGE>



    conference  and settlement  proceeding - were rejected by FERC.  Pursuant to
    the Reserves Order,  the NYISO made its first  compliance  filing to FERC on
    June 15, 2000. However, the NYISO and several other market participants have
    requested  rehearing of the Reserves  Order. In response to a NYISO request,
    FERC has allowed the NYISO to recalculate  Reserve prices for the March 2000
    period applying the bid cap that FERC had previously  rejected,  pending its
    review on the rehearing requests of the Reserves Order.

    Additionally,  the  wholesale  energy  market  has also  been  the  focus of
    increased market based pricing.  On June 30, 2000, the NYISO petitioned FERC
    to approve a $1,300/MWh bid cap in the energy market to be effective July 6,
    2000 through  October 28, 2000.  The NYISO  requested the bid cap because it
    believes that there is a purported lack of price  responsive  demand and the
    start- up problems  associated with  implementation of the NYISO might cause
    severe price spikes during the summer peak months. In response,  on July 26,
    2000,  the FERC  issued an order (the  "Energy  Market  Order")  approving a
    $1,000/MWh  bid cap in the energy  market  effective  July 26, 2000  through
    October  28,  2000.  The  Energy  Market  Order also  requires  the NYISO to
    identify  certain  "market  flaw  problems"  and to  report  them to FERC by
    September 1, 2000.

    The Company is opposing  the relief  requested by the NYISO and the LSEs and
    believes  that  the  ultimate  resolution  of these  issues  will not have a
    material  effect  on its  consolidated  financial  position  or  results  of
    operations.


7.    DERIVATIVE FINANCIAL INSTRUMENTS

    In connection with the Company's  anticipated  purchase of Eastern (See Note
    5,  "Acquisition of Eastern  Enterprises")  and the anticipated  issuance of
    long-term debt  securities to finance the  acquisition,  the Company entered
    into forward  interest  rate lock  agreements to hedge a portion of the risk
    that the cost of the future  issuance of  fixed-rate  debt may be  adversely
    affected by changes in interest  rates.  Through June 30, 2000,  the Company
    has entered into $1.25 billion of forward interest rate lock agreements. The
    interest  lock rates  range from 7.070% to 7.780% and have  maturities  that
    range  from  5 to 30  years.  The  Company  estimates  that  it  has  hedged
    approximately 76% of the estimated long-term debt financing  associated with
    the  purchase of Eastern.  However,  interest  rates  associated  with these
    forward lock  agreements  could change if the  Company's  bond rating at the
    time of the debt issuance  changes.  Under an interest rate lock  agreement,
    the  Company  agrees to pay or  receive  an amount  equal to the  difference
    between  the net  present  value of the cash flows for a notional  principal
    amount of indebtedness  based on the existing yield of a hedging  instrument
    at the date of the agreement and at the date the agreement is settled. Gains
    and losses on interest rate lock  agreements  will be deferred and amortized
    over the life of the underlying debt to be issued.  The notional  amounts of
    the agreements are not exchanged. The Company has entered into interest rate
    lock agreements  with more than one major financial  institution in order to
    minimize counter party credit risk.

    Also during the quarter,  the Company  entered  into a number of  derivative
    swap  instruments  to fix the  selling  price on a portion of its  estimated
    summer peak electric sales through the Ravenswood  Facility.  For the months
    of June through August, the Company hedged the sales price on



                                       13

<PAGE>



    approximately  30%, or 552,800 megawatt hours, of the Ravenswood  Facility's
    estimated summer peak electric sales (or approximately 10% of the Ravenswood
    Facility's  estimated  yearly electric sales) to protect against a potential
    degradation in market prices during the summer. Under these swap agreements,
    the  Company  will  receive  a fixed  price  of $109  per  megawatt  hour of
    electricity sold during summer peak hours and pay the counter party the then
    current  floating  market price for peak electric  supply.  The Company will
    receive the then current  floating market price of peak electric energy when
    the  Ravenswood   Facility  sells  electric  energy  to  the  NYISO.   These
    derivatives  have been accounted for as cash-flow  hedges.  The Company also
    has a modest  tolling  arrangement  with a counter  party under which it has
    "locked-in" approximately five percent of its estimated summer season profit
    margin. Under this arrangement, the Company has received an up-front fee and
    will pay the counter party,  on a monthly basis,  its actual realized profit
    margin from the sale of electric energy.


8.    NEW FINANCIAL ACCOUNTING STANDARDS

     In June 1999, the Financial  Accounting  Standards  Board  ("FASB")  issued
     Statement of Financial  Accounting  Standard ("SFAS") No. 137,  "Accounting
     for  Derivative  Instruments  and  Hedging  Activities  -  Deferral  of the
     Effective  Date of SFAS No. 133." SFAS No. 137 defers the effective date of
     SFAS No. 133 to fiscal years  beginning  after July 15,  2000.  The Company
     will therefore adopt SFAS No. 133 in the first quarter of fiscal year 2001.
     SFAS No. 133 establishes  accounting and reporting standards for derivative
     instruments  and  for  hedging  activities.  It  requires  that  an  entity
     recognize all  derivatives as either assets or liabilities in the statement
     of financial position and measure those instruments at fair value.

