SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
(Mark One)
[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
              For the quarterly period ended September 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 1-11023
                              E'town CORPORATION
             (Exact name of registrant as specified in its charter)
       New Jersey                                         22-2596330
(State of incorporation)                    (I.R.S. Employer Identification No.)
    600 South Avenue
  Westfield, New Jersey                                     07090
(Address of principal executive offices)                  (Zip Code)

         Registrant's telephone number, including area code:    (908) 654-1234

 Title of each class                  Name of each exchange on which registered
Common Stock, without par value                 New York Stock Exchange

                        Commission file number 0-628
                         ELIZABETHTOWN WATER COMPANY
            (Exact name of registrant as specified in its charter)
   New Jersey                                              22-1683171
(State of incorporation)                    (I.R.S. Employer Identification No.)
  600 South Avenue
 Westfield, New Jersey                                      07090
(Address of principal executive offices)                  (Zip Code)

         Registrant's telephone number, including area code:     (908) 654-1234

Title of each class                   Name of each exchange on which registered
Senior Unsecured Debentures                            None
Mandatory Redeemable Preferred Stock                   None

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_____

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the latest practicable date
                                                   Outstanding at
 Class of Common Stock:                          September 30, 2000
 E'town Corporation (without par value)              8,890,371
 Elizabethtown Water Company (without par value)*    1,974,902

 * All shares are owned by E'town Corporation
===============================================================================
<PAGE>


                    E'TOWN CORPORATION AND SUBSIDIARIES
               ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY

                                  INDEX


-------------------------------------------------------------------------------

PART I - FINANCIAL INFORMATION                                       PAGE

Item 1. Financial Statements

 E'TOWN CORPORATION AND SUBSIDIARIES

    - Statements of Consolidated Income                                1
    - Consolidated Balance Sheets                                     2-3
    - Statements of Consolidated Capitalization                        4
    - Statements of Consolidated Shareholders' Equity                  5
    - Statements of Consolidated Cash Flows                            6

 ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY

    - Statements of Consolidated Income                                7
    - Consolidated Balance Sheets                                     8-9
    - Statements of Consolidated Capitalization                        10
    - Statements of Consolidated Shareholder's Equity                  11
    - Statements of Consolidated Cash Flows                            12

  E'TOWN CORPORATION AND SUBSIDIARIES AND
  ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY

    - Notes to Consolidated Financial Statements                       13

      Item 2. Management's Discussion and Analysis of Consolidated
              Financial Condition and Results of Operations            21

PART II - OTHER INFORMATION                                            28

      Items 1 - 5

      Item 6 (a) - Exhibits                                            28
             (b) - Reports on Form 8-K                                 28

      SIGNATURES                                                       29
<PAGE>

E'TOWN CORPORATION AND SUBSIDIARIES
(In Thousands Except Per Share Amounts)   Three Months Ended  Nine Months Ended
            (Unaudited)                       September 30,      September 30,
                                              2000    1999       2000     1999

================================================================================
Operating Revenues                        $ 42,428 $ 45,593 $ 122,385 $ 122,680
--------------------------------------------------------------------------------
Operating Expenses:
  Operation                                 16,867   17,236    52,773    49,703
  Maintenance                                1,505    1,644     5,066     4,813
  Depreciation and amortization              4,207    3,848    12,581    11,233
  Revenue taxes                              4,532    4,956    12,961    13,238
  Real estate, payroll and other taxes       1,012      891     3,219     2,753
  Federal income taxes                       2,926    4,209     6,361     9,277
--------------------------------------------------------------------------------
        Total operating expenses            31,049   32,784    92,961    91,017
--------------------------------------------------------------------------------
Operating Income                            11,379   12,809    29,424    31,663
--------------------------------------------------------------------------------
Other Income (Expense):
  Allowance for equity funds used during
    construction                               189       61       414       277
  Federal income taxes                        (116)    (139)     (421)   (1,691)
  Gain on sale of land (Note 8)                                           3,197
  Other - net                                  143      228       809     1,093
--------------------------------------------------------------------------------
        Total other income                     216      150       802     2,876
--------------------------------------------------------------------------------
Total Operating and Other Income            11,595   12,959    30,226    34,539
--------------------------------------------------------------------------------
Interest Charges:
  Interest on long-term debt                 4,746    3,884    13,969    12,090
  Other interest expense - net               1,184      901     3,568     1,757
  Capitalized interest                        (137)     (93)     (337)     (258)
  Amortization of debt discount
   and expense-net                             117      111       346       331
--------------------------------------------------------------------------------
Total interest charges                       5,910    4,803    17,546    13,920
--------------------------------------------------------------------------------
Income Before Preferred Stock Dividends
   of Subsidiary                             5,685    8,156    12,680    20,619
Preferred Stock Dividends                      203      203       609       609
--------------------------------------------------------------------------------
Net Income                                $  5,482 $  7,953 $  12,071 $  20,010
================================================================================

Earnings Per Share of Common Stock (Note 7):
--------------------------------------------------------------------------------
      Basic                               $   0.62 $   0.92 $    1.37 $    2.34
      Diluted                             $   0.61 $   0.91 $    1.36 $    2.30
--------------------------------------------------------------------------------

Average Number of Shares Outstanding for
   the Calculation of Earnings Per Share:
--------------------------------------------------------------------------------
      Basic                                  8,872    8,612     8,823     8,562
      Diluted                                9,095    8,887     9,076     8,843
--------------------------------------------------------------------------------

Dividends Paid Per Common Share           $  0.51  $   0.51 $    1.53 $    1.53
================================================================================

See Notes to Consolidated Financial Statements.


