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 March 31, 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 May 3, 2000
---------------------------                         ---------------------------
       $.01 par value                                       133,876,426


<PAGE>
EXPLANATORY NOTE:

     The Company  hereby amends Part I of its quarterly  report on Form 10-Q for
the period  ended March 31, 2000 to reflect the  inclusion of a new footnote No.
8,  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 -
         March 31, 2000 and December 31, 1999                               3

         Consolidated Statement of Income -
         Three Months Ended March 31, 2000 and 1999                         5

         Consolidated Statement of Cash Flows -
         Three Months Ended March 31, 2000 and 1999                         6

         Notes to Consolidated Financial Statements                         7

Signatures                                                                 16



                                        2

<PAGE>



                           CONSOLIDATED BALANCE SHEET
                            (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>

                                                                       MARCH 31, 2000           December 31, 1999
                                                                          (Unaudited)                (Audited)
---------------------------------------------------------------      ------------------------   -----------------
<S>                                                                      <C>                  <C>
ASSETS
CURRENT ASSETS
   Cash and temporary cash investments                       $             219,338    $          128,602
   Customer accounts receivable                                            708,183               425,643
   Other accounts receivable                                               263,237               235,156
   Allowance for uncollectible accounts                                    (30,893)              (20,294)
   Special deposits                                                         48,802                60,863
   Gas in storage, at average cost                                          36,397               144,256
   Materials and supplies, at average cost                                  92,367                84,813
   Other                                                                    73,888                98,914
                                                                   ---------------       ---------------
                                                                         1,411,319             1,157,953
                                                                  ----------------      ----------------


EQUITY INVESTMENTS AND OTHER                                               444,542               391,731
                                                                  ----------------      ----------------

PROPERTY
   Electric                                                              1,355,217             1,346,851
   Gas                                                                   3,473,376             3,449,384
   Other                                                                   389,685               375,657
   Accumulated depreciation                                             (1,624,278)           (1,589,287)
   Gas exploration and production, at cost                               1,231,840             1,177,916
   Accumulated depletion                                                  (541,517)             (520,509)
                                                                  ----------------      ----------------
                                                                         4,284,323             4,240,012
                                                                  ----------------      ----------------

DEFERRED CHARGES
   Regulatory assets                                                       322,690               319,167
   Goodwill, net of amortizations                                          332,043               255,778
   Other                                                                   371,268               366,050
                                                                  ----------------      ----------------
                                                                         1,026,001               940,995
                                                                  ----------------      ----------------

                                                                  ----------------      ----------------
TOTAL ASSETS                                                 $           7,166,185    $        6,730,691
                                                                  ================      ================
</TABLE>






See accompanying Notes to the Consolidated Financial Statements.



                                        3

<PAGE>



                           CONSOLIDATED BALANCE SHEET
                            (IN THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>
                                                                       MARCH 31, 2000              December 31, 1999
                                                                      (Unaudited)                    (Audited)
---------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                    <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
   Current redemption of preferred stock                     $               363,000 $              363,000
   Accounts payable and accrued expenses                                     614,552                645,347
   Notes payable                                                                   -                208,300
   Dividends payable                                                          61,321                 61,306
   Taxes accrued                                                             154,878                 50,437
   Customer deposits                                                          30,463                 31,769
   Interest accrued                                                           32,703                 28,093
                                                                   -----------------      -----------------
                                                                           1,256,917              1,388,252
                                                                   -----------------      -----------------

DEFERRED CREDITS AND OTHER LIABILITIES
   Regulatory liabilities                                                     37,649                 26,618
   Deferred income tax                                                       187,512                186,230
   Postretirement benefits and other reserves                                500,406                501,603
   Other                                                                      81,702                 66,200
                                                                   -----------------      -----------------
                                                                             807,269                780,651
                                                                   -----------------      -----------------