    In June  2000,  the  FASB  issued  SFAS No.  138,  "Accounting  for  Certain
    Derivative Instruments and Certain Hedging Activities - An Amendment of FASB
    Statement  No  133."  SFAS No.  138  amends  the  accounting  and  reporting
    standards of SFAS No. 133 for a number of transactions. The most significant
    amendment  to SFAS 133 as it  relates  to the  Company  is that  the  normal
    purchases and normal sales exception found in SFAS 133 may now be applied to
    contracts that implicitly or explicitly permit net settlement, and contracts
    that have a market mechanism to facilitate net settlement.  Therefore, under
    SFAS  138  the  Company's  gas  procurement  contracts  are  not  considered
    derivative financial instruments.

    All of the Company's  derivative financial  instruments,  except for certain
    interest rate swaps, are cash-flow  hedges.  As a result,  implementation of
    SFAS No.  133 and 138 when  adopted,  are not  expected  to have a  material
    effect on the Company's net income,  but could have a significant  effect on
    comprehensive  income  because of  fluctuations  in the market  value of the
    derivatives employed for hedging certain risks. Under SFAS No. 133, periodic
    changes in market value of derivatives  which meet the definition of a hedge
    are recorded as comprehensive  income,  subject to  effectiveness,  and then
    included in net income to match the underlying hedged transactions.

                                        14
<PAGE>

9.         KEYSPAN GAS EAST CORPORATION SUMMARY FINANCIAL DATA

      KeySpan Gas East Corporation d/b/a/ KeySpan Energy Delivery Long Island is
      a wholly owned subsidiary of KeySpan Corporation.  KeySpan Energy Delivery
      Long Island was formed on May 7, 1998 and on May 28, 1998  acquired all of
      the assets  related to the gas  distribution  business  of the Long Island
      Lighting  Company  ("LILCO").  KeySpan  Energy  Delivery  Long  Island has
      established a program for the  issuance,  from time to time, of up to $600
      million  aggregate  principal amount of Medium-Term  Notes,  which will be
      fully and unconditionally guaranteed by the Company. (See Note 4 "Issuance
      of Long-Term Debt, Repayment of Notes Payable and Financing.") On February
      1, 2000, KeySpan Energy Delivery Long Island issued $400 million of 7.875%
      Medium Term Notes due 2010.

      The following represents  summarized balance sheet data for KeySpan Energy
Delivery Long Island.
                                                        (IN THOUSANDSOF DOLLARS)
----------------------------------------- --------------------------------------
                                            June 30, 2000      December 31, 1999
----------------------------------------- --------------------------------------
Current assets                            $   326,758          $    358,415
Noncurrent assets                             1,370,375           1,327,692
Current liabilities                           150,190               548,331
Noncurrent liabilities
           including long-term debt           857,615               484,702
Net assets (1)                            $   689,328          $    653,074
----------------------------------------- --- ----------------------------------

(1) Net Assets  reflect  total assets less current and  noncurrent  liabilities.
Intercompany  accounts  receivable  are included in current assets and long-term
intercompany accounts payable are included in noncurrent liabilities.





Certain common assets which were previously part of LILCO's  operations prior to
May 28, 1998 have been  transferred to other  subsidiaries  of the Company (e.g.
common plant, inventory, etc.). Since May 28, 1998, KeySpan Energy Delivery Long
Island has been charged by  affiliated  companies  for the use of these  assets,
resulting in an operating expense of $2.9 million and $5.5 million for the three
and six months ended June 30, 2000, respectively.

      The following  represents  summarized  income  statement  data for KeySpan
Energy Delivery Long Island.
<TABLE>
<CAPTION>

                                                                                               (IN THOUSANDS OF DOLLARS)
------------------------------- ---------------------- -------------------- --------------------- ----------------------


                                 Three Months Ended    Three Months Ended     Six Months Ended      Six Months Ended
                                    June 30, 2000         June 30, 1999        June 30, 2000          June 30, 1999
------------------------------- ---------------------- -------------------- --------------------- ----------------------
<S>                             <C>                    <C>                  <C>                  <C>
Revenues                        $118,582               $99,972              $417,241              $368,274

Operating Income (1)            $    642                $9,844               $77,527               $88,833

Net Income (Loss)               $(7,379)               $(2,184)              $36,255               $40,746
------------------------------- ---------------------- -------------------- --------------------- ----------------------
</TABLE>

(1)  Operating  income is defined  as  revenues  less cost of gas and  operating
expenses.  Operating  expenses  include the following  expenses:  operations and
maintenance, depreciation and amortization and operating taxes.


                                       15

<PAGE>


                      KEYSPAN CORPORATION AND SUBSIDIARIES

                                    SIGNATURE



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant has duly caused this report to be signed on behalf of the undersigned
there unto duly authorized.



                                                            KEYSPAN CORPORATION
                                                            -------------------
                                                               (Registrant)



Date: January 10, 2001                               /s/ Gerald Luterman
                                                 ----------------------------
                                                        Gerald Luterman

                                                   Senior Vice President and
                                                   Chief Financial Officer



Date: January 10, 2001                              /s/ Ronald S. Jendras
                                                 ----------------------------
                                                       Ronald S. Jendras

                                                   Vice President, Controller
                                                   and Chief Accounting Officer




                                        16