                                    -1-
<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 (In Thousands)                                  September 30,
                                                     2000           December 31,
Assets                                           (Unaudited)            1999
--------------------------------------------------------------------------------


Utility Plant-At Original Cost:
  Utility plant in service                         $ 779,769          $ 779,485
  Construction work in progress                       40,634             17,441
--------------------------------------------------------------------------------
        Total utility plant                          820,403            796,926
   Less accumulated depreciation                     147,349            137,587
--------------------------------------------------------------------------------
        Utility plant-net                            673,054            659,339
--------------------------------------------------------------------------------


Non-utility Property and Other
  Investments - Net (Note 8)                          81,762             85,163
--------------------------------------------------------------------------------


Current Assets:
  Cash and cash equivalents                            7,843              4,367
  Customer and other accounts receivable
   (less reserve: 2000, $1,385, 1999, $1,044)
   (Note 8)                                           28,437             30,129
  Mortgage and other notes receivable                  2,217              4,600
  Unbilled revenues                                   13,998             12,972
  Infrastructure loan funds receivable (Note 5)        1,286              5,657
  Materials and supplies-at average cost               4,464              4,069
  Prepaid federal income taxes                           453              4,617
  Prepaid insurance, taxes, other                      1,708              3,663
--------------------------------------------------------------------------------
        Total current assets                          60,406             70,074
--------------------------------------------------------------------------------


Deferred Charges:
  Waste residual management                            1,419              1,538
  Unamortized debt and preferred stock expenses        9,362              9,419
  Taxes recoverable through future rates              13,466             13,466
  Postretirement benefit expense                       2,963              3,145
  Flood expenditures                                   5,659              5,000
  Other unamortized expenses                           3,986              1,164
--------------------------------------------------------------------------------
        Total deferred charges                        36,855             33,732
--------------------------------------------------------------------------------
            Total                                  $ 852,077          $ 848,308
================================================================================

See Notes to Consolidated Financial Statements.

                                    -2-
<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)                                  September 30,
                                                    2000            December 31,
Capitalization and Liabilities                   (Unaudited)            1999
--------------------------------------------------------------------------------

Capitalization (Notes 4 and 5):
  Common shareholders' equity                      $ 236,631          $ 229,233
  Mandatory Redeemable Cumulative Preferred Stock     12,000             12,000
  Redeemable preferred stock                             227                227
  Long-term debt - net                               293,991            266,015
--------------------------------------------------------------------------------
        Total capitalization                         542,849            507,475
--------------------------------------------------------------------------------


Current Liabilities:
  Notes payable - banks                               81,500             89,500
  Long-term debt - current portion (Note 5)              583                494
  Accounts payable and other liabilities              23,605             31,434
  Contract obligations payable (Note 5)                                  19,000
  Customers' deposits                                    234                263
  Municipal and state taxes accrued                   13,411             17,682
  Interest accrued                                     5,583              4,219
  Preferred stock dividends accrued                       59                 59
--------------------------------------------------------------------------------
        Total current liabilities                    124,975            162,651
--------------------------------------------------------------------------------


Deferred Credits:
  Customers' advances for construction                43,744             41,321
  Federal income taxes                                73,964             71,236
  State income taxes                                     302                302
  Unamortized investment tax credits                   7,484              7,636
  Accumulated postretirement benefits                  2,323              3,571
--------------------------------------------------------------------------------
        Total deferred credits                       127,817            124,066
--------------------------------------------------------------------------------


Contributions in Aid of Construction                  56,436             54,116
--------------------------------------------------------------------------------


Commitments and Contingent Liabilities
--------------------------------------------------------------------------------
                Total                              $ 852,077          $ 848,308
================================================================================

See Notes to Consolidated Financial Statements.

                                    -3-
<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(In Thousands Except Share Amounts)             September 30,
                                                    2000            December 31,
                                                 (Unaudited)             1999
--------------------------------------------------------------------------------
Common Shareholders' Equity:
  E'town Corporation:
    Common stock without par value, authorized,
     15,000,000 shares, issued 2000, 8,922,925
     shares; 1999, 8,760,862 shares                $ 189,049            180,124
    Paid-in capital                                    1,216              1,315
    Capital stock expense                             (5,160)            (5,160)
    Retained earnings                                 52,494             53,922
    Less cost of treasury stock; 2000 and
     1999, 32,554 shares                                (968)              (968)
--------------------------------------------------------------------------------
        Total common shareholders' equity            236,631            229,233
--------------------------------------------------------------------------------
Preferred Shareholders' Equity
  Elizabethtown Water Company:
    Mandatory Redeemable Cumulative Preferred Stock:
      $100 par value, authorized, 200,000
       shares; $5.90 series, issued and
       outstanding, 120,000 shares                    12,000             12,000
   Cumulative Preferred Stock:
       $25 par value, authorized, 500,000
        shares; none issued
   Applied Wastewater Management, Inc.:
       Redeemable Preferred Stock:
       No par value, noncumulative, issued and
        outstanding, 227 shares                          227                227
--------------------------------------------------------------------------------
        Total preferred shareholders' equity          12,227             12,227
--------------------------------------------------------------------------------
Long-term Debt (Notes 5 and 8):
  E'town Corporation:
      6 3/4% Convertible Subordinated
       Debentures, due 2012                            7,390              8,705
      6.79% Senior Notes, due 2007                    12,000             12,000
      7.69% Senior Notes, due 2010                    30,000
  Applied Wastewater/Applied Water Management:
    6% Note Payable (due serially through 2027)          199                204
    9.65% Mortgage Note Payable (due 2001)                                  264
  Elizabethtown Water Company:
    7.20% Debentures, due 2019                        10,000             10,000
    7 1/2% Debentures, due 2020                       15,000             15,000
    6.60% Debentures, due 2021                        10,500             10,500
    6.70% Debentures, due 2021                        15,000             15,000
    8 3/4% Debentures, due 2021                       27,500             27,500
    8% Debentures, due 2022                           15,000             15,000
    5.60% Debentures, due 2025                        40,000             40,000
    7 1/4% Debentures, due 2028                       50,000             50,000
    Variable Rate Debentures, due 2027                50,000             50,000
  The Mount Holly Water Company:
    New Jersey Environmental Infrastructure
     Trust Notes (due serially through 2018)           5,373              5,677
    New Jersey Department of Environmental
     Protection Notes (due serially through 2018)      7,030              7,040
    9.65% Mortgage Note Payable (due 2001)                                  156
--------------------------------------------------------------------------------
        Total long-term debt                         294,992            267,046
    Unamortized (discount) premium-net                (1,001)            (1,031)
--------------------------------------------------------------------------------
        Total long-term debt-net                     293,991            266,015
--------------------------------------------------------------------------------
           Total Capitalization                    $ 542,849          $ 507,475
================================================================================

See Notes to Consolidated Financial Statements.