CAPITALIZATION
   Common stock, $.01 par value, authorized
   450,000,000 shares; outstanding 133,876,426 and
   133,866,077 shares stated at                                            2,973,388              2,973,388
   Retained earnings                                                         558,055                456,882
   Accumulated foreign currency adjustment                                     7,366                  7,714
   Treasury stock purchased                                                 (722,660)              (722,959)
                                                                   -----------------      -----------------
      Total common shareholders' equity                                    2,816,149              2,715,025
   Preferred stock                                                            84,339                 84,339
   Long-term debt                                                          2,109,120              1,682,702
                                                                   -----------------      -----------------
TOTAL CAPITALIZATION                                                       5,009,608              4,482,066
                                                                   -----------------      -----------------

MINORITY INTEREST IN SUBSIDIARY COMPANIES                                     92,391                 79,722
                                                                   -----------------       ----------------
TOTAL LIABILITIES AND CAPITALIZATION                         $             7,166,185 $            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
                                                                       ENDED                   Ended
                                                                   MARCH 31, 2000          March 31, 1999
-------------------------------------------------------------- ----------------------  ---------------------
<S>                                                                  <C>                      <C>

REVENUES
Gas Distribution                                                $        804,703     $          718,298
Electric Services                                                        334,404                174,858
Gas Exploration and Production                                            49,376                 26,520
Energy Related Services and Other                                        128,130                 41,432
                                                                    ------------       ----------------
Total Revenues                                                         1,316,613                961,108
                                                                    ------------       ----------------
OPERATING EXPENSES
Purchased gas                                                            412,005                324,269
Purchased fuel                                                            68,493                      -
Operations and maintenance                                               354,605                232,535
Depreciation, depletion and amortization                                  69,581                 58,185
Operating taxes                                                          115,423                103,893
                                                                    ------------       ----------------
Total Operating Expenses                                               1,020,107                718,882
                                                                    ------------       ----------------

OPERATING INCOME                                                         296,506                242,226
                                                                    ------------       ----------------

OTHER INCOME AND (DEDUCTIONS)
Income from equity investments                                             7,245                  2,972
Interest income                                                            2,591                 11,043
Minority interest                                                         (3,029)                  (304)
Other                                                                      5,128                  3,249
                                                                    ------------       ----------------
Total Other Income                                                        11,935                 16,960
                                                                    ------------       ----------------
INCOME BEFORE INTEREST CHARGES
  AND INCOME TAXES                                                       308,441                259,186
                                                                    ------------       ----------------
INTEREST CHARGES                                                          44,125                 35,886
                                                                    ------------       ----------------
INCOME TAXES
   Current                                                                95,633                 46,646
   Deferred                                                               (3,561)                33,433
                                                                    ------------       ----------------
Total Income Taxes                                                        92,072                 80,079
                                                                    ------------       ----------------
NET INCOME                                                               172,244                143,221
Preferred stock dividend requirements                                      8,691                  8,689
                                                                    ------------       ----------------
EARNINGS FOR COMMON STOCK                                       $        163,553     $          134,532
Foreign currency adjustment                                                 (348)                 3,310
                                                                    ------------       ----------------
COMPREHENSIVE INCOME                                            $        163,205     $          137,842
                                                                    ============       ================
AVERAGE COMMON SHARES OUTSTANDING (000)                                  133,873                142,981
BASIC AND DILUTED EARNINGS PER COMMON SHARE                     $           1.22     $             0.94
                                                                    ============       ================
</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
                                                                                       ENDED                Ended
                                                                                   MARCH 31, 2000       March 31, 1999
------------------------------------------------------------------------------- -------------------- -------------------
<S>                                                                                <C>                  <C>
OPERATING ACTIVITIES
Net Income                                                                      $     172,244    $        143,221
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
      PROVIDED BY (USED IN) OPERATING ACTIVITIES
   Depreciation, depletion and amortization                                            69,581              58,185
   Deferred income tax                                                                 (3,561)             33,433
   Income from equity investments                                                      (7,245)             (2,972)
   Dividends from equity investments                                                    1,863               4,296
CHANGES IN ASSETS AND LIABILITIES
   Accounts receivable                                                               (215,498)            (67,635)
   Materials and supplies, fuel oil and gas in storage                                101,262             102,612
   Accounts payable and accrued expenses                                               42,769             (85,303)
   Interest accrued                                                                     4,606              (2,230)
   Special deposits                                                                    12,061              24,858
   Prepayments and other                                                               12,182              (5,279)
                                                                                    ---------      --------------
Net Cash Provided by Operating Activities                                             190,264             203,186
                                                                                    ---------      --------------