                                    -4-
<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(In Thousands Except Share Amounts)
                                               Nine Months Ended
                                                 September 30,      Year Ended
                                                   2000            December 31,
                                                 (Unaudited)           1999
--------------------------------------------------------------------------------

Common Stock:
  Balance at Beginning of Period                   $ 180,124          $ 169,324
  Common stock issued under Dividend Reinvestment
    and Stock Purchase Plan (2000, 117,507 shares;
    1999, 197,547 shares)                              7,299              8,702
  Redemption of Convertible Debentures
   (2000, 32,250 shares; 1999, 44,225 shares)          1,290              1,769
  Issuance of restricted stock under compensation
   programs (1999, 2,822 shares)                                            119
  Restricted stock (redeemed) in connection with
   acquisitions (1999, (25,756) shares)                                    (867)
  Exercise of stock options (2000, 12,500 shares;
    1999, 37,500 shares)                                3367              1,077
--------------------------------------------------------------------------------
  Balance at End of Period                           189,049            180,124
--------------------------------------------------------------------------------

Paid-in Capital:                                       1,216              1,315
--------------------------------------------------------------------------------

Capital Stock Expense:                                (5,160)            (5,160)
--------------------------------------------------------------------------------

Retained Earnings:
  Balance at Beginning of Period                      53,922             50,961
  Net Income                                          12,071             20,487
  Dividends on common stock (2000, $1.53;
   1999, $2.04)                                      (13,499)           (17,526)
--------------------------------------------------------------------------------
  Balance at End of Period                            52,494             53,922
--------------------------------------------------------------------------------


Treasury Stock:                                         (968)              (968)
--------------------------------------------------------------------------------

     Total Common Shareholders' Equity             $ 236,631          $ 229,233
================================================================================

See Notes to Consolidated Financial Statements.

                                   -5-
<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
                                                         Nine Months Ended
                  (Unaudited)                              September 30,
                                                      2000               1999
--------------------------------------------------------------------------------

Cash Flows Provided by Operating Activities:
 Net Income                                        $  12,071           $ 20,010
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                      12,581             11,233
   Gain on the sale of land                                              (3,197)
   Increase in deferred charges                       (3,362)            (2,094)
   Deferred income taxes and investment
    tax credits-net                                    2,576              2,280
   Capitalized interest and AFUDC                       (751)              (535)
   Other operating activities-net                     (1,158)             4,255
 Change in current assets and current liabilities
  excluding cash, short-term investments and
  current portion of debt :
     Customer and other accounts receivable            6,063             (5,490)
      Mortgage and other notes receivable              2,383             (3,746)
     Unbilled revenues                                (1,026)            (1,885)
     Accounts payable and other liabilities           (7,858)             1,917
     Accrued/prepaid interest and taxes                3,212             (1,483)
     Other                                              (395)               555
--------------------------------------------------------------------------------
     Net cash provided by operating activities        24,336             21,820
--------------------------------------------------------------------------------
Cash Flows Provided (Used) by Financing Activities:
 Proceeds from issuance of common stock                7,635              6,593
 Funds held in Trust by others                         4,520                 42
 Debt and preferred stock issuance and
  amortization costs                                      57                318
 Issuance of other long-term debt                     30,000
 Repayment of long-term debt                         (19,650)           (13,156)
 Contributions and advances for construction           6,566              3,998
 Refunds of customer advances for construction         1,823)            (2,566)
 Net increase (decrease) in notes payable - banks     (8,000)            37,057
 Dividends paid on common stock                      (13,499)           (13,087)
--------------------------------------------------------------------------------
    Net cash flows provided by financing activities    5,806             19,199
--------------------------------------------------------------------------------
Cash Flows Used for Investing Activities:
 Utility plant and other capital expenditures
  (excluding allowance for funds used during
  construction)                                      (24,013)           (35,181)
 Purchase of companies                                                   (1,800)
Capital expenditures on non-regulated property        (2,653)            (1,787)
 Proceeds from sale of land                                               2,069
--------------------------------------------------------------------------------
    Net cash flows used for investing activities     (26,666)           (36,699)
--------------------------------------------------------------------------------
Net Increase in Cash
  and Cash Equivalents                                 3,476              4,320
Cash and Cash Equivalents at
  Beginning of Period                                  4,367              5,909
--------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period         $   7,843          $  10,229
================================================================================
Supplemental Disclosures of Cash
  Flow Information:
    Cash paid during the year for:
      Interest (net of amount capitalized)         $  15,201          $  12,859
      Income taxes                                 $   1,800          $   7,100
      Preferred stock dividends                    $     531          $     531
   Noncash issuance of common stock                $   1,290          $   1,233

See Notes to Consolidated Financial Statements.

                                      -6-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED INCOME
               (In Thousands)
                  (Unaudited)
                                          Three Months Ended   Nine Months Ended
                                             September 30,        September 30,
                                             2000     1999      2000     1999
--------------------------------------------------------------------------------
Operating Revenues                        $ 35,929 $ 39,204 $ 103,051 $ 105,779
--------------------------------------------------------------------------------
Operating Expenses:
  Operation                                 11,919   12,932    36,285    37,064
  Maintenance                                1,388    1,536     4,593     4,439
  Depreciation                               3,460    3,197    10,380     9,591
  Revenue taxes                              4,503    4,944    12,876    13,209
  Real estate, payroll and other taxes         827      755     2,567     2,384
  Federal income taxes                       3,230    4,068     7,726     9,336
--------------------------------------------------------------------------------
        Total operating expenses            25,327   27,432    74,427    76,023
--------------------------------------------------------------------------------
Operating Income                            10,602   11,772    28,624    29,756
--------------------------------------------------------------------------------
Other Income (Expense):
  Allowance for equity funds used
  during construction                          189       61       414       277
  Federal income taxes                        (108)    (133)     (389)     (495)
  Other - net                                  118      201       713       850
--------------------------------------------------------------------------------
        Total other income                     199      129       738       632
--------------------------------------------------------------------------------
Total Operating and Other Income            10,801   11,901    29,362    30,388
--------------------------------------------------------------------------------
Interest Charges:
  Interest on long-term debt                 3,819    3,507    11,453    10,959
  Other interest expense - net                 729      490     2,610       868
  Allowance for funds used
   during construction                        (137)     (75)     (337)     (240)
  Amortization of debt discount
   and expense-net                             101       99       299       295
--------------------------------------------------------------------------------
        Total interest charges               4,512    4,021    14,025    11,882
--------------------------------------------------------------------------------
Net Income                                   6,289    7,880    15,337    18,506
Preferred Stock Dividends                      203      203       609       609
--------------------------------------------------------------------------------
Earnings Applicable To Common Stock       $  6,086 $  7,677 $  14,728 $  17,897
================================================================================

See Notes to Consolidated Financial Statements.

                                       -7-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands)                                   September 30,
                                                    2000            December 31,
Assets                                           (Unaudited)            1999
--------------------------------------------------------------------------------

Utility Plant-At Original Cost:
  Utility plant in service                         $ 770,664          $ 770,251
  Construction work in progress                       40,603             17,495
--------------------------------------------------------------------------------
        Total utility plant                          811,267            787,746
  Less accumulated depreciation and amortization     146,444            136,975
--------------------------------------------------------------------------------
        Utility plant-net                            664,823            650,771
--------------------------------------------------------------------------------


Non-utility Property (Note 8)                          2,815              7,337
--------------------------------------------------------------------------------


Current Assets:
  Cash and cash equivalents                            3,644              1,342
  Customer and other accounts receivable
   (less reserve: 2000, $704, 1999, $674)             19,459             19,341
  Unbilled revenues                                   11,362             10,578
  Infrastructure loan funds receivable (Note 5)        1,286              5,657
  Materials and supplies-at average cost               4,464              4,069
  Prepaid federal income taxes                         1,492              5,807
  Prepaid insurance, taxes, other                      1,570              3,229
--------------------------------------------------------------------------------
        Total current assets                          43,277             50,023
--------------------------------------------------------------------------------


Deferred Charges:
   Waste residual management                           1,419              1,538
  Unamortized debt and preferred stock expenses        8,690              8,900
  Taxes recoverable through future rates              13,466             13,466
  Postretirement benefit expense                       2,963              3,145
  Flood expenditures                                   5,659              5,000
  Other unamortized expenses                           3,640              1,007
--------------------------------------------------------------------------------
        Total deferred charges                        35,837             33,056
--------------------------------------------------------------------------------
            Total                                  $ 746,752          $ 741,187
================================================================================

See Notes to Consolidated Financial Statements.

                                    -8-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands)                                   September 30,
                                                    2000            December 31,
Capitalization and Liabilities                   (Unaudited)            1999
--------------------------------------------------------------------------------


Capitalization (Note 4):
  Common shareholder's equity                      $ 228,989          $ 220,461
  Mandatory redeemable cumulative preferred stock     12,000             12,000
  Long-term debt - net                               244,402            244,842
--------------------------------------------------------------------------------
        Total capitalization                         485,391            477,303
--------------------------------------------------------------------------------


Current Liabilities:
  Notes payable - banks                               53,000             51,500
  Long-term debt - current portion                       575                481
  Accounts payable and other liabilities              13,349             19,989
  Customers' deposits                                    169                197
  Municipal and state taxes accrued                   13,308             17,592
  Interest accrued                                     4,691              3,745
  Preferred stock dividends accrued                       59                 59
--------------------------------------------------------------------------------
        Total current liabilities                     85,151             93,563
--------------------------------------------------------------------------------


Deferred Credits:
  Customers' advances for construction                42,532             40,019
  Federal income taxes                                72,034             69,570
  Unamortized investment tax credits                   7,484              7,636
  Accumulated postretirement benefits                  2,143              3,399
--------------------------------------------------------------------------------
        Total deferred credits                       124,193            120,624
--------------------------------------------------------------------------------


Contributions in Aid of Construction                  52,017             49,697
--------------------------------------------------------------------------------


Commitments and Contingent Liabilities
--------------------------------------------------------------------------------
                Total                              $ 746,752          $ 741,187
================================================================================

See Notes to Consolidated Financial Statements.

                                    -9-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(In Thousands)                                   September 30,
                                                     2000           December 31,
                                                  (Unaudited)           1999
--------------------------------------------------------------------------------

Common Shareholder's Equity (Note 4):
  Common stock without par value, authorized,
   15,000,000 shares, issued 2000 and 1999,
   1,974,902 shares                                $  15,741          $  15,741
  Paid-in capital                                    148,874            141,575
  Capital stock expense                                 (485)              (485)
  Retained earnings                                   64,859             63,630
--------------------------------------------------------------------------------
      Total common shareholder's equity              228,989            220,461
--------------------------------------------------------------------------------

Preferred Shareholders' Equity:
 Mandatory Redeemable Cumulative Preferred Stock
   $100 par value, authorized, 200,000 shares;
   $5.90 series, issued and outstanding,
   120,000 shares                                     12,000             12,000