INVESTING ACTIVITIES
Capital expenditures                                                                 (111,574)            (76,545)
Investments                                                                          (141,719)             (9,786)
Other                                                                                   7,089              12,438
                                                                                    ---------      --------------
Net Cash (Used in) Investing Activities                                              (246,204)            (73,893)
                                                                                    ---------      --------------

FINANCING ACTIVITIES
Treasury stock purchased                                                                    -             (54,061)
Issuance of notes payable                                                             364,479
Repayment of notes payable                                                           (572,779)                  -
Issuance of long-term debt                                                            430,395               7,000
Payment of long-term debt                                                              (4,000)                  -
Preferred stock dividends paid                                                         (8,838)             (8,689)
Common stock dividends paid                                                           (59,575)            (64,360)
Other                                                                                  (3,006)               (621)
                                                                                    ---------      --------------
Net Cash Provided by (Used in) Financing Activities                                   146,676            (120,731)
                                                                                    ---------      --------------
Net Increase in Cash and Temporary Cash Investments                                    90,736               8,562
                                                                                    =========      ==============
Cash and temporary cash investments at beginning of period                      $     128,602    $        942,776
Net Increase in cash and temporary cash investments                                    90,736               8,562
                                                                                    ---------      --------------
Cash and Temporary Cash Investments at End of Period                            $     219,338    $        951,338
                                                                                    =========      ==============
</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 March 31,  2000,  and the results of
   its  operations  and cash flows for the three months ended March 31, 2000 and
   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 Related  Services,  Energy Related
   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, and 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.




                                        7

<PAGE>



   The Electric  Services segment consists of Company  subsidiaries that operate
   the electric  transmission and distribution ("T&D") system owned by LIPA, own
   and sell capacity and energy to 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  through  long-term  service
   contracts  having terms that range from eight to fifteen years.  The Electric
   Services  segment also  includes  Company  subsidiaries  that own,  lease and
   operate  the  2,168  megawatt   Ravenswood   electric   generation   facility
   ("Ravenswood Facility"),  located in Long Island City, Queens. Currently, the
   Company's  primary electric  generation  customers are LIPA, and the New York
   Independent System Operator ("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.  Upon such
   conversion,  the Company's common equity ownership interest in THEC increased
   from 64% to approximately 70%.

   The Company's Energy Related 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 five
   lines  of  business:  (i)  equipment   installation  of  plumbing,   heating,
   ventilation  and  air  conditioning  ("HVAC")  equipment;  (ii)  service  and
   maintenance of energy systems and appliances for  commercial,  industrial and
   residential customers;  (iii) energy sales of gas and electricity,  including
   transportation and related services,  largely to retail customers,  including
   those served by the Company's two gas distribution  subsidiaries,  as well as
   the Ravenswood Facility; (iv) professional  engineering-consulting and design
   of  energy  systems  for  commercial  and  industrial   customers;   and  (v)
   telecommunications  which provide  various  services to carriers of voice and
   data transmission on Long Island and in New York City.

   Subsidiaries  in the Energy  Related  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  Transco  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 accounted for under the equity method.  Accordingly,
   equity  income  from  these  investments  is  reflected  in other  income and
   (deductions) in the Consolidated Statement of Income.

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



                                        8

<PAGE>



   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 March 31, 2000, the total
   assets of each  reportable  segment  have not changed  materially  from those
   levels reported at December 31, 1999,  except for the Energy Related Services
   segment whose assets increased by approximately $200 million 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 months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>

        THREE MONTHS ENDED MARCH 31                                                 (In Thousands of Dollars)
-------------------------------------------------------------------------------------------------------------
                                         Gas Distribution                            Electric Services
                                   ----------------------------                -----------------------------

                                        2000              1999                      2000               1999
                                   --------------  -- ------------           ------------- ---  ------------
<S>                                    <C>            <C>                         <C>             <C>
Revenue                           $      804,703 $      718,298              $      334,404 $       174,858
                                  -------------- --------------              -------------- ---------------
Purchased Gas / Fuel                     374,890        311,254                      68,493               -
Operations and Maintenance               111,963        101,549                     133,662          92,167
Depreciation & Amortization               27,296         24,254                      12,265           9,928
Operating Taxes                           75,496         72,453                      39,490          28,991
Intercompany Billings                      2,597          3,049                      10,882          10,645
                                  --------------  -------------              -------------- ---------------
    Total Expense                        592,242        512,559                     264,792         141,731
                                  -------------- --------------              -------------- ---------------
Operating Income                  $      212,461 $      205,739              $       69,612 $        33,127
                                  -------------- --------------              -------------- ---------------
Earnings for Common Stock         $      126,779 $      120,690              $       42,679 $        16,585
                                  -------------- --------------              -------------- ---------------
Basic and Diluted Earnings Per
Share                             $         0.95 $         0.84              $         0.32 $          0.12
------------------------------------------------ ------------------------------------------ ---------------
</TABLE>

<TABLE>
<CAPTION>
         THREE MONTHS ENDED MARCH 31                                                In Thousands of Dollars)
------------------------------------------------------------------------------------------------------------
                                   Gas Exploration and Production                 Energy Related Services
                                   ----------------------------                -----------------------------

                                        2000              1999                      2000               1999
                                   --------------  -- ------------          ------------- ---  ------------
<S>                                     <C>            <C>                         <C>             <C>
Revenue                           $       49,376 $       26,520               $      126,619   $     40,834
                                  -------------- --------------               -----------------------------
Purchased Gas                                  -              -                       37,115         13,015
Operations and Maintenance                11,479          5,959                       88,725         30,030
Depreciation, Depletion & Amortization    21,003         17,057                        2,186            717
Operating Taxes                              538             33                            -              3
                                  -------------- --------------               -----------------------------
    Total Expense                         33,020         23,049                      128,026         43,765
                                  -------------- --------------               -----------------------------
Operating Income (Loss)           $       16,356 $        3,471               $       (1,407)  $     (2,931)
                                  -------------- --------------               -----------------------------
Earnings (Loss) for Common Stock  $        5,498 $          478               $       (1,570)  $     (1,637)
                                  -------------- --------------               -----------------------------
Basic and Diluted
     Earnings (Loss) Per Share    $        0.04  $         0.00               $        (0.01)  $      (0.01)
------------------------------------------------ ---------------------------- -----------------------------
</TABLE>





                                        9

<PAGE>



<TABLE>
<CAPTION>

         THREE MONTHS ENDED MARCH 31                                                    (In Thousands of Dollars)
-----------------------------------------------------------------------------------------------------------------
                                    Energy Related Investments                             Other
                                   ----------------------------                -----------------------------

                                        2000              1999                      2000               1999
                                   --------------  -- ------------          ------------- ---  ------------
<S>                                      <C>           <C>                           <C>            <C>
Revenue                           $        1,511 $          598               $            -    $         -
                                  -------------- --------------               ----------------  -----------
Operations and Maintenance                 1,657          1,272                        7,119          1,558
Depreciation & Amortization                  384            384                        6,447          5,845
Operating Taxes                                5              7                         (106)         2,406
Intercompany Billings                          -              -                      (13,479)       (13,694)
                                  -------------- --------------               -----------------  ----------
    Total Expense                          2,046          1,663                          (19)        (3,885)
                                  -------------- --------------               -----------------  ----------
Operating (Loss) Income           $         (535)$       (1,065)              $           19     $    3,885
                                  -------------- --------------               -----------------------------
Earnings (Loss) for Common Stock  $        3,647 $          499               $      (13,480)    $   (2,083)
                                  -------------- --------------               -----------------------------
Basic and Diluted
     Earnings (Loss) Per Share    $        0.02   $        0.00               $         (0.10)   $    (0.01)
------------------------------------------------ ---------------------------- -----------------------------
</TABLE>