 Cumulative Preferred Stock:
   $25 par value, authorized, 500,000 shares;
    none issued
--------------------------------------------------------------------------------

 Long-term Debt:
  Elizabethtown Water Company:
    7.20% Debentures, due 2019                        10,000             10,000
    7 1/2% Debentures, due 2020                       15,000             15,000
    6.60% Debentures, due 2021                        10,500             10,500
    6.70% Debentures, due 2021                        15,000             15,000
    8 3/4% Debentures, due 2021                       27,500             27,500
    8% Debentures, due 2022                           15,000             15,000
    5.60% Debentures, due 2025                        40,000             40,000
    7 1/4% Debentures, due 2028                       50,000             50,000
   Variable Rate Debentures, due 2027                 50,000             50,000
  The Mount Holly Water Company:
    New Jersey Environmental Infrastructure Trust
     Notes (due serially through 2018)                 5,373              5,677
    New Jersey Department of Environmental
     Protection Notes (due serially through 2018)      7,030              7,040
    9.65% Mortgage Note Payable (due 2001)                                  156
--------------------------------------------------------------------------------
        Total long-term debt                         245,403            245,873
    Unamortized discount-net                          (1,001)            (1,031)
--------------------------------------------------------------------------------
        Total long-term debt-net                     244,402            244,842
--------------------------------------------------------------------------------
           Total Capitalization                    $ 485,391          $ 477,303
================================================================================

See Notes to Consolidated Financial Statements.

                                    -10-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(In Thousands)
                                               Nine Months Ended
                                                 September 30,       Year Ended
                                                     2000           December 31,
                                                 (Unaudited)             1999
--------------------------------------------------------------------------------


Common Stock:                                      $  15,741          $  15,741
--------------------------------------------------------------------------------

Paid-in Capital:
  Balance at Beginning of Period                     141,575            132,753
  Capital Contributed by Parent Company from:
     Common Stock Issued Under Dividend
      Reinvestment and Stock Purchase Plan             7,299              8,702
     Issuance of Restricted and Unrestricted
      Stock Under Compensation Programs                                     120
--------------------------------------------------------------------------------
  Balance at End of Period                           148,874            141,575
--------------------------------------------------------------------------------

Capital Stock Expense                                   (485)              (485)
--------------------------------------------------------------------------------

Retained Earnings:
  Balance at Beginning of Period                      63,630             60,564
  Net income                                          15,337             21,405
  Dividends on common stock                          (13,499)           (17,526)
  Dividends on preferred stock                          (609)              (813)
--------------------------------------------------------------------------------
  Balance at End of Period                            64,859             63,630
--------------------------------------------------------------------------------

     Total Common Shareholder's Equity             $ 228,989          $ 220,461
================================================================================

See Notes to Consolidated Financial Statements.

                                -11-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED CASH FLOWS
            (In Thousands)
               (Unaudited)                             Nine Months Ended
                                                          September 30,
                                                     2000               1999
--------------------------------------------------------------------------------
Cash Flows from Operating Activities:
 Net income                                        $  15,337          $  18,506
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization                     10,380              9,591
    Increase in deferred charges                      (3,173)            (2,657)
    Deferred income taxes and investment tax
      credits-net                                      2,312              2,178
    Allowance for funds used during construction        (751)              (517)
    Other operating activities-net                    (1,042)                64
 Change in current assets and current liabilities
  excluding cash, short-term investments and
  current portion of debt :
      Customer and other accounts receivable           4,253             (4,901)
      Unbilled revenues                                 (784)            (1,668)
      Accounts payable and other liabilities          (6,668)              (683)
      Accrued/prepaid interest and taxes               2,636             (3,148)
      Other                                             (473)               106
--------------------------------------------------------------------------------
      Net cash provided by operating activities       22,027             16,871
--------------------------------------------------------------------------------

Cash Flows Provided (Used) by Financing Activities:
 Capital contributed by parent company                 7,299              6,456
 Funds held in Trust by others                         4,520                 42
 Debt and preferred stock issuance and
   amortization costs                                    210                345
 Repayment of long-term debt                            (376)               (23)
 Contributions and advances for construction           6,566              3,998
 Refunds of customer advances for construction        (1,733)            (2,384)
 Net increase in notes payable - banks                 1,500             24,000
 Dividends paid on common stock and preferred stock  (14,030)           (13,618)
--------------------------------------------------------------------------------
     Net cash provided by financing activities         3,956             18,816
--------------------------------------------------------------------------------

Cash Flows Used for Investing Activities:
 Utility plant expenditures (excluding allowance
  for funds used during construction)                (23,681)           (33,125)
Purchase of company                                                        (860)
--------------------------------------------------------------------------------
    Cash used for investing activities               (23,681)           (33,985)
--------------------------------------------------------------------------------
Net Increase in Cash and
  Cash Equivalents                                     2,302              1,702
Cash and Cash Equivalents at
  Beginning of Period                                  1,342              3,598
--------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period         $   3,644          $   5,300
================================================================================
Supplemental Disclosures of Cash
  Flow Information:
    Cash paid during the year for:
     Interest (net of amount capitalized)          $  12,084          $  10,453
     Income taxes                                  $   1,800          $   7,100
     Preferred stock dividends                     $     531          $     531
See Notes to Consolidated Financial Statements.

                                -12-
<PAGE>
                     E'TOWN CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  ORGANIZATION
    E'town Corporation (E'town), a New Jersey holding company, is the parent
    company of Elizabethtown Water Company (Elizabethtown or Company), Edison
    Water Company (Edison), E'town Properties, Inc. (Properties), Liberty
    Water Company (Liberty), Applied Water Management, Inc. (AWM) and Applied
    Wastewater Management, Inc. (AWWM). The Mount Holly Water Company (Mount
    Holly) is a wholly-owned subsidiary of Elizabethtown. The Corporation and
    its subsidiaries as a consolidated entity are referred to herein as the
    Corporation. The assets and operating results of Elizabethtown constitute
    the predominant portions of E'town's assets and operating results. The
    regulated utilities, Elizabethtown, Mount Holly and AWWM, comprise the
    Regulated Utilities segment, Liberty and Edison comprise the Contract
    Operations segment, AWM is the Engineering/Operations and Construction
    segment and E'town and Properties comprise the Financing and Investment
    segment.

2.  PENDING MERGER
    On November 21, 1999, E'town entered into an agreement (Merger Agreement)
    with Thames Water Plc (Thames Water) under which Thames Water has agreed,
    subject to certain conditions, to acquire E'town for $68 per share in
    cash.  Thames Water will also assume the debt of the Corporation. The
    acquisition will take the form of a merger (Merger) of E'town with a newly
    formed subsidiary of Thames Water and E'town will be the surviving company.
    A special meeting of shareholders  was held on May 18, 2000 at which time
    the E'town shareholders approved the transaction.

    On December 20 1999,  the Company applied to the New Jersey Board of
    Public Utilities (BPU) to approve the merger with Thames Water.  On May
    19, 2000 the Utility Workers Union of America, AFL-CIO and the Utility
    Workers Union of America Local 423 (collectively referred to as the
    "unions"), which represent certain employees of Elizabethtown and Mount
    Holly, intervened in the merger proceeding before the BPU. On June 7, 2000
    the BPU granted the unions intervention status.

    On October 10, 2000 the BPU approved the acquisition of E'town by Thames
    Water pursuant to the terms of a Stipulation among the parties to the
    BPU's proceeding.  In the Stipulation, the parties agreed to certain terms
    and conditions, including that neither Elizabethtown, Mount Holly nor AWWM
    will file for a rate increase before April 1, 2001 and that each of their
    rate increases cannot be effective until at least March 1, 2002.  The
    parties also agreed  that the rate requests cannot exceed 18 percent.

     Certain required clearances have been obtained  from the New Jersey
     environmental regulators and E'town expects the remaining clearances to be
     obtained shortly.  The transaction is expected to close prior to the end
     of 2000.

3.   INTERIM FINANCIAL STATEMENTS
     The financial statements reflect all adjustments which, in the opinion of
     management, are necessary for a fair presentation. The Notes to
     Consolidated Financial Statements accompanying the 1999 Annual Report to
     Shareholders and the 1999 Form 10-K should be read in conjunction with
     this report.

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities
     and disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period.
                                    -13-
<PAGE>
    New Accounting Pronouncements
    In 1998, the Financial Accounting Standards Board (FASB) issued Statement
    of Financial Accounting Standards (SFAS) No. 133, "Accounting for
    Derivative Instruments and Hedging Activity". In June 1999, the FASB
    issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
    Activity - Deferral of the Effective Date of SFAS No. 133" to defer the
    effective date of SFAS No. 133 for one year. Consequently, SFAS No. 133
    is now effective for all fiscal quarters of all fiscal years beginning
    after June 15, 2000.  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."   The Corporation is
    evaluating SFAS Nos. 133 and 138 but does not believe they  will have a
    significant  impact on  the Corporation's financial condition and results
    of operations.  In December 1999, the Securities and Exchange Commission
    released Staff Accounting Bulletin No. 101 (SAB 101) which provides
    guidance on the timing of revenue recognition in financial statements. SAB
    101 provides specific criteria to assist in this determination. The
    adoption of SAB 101 is not expected to have an impact on the present
    revenue recognition practices of the Corporation and therefore, there is
    no expected impact on the Corporation's financial statements.

4.  CAPITALIZATION
    E'town routinely makes equity contributions to Elizabethtown from the
    proceeds of common stock issued under E'town's Dividend Reinvestment and
    Stock Purchase Plan (DRP). E'town contributed $2.31 million and $7.30
    million from the DRP proceeds to Elizabethtown for the three and nine
    month periods ended September 30, 2000, respectively.  Optional Cash
    Payments under the DRP are not accepted after November 9, 2000.

5.  LONG-TERM DEBT
    In February 2000, E'town issued $30 million of 7.69% Senior Notes due 2010
    in a private placement.  The proceeds were used to repay short-term debt
    incurred to finance the acquisition of the contract to operate the water
    system of the city of Elizabeth and capital expenditures for the
    non-regulated subsidiaries.

    E'town also has outstanding $12 million of 6.79% Senior Notes due December
    15, 2007. The Note Agreements for E'town's 6.79% and 7.69%  Senior Notes
    require the maintenance of a consolidated fixed  charges coverage ratio of
    at least 1.5 to 1 and a debt to total capitalization ratio not to exceed
    .65 to 1. As of September 30, 2000, the fixed charges coverage ratio was
    1.78  to 1 and the debt to total capitalization ratio was .62 to 1,
    calculated in accordance with the Note Agreements.

    In conjunction with the Merger, on October 27 2000, E'town  issued a
    notice of redemption of the 6.79% and 7.69% Senior Notes, such redemption
    to occur on the day of the closing with Thames Water at par plus a make-
    whole premium of approximately $3.86 million.  Additionally, in conjunction
    with the Merger, E'town on October 25 issued a notice to redeem the 6 3/4%
    Convertible Subordinated Debentures at par on November 27.

    The aggregate maturities of the Corporation's long-term  debt  (including
    the portion classified as current and contract obligations payable, but
    excluding the above-mentioned optional redemptions) as of December 31,
    1999 for each of the succeeding five years are: 2000, $19.49 million;
    2001, $.58 million; 2002, $.59 million; 2003, $.60 million and 2004, $.61
    million.  Included in the Corporation's amounts are Elizabethtown's
    aggregate long-term debt maturities for each of the five years succeeding
    December 31, 1999 : 2000, $.48 million; 2001, $.57 million; 2002, $.58
    million; 2003, $.59 million and 2004, $.60 million.