THREE MONTHS ENDED MARCH 31           (In Thousands of Dollars)
--------------------------------------------------------------------------------
                                             Consolidated
                                    -------------------------------

                                            2000               1999
                                   --------------------------------
Revenue                            $      1,316,613   $     961,108
                                   --------------------------------
Purchased Gas / Fuel                        480,498         324,269
Operations and Maintenance                  354,605         232,535
Depreciation, Depletion & Amortization       69,581          58,185
Operating Taxes                             115,423         103,893
---------------                    --------------------------------
    Total Expense                         1,020,107         718,882
                                   --------------------------------
Operating Income                   $        296,506   $     242,226
                                   --------------------------------
Earnings for Common Stock          $        163,553   $     134,532
                                   --------------------------------
Basic and Diluted Earnings Per Share  $        1.22   $        0.94
-------------------------------------------------------------------




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.




                                       10

<PAGE>



         The  Company   presently   estimates   the  cost  of  its   MGP-related
         environmental  cleanup  activities will be approximately  $121 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 two are subject
         to the  negotiation  of an ACO or an  agreement  under DEC's  Voluntary
         Clean-up  Program.  The Company's  remaining MGP sites,  eight of which
         have  recently been  identified  to the DEC, 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 March  31,  2000,  the  Company  had a total
         regulatory asset of approximately $96 million. Expenditures incurred to
         date by the  Company  with  respect  to  MGP-related  activities  total
         approximately $18 million.

         OTHER:  The Company will be responsible for  environmental  obligations
         relating to the Ravenswood  Facility  operations other than liabilities
         arising from  pre-closing  disposal of waste at off-site  locations and
         any monetary fines arising from the prior owner's pre-closing  conduct.
         Based   on   information    currently   available   for   environmental
         contingencies  related  to the  Ravenswood  Facility  acquisition,  the
         Company has accrued an additional  $5 million as the minimum  liability
         expected to be incurred.


4.       ISSUANCE OF LONG-TERM DEBT, REPAYMENT OF NOTES PAYABLE AND
         FINANCING

         In December 1999,  KeySpan Energy  Delivery Long Island and the Company
         jointly filed a shelf  registration  statement  with the Securities and
         Exchange  Commission  ("SEC") in  anticipation  of issuing,  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  certain  promissory notes to LIPA that
         matured   in  June  1999.   The   Medium   Term  Notes  are  fully  and
         unconditionally guaranteed by the Company.



                                       11

<PAGE>



         During the quarter ended March 31, 2000, THEC borrowed an additional $2
         million  under  its  Credit  Facility  and then  repaid $4  million  of
         outstanding  borrowings;  at March  31,  2000,  $179  million  remained
         outstanding.  In addition,  during the quarter  ended March 31, 2000, a
         subsidiary  in the Energy  Related  Investments  segment  increased its
         borrowings   under  a  revolving   loan   agreement  with  a  financial
         institution in Canada by U.S. $28.4  million.  At March 31, 2000,  U.S.
         $114.8  million  was  outstanding  at  a  weighted  average  annualized
         interest rate of 5.81%.

         At December 31,  1999,  the Company had $208.3  million of  outstanding
         commercial  paper.  Additional  commercial  paper was issued during the
         months of January and  February  2000.  The average  outstanding  daily
         balance  during  this period was $241.4  million at a weighted  average
         annualized interest rate of 6.08%. In February 2000, the Company repaid
         the entire outstanding  balance.  At March 31, 2000, the Company had no
         commercial paper outstanding.

         In  connection  with the  Company's  anticipated  purchase  of  Eastern
         Enterprises (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 April 30, 2000,  the Company has entered into
         seven forward interest rate lock agreements with an aggregate  notional
         amount of $500  million.  The interest  lock rates range from 7.172% to
         7.780%.  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 counterparty credit risk.


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.  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 as a purchase.  The  increased  size and scope of
         the combined organization should enable the



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<PAGE>



         Company to provide  enhanced,  cost-effective  customer  service and to
         capitalize on the above-average growth opportunities for natural gas in
         the Northeast.