    In November 1998 Mount Holly closed on loan agreements that will make
    available up to $13.19 million through the New Jersey Environmental
    Infrastructure Trust Financing Program (Program). This Program provides
    financing through two loans. The first loan, in the amount of $7.30
    million, is through the New Jersey Environmental Infrastructure Trust
    (Trust), which issued tax-exempt bonds with average interest rates of
    4.7%. The second loan, in the amount of $5.89 million, is from the State

                                     -14-
<PAGE>
    of New Jersey, acting through the New Jersey Department of Environmental
    Protection. The State is participating in the Safe Drinking Water State
    Revolving Fund authorized by the Safe Drinking Water Act amendments of
    1996 whereby the federal government is funding the state loan at no
    interest cost. The effective interest rate for the combined notes is
    approximately 2.59%. The Company received $9.11 million from the Trust for
    reimbursement of qualified expenditures in the third quarter of 2000 and
    used these funds to repay the major portion of short-term debt incurred to
    finance the Mansfield Project, a construction project  that was
    undertaken  to comply with New Jersey legislative restrictions to obtain
    an alternative  water supply to reduce pumpage from an aquifer.   Mount
    Holly expects to requisition the balance of the funds in the fourth
    quarter of 2000 which  will be used to repay a portion of the short-term
    debt that had been incurred to finance the Mansfield Project.

6.  LINES OF CREDIT
    E'town has $115 million of uncommitted lines of credit with several banks,
    of which up to $55 million is available for use by its unregulated
    subsidiaries and $90 million is available to Elizabethtown.  Of the lines
    available to Elizabethtown, $10 million represents a committed line of
    credit. These lines, together  with internal funds and proceeds from
    capital contributions from Thames Water after the pending Merger,
    long-term debt, proceeds of tax-exempt New Jersey Economic Development
    Authority (NJEDA) bonds and short-term borrowings are expected to be
    sufficient to finance the Corporation's capital needs.

7.  EARNINGS PER SHARE
    Basic earnings per share are computed on the basis of the weighted average
    number of shares outstanding. Diluted earnings per share assumes both the
    conversion of the 6 3/4% Convertible Subordinated Debentures and common
    stock equivalents, assuming all stock options are exercised. The
    calculations of basic and diluted earnings per share for the three and
    nine month periods ended September 30, 2000 and 1999 follow:

                             Three Months         Nine Months
                                Ended                Ended
                            September 30,         September 30,
                           2000      1999      2000      1999
                          -------------------------------------
    In Thousands of
    Dollars Except Per
    Share Amounts
    Basic:
    Net Income             $5,482   $7,953   $12,071   $20,010
    Average common          8,872    8,612     8,823     8,562
    shares outstanding
                        --------------------------------------
    Basic earnings per     $ 0.62   $ 0.92   $  1.37   $  2.34
    share
                        ======================================

    Diluted:
    Net income             $5,482   $7,953   $12,071   $20,010
    After tax interest
    expense applicable
    to 6 3/4% Convertible
    Subordinated Debentures    84      106       263       328
                        --------------------------------------
    Adjusted net income    $5,566   $8,059   $12,334   $20,338
                        ======================================

    Average common          8,872    8,612     8,823     8,562
    shares outstanding
    Additional shares
    from assumed
    exercise of
       stock options           38       41        53        31
    Additional shares
    from assumed
    conversion of 6 3/4%
    Convertible Subordinated
    Debentures                185      234       200       250
    Average common
    shares outstanding
    as adjusted             9,095    8,887     9,076     8,843
                        --------------------------------------
    Diluted earnings       $ 0.61   $ 0.91   $  1.36   $  2.30
    per share
                        ======================================

                                     -15-
<PAGE>
8.  NON-UTILITY PROPERTY AND OTHER INVESTMENTS
    The  detail  of  amounts   included  in  Non-Utility   Property  and  Other
    Investments at September 30, 2000 and December 31, 1999 is as follows :


                                         2000      1999
                                        -----------------
    Thousands of Dollars Except Per
    Share Amounts

    Funds held in trust by others       $2,744    $7,264
    Other capital assets                    71        73
                                        -----------------
    Total Elizabethtown Water            2,815     7,337
    Company & Subsidiary
                                        -----------------
    Concession fees on privatization     52,774    53,946
    contracts  - net
    Capital assets from privatization     8,550     6,165
    contracts - net
    Investments in real estate            9,048     9,049
    Goodwill on AWM and AWWM              4,911     5,036
    acquisitions - net of
    amortization
    Investment in SEGS                    1,089     1,089
    Other capital assets                  2,395     2,356
    Other                                   180       185
                                        -----------------
    Total E'town Corporation &          $81,762   $85,163
    Subsidiaries                        =================

    E'town,  through Liberty, has a 40-year privatization agreement, entered
    into in July 1998  with the city of Elizabeth (Elizabeth), New Jersey to
    operate its water system which  serves approximately 17,600 customers.
    Under the contract, Liberty made concession payments to Elizabeth of $19.7
    million in 1998, $12 million in 1999 and $19 million in June 2000. These
    concession fee payments are being amortized on a straight-line basis over
    the life of the contract and are included in the table above. Under the
    terms of the contract, Liberty will deposit $57.8 million from customer
    collections over the 40-year contract into a fund administered by
    Elizabeth (Fund Deposits), of which $52.3 million is due after 2012.
    Elizabeth will use the Fund Deposits to pay for capital improvements or
    for other water system purposes. As these funds will be controlled by
    Elizabeth, they will be accounted for as a pass-through from customers to
    Elizabeth and will not be included in revenues or expenses of Liberty.
    Liberty is responsible for $7.45 million of construction expenditures,
    primarily for meter replacements, over the life of the contract as well as
    for all operating expenses. Of the construction commitments, approximately
    $2.45 million is expected to be expended in the next three years. The
    accumulated amortization of concession fees on privatization contracts and
    on capital assets from privatization contracts were $2.85 million and
    $1.90 million as of  September 30, 2000 and December 31, 1999,
    respectively. Over the life of the contract, Liberty  will bill the
    customers of the water system in accordance with rate increases set forth
    in the contract and receive all revenues except for the Fund Deposits.
    E'town has guaranteed Liberty's performance of  the contract provisions.