         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.  The  restructured  EnergyNorth  merger  is  expected  to close
         contemporaneously   with   the   KeySpan/Eastern   transaction.    This
         transaction has a total value of approximately $250 million.

         It is  anticipated  that the combined  company will have assets of $8.8
         billion, $4.3 billion in revenues, and earnings before interest, taxes,
         depreciation and amortization ("EBITDA") of approximately $950 million.
         The combined companies will serve  approximately 2.4 million customers.
         The Company expects  pre-tax annual cost savings will 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.  The Company  expects to
         issue  approximately  $2.0  billion of  long-term  debt to acquire  the
         combined  common  stock  of  Eastern  and   EnergyNorth.   The  Company
         anticipates  issuing several different  maturities of long-term debt to
         balance its current capital structure and maturity structure.

         Following  the closing of these  transactions,  the Company will become
         subject to regulation of the SEC as a registered  holding company under
         the Utility Holding Company Act of 1935, as amended.

         The merger is conditioned upon the approval of the SEC. Shareholders of
         both  Eastern and  EnergyNorth,  as well as the New  Hampshire  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 third or fourth  quarter  of 2000,  but is
         unable to determine when or if the required approval will be obtained.

          Eastern  owns and operates  Boston Gas Company,  Colonial Gas Company,
          Essex Gas Company, Midland Enterprises Inc. ("Midland"), Transgas Inc.
          ("Transgas"), and ServicEdge Partners, Inc. ("ServicEdge").


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

         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 available to replace energy that is unable



                                       13

<PAGE>



         to be generated due to the unexpected loss of a major facility.  Due to
         the increase in the market-clearing price of certain ancillary services
         in February  2000,  the NYISO has  imposed a bid cap on these  services
         retroactive to March 1, 2000. Further,  the NYISO has asked the Federal
         Energy Regulatory  Commission ("FERC") to review the pricing of certain
         ancillary services,  implement bid caps for these services and initiate
         an Alternative  Dispute  Resolution  process  designed at arriving at a
         settlement  that  would  involve  the  payment of refunds of so- called
         alleged  "excess  payments"  received  by  sellers  into the  ancillary
         services market,  including the Ravenswood Facility and LIPA during the
         period January 29 through February 29, 2000. Other market participants,
         including buyers of ancillary  services and electric  utilities as load
         serving entities ("LSEs") have also filed petitions with and intervened
         in the various pending FERC  proceedings and have proposed  alternative
         remedies,  including  refunds  back to the  inception  of the  NYISO in
         November 1999 and the  revocation  of the  authority of the  Ravenswood
         Facility  to charge  market-based  prices for  ancillary  services.  In
         addition,  one LSE  has  petitioned  the  FERC  to  suspend  the use of
         market-based  pricing in the energy market until alleged  problems with
         the operations of the NYISO are resolved.

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

7.       NEW FINANCIAL ACCOUNTING STANDARDS

         In June 1999, the Financial  Accounting Standards Board ("FASB") issued
         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. 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 when adopted, is 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 are recorded as comprehensive  income,
         subject to effectiveness,  and then included in net income to match the
         underlying transactions.


8.         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.

                                        14

<PAGE>



           The following  represents  summarized  balance sheet data for KeySpan
Energy Delivery Long Island.
                                                       (IN THOUSANDS OF DOLLARS)
-------------------------------------- -----------------------------------------
                                         March 31, 2000        December 31, 1999
-------------------------------------- -----------------------------------------
Current assets                         $   342,241               $    358,415
Noncurrent assets                        1,346,735                  1,327,692
Current liabilities                        139,884                    548,331
Noncurrent liabilities
    including long-term debt               852,385                    484,702
Net assets (1)                         $   696,707               $    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 $2.6  million  for the three
           months ended March 31, 2000.

           The following represents summarized income statement data for KeySpan
Energy Delivery Long Island.

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


                               Three Months Ended        Three Months Ended
                                 March 31, 2000            March 31, 1999
------------------------------ -------------------------------------------------

Revenues                       $298,660                      $268,302

Operating Income (1)           $76,885                       $78,989

Net Income                     $43,633                       $42,930
------------------------------ -------------------------------------------------

(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





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