    Liberty also performs the commercial billing operations for the wastewater
    system of Elizabeth and remits all cash collected to Elizabeth. Liberty
    does not operate the  wastewater system. Included in the Consolidated
    Balance Sheets of the Corporation as Customer and Other Accounts
    Receivable at September 30, 2000 and December 31, 1999 are the receivables
    from the customers of Elizabeth for wastewater services in the amount of
    $2.9 million and $4.6 million, respectively. An equal amount of liability
    to Elizabeth is included in  Accounts Payable and Other Liabilities to
    reflect Liberty's obligation to remit these funds to Elizabeth as
    collected.

    E'town, through Edison, has a 20-year privatization agreement, entered
    into in June 1997,  with the township of Edison, New Jersey to operate its
    water system which  serves approximately 11,500 customers. Under the

                                     -16-
<PAGE>
    terms of the contract, Edison bills and receives all water revenues
    generated as a result of operating the water system of the township of
    Edison and pays all the operating expenses. Edison expects to make
    expenditures of approximately $25 million during the 20-year life of the
    contract of which $14.13 million has been spent as of September 30, 2000.
    Construction expenditures, as they are incurred, are being amortized on a
    straight-line basis over the remaining life of the contract. Expenditures
    include capital improvements to the water system as well as contract
    payments to the township of Edison. Of the total, approximately $2.94
    million is expected to be expended in the next three years of the
    contract. An initial payment of $5.7 million was made upon the closing and
    has been included in the table above. Concession fee payments included in
    the table above are also being amortized on a straight-line basis over the
    remaining life of te contract.  The accumulated amortization of concession
    fees on privatization contracts and on capital assets from privatization
    contracts were $.95 million and $.71 million as of September 30, 2000 and
    December 31, 1999, respectively. E'town has guaranteed Edison's
    performance of the contract provisions.

    If the Elizabeth or Edison contracts were terminated by either the
    township of Edison or the city of Elizabeth, the unamortized balance of
    the concession fees and amounts paid for additional capital improvements
    would be refunded to Liberty and Edison in accordance with the contracts

    Included in Non-Utility Property and Other Investments at September 30,
    2000 and December 31, 1999 are $9.05 million of investments in various
    parcels of undeveloped land in New Jersey. In February 1999, Properties
    sold a parcel of land which had been under contract since 1995 in Green
    Brook, New Jersey for $5.83 million, at a gain of $2.00 million net of
    taxes. Cash proceeds of $1.99 million were received in 1999 and the
    remaining amount due  was financed  with a 7.75% mortgage, to be paid over
    2 years. The remaining $1.92 million mortgage balance, including accrued
    interest  is included in Mortgage and Other Notes Receivable in the
    Corporation's Consolidated Balance Sheet as of September 30, 2000.
    Properties sold a small parcel in Clinton, New Jersey in 1999 for $.6
    million at a gain of less than $.1 million net of taxes. The sale proceeds
    are being invested into water and wastewater projects.  Properties has
    entered into contracts for sale for all of its remaining parcels. The
    eventual sale of these parcels is contingent upon the purchaser obtaining
    various approvals for development. This process could take up to several
    years. Based upon the expected sales prices for these properties under the
    contracts, the estimated net realizable value of each property exceeds its
    respective carrying value as of September 30, 2000.

    Included in Non-Utility Property and Other Investments at September 30,
    2000 and December 31, 1999 is an investment of $1.09 million ($.35 million
    net of related deferred taxes) in a limited partnership that owns Solar
    Electric Generating System V (SEGS), located in California. E'town owns a
    3.19% interest in SEGS. The investment is being accounted for on the
    equity method. E'town continues to monitor the relationship between the
    carrying and net realizable values of its investment in SEGS, based upon
    information provided by SEGS management as well as through cash flow
    analyses.

    During 1999 AWM made certain investments in non-regulated  wastewater
    assets for $1.7 million. Of this amount $1.2 million was recorded as other
    capital assets and $.5 million was recorded as goodwill. The goodwill is
    being amortized over 10 years.


9.  REGULATORY MATTERS
    MOUNT HOLLY
    In December 1999, Mount Holly completed a construction project, called the
    Mansfield Project, to comply with New Jersey legislative restrictions to
    obtain alternative water supplies, thereby reducing its water pumpage from
    an aquifer, which had been subject to over-pumping by Mount Holly and
    various local purveyors in a portion of southern New Jersey.

    Effective January 1, 2000, Mount Holly received an increase in annual
    rates of $1.88 million. This increase included costs for the Mansfield
    Project. After elimination of a purchased water adjustment clause (PWAC),

                                     -17-
<PAGE>
    the net rate increase was $.51 million. This increase also reflects
    additional construction and financing costs, as well as higher operating
    costs since base rates were last established in January 1996.

    In June 1999, Mount Holly purchased Homestead Water Utility, Inc. and AWWM
    purchased  Homestead Treatment Utility, Inc. for a combined cash price of
    $1.8 million. The entities provide water and wastewater services to
    approximately 800 customers of the Homestead community in southern New
    Jersey. The transactions were accounted for as purchases.

10. SEGMENT REPORTING
    SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
    Information," requires that companies disclose segment data based upon how
    management makes decisions, allocates resources and measures performance.
    Segment data for the three and nine month periods ended September 30, 2000
    and 1999 is presented as follows :

                                     -18-
<PAGE>
                         Three Months Ended   Nine Months Ended
                            September 30,        September 30,

In Thousands of Dollars      2000      1999      2000     1999
                         -----------------------------------------
Operating Revenues:
Regulated Utilities        $36,137   $$39,290  $103,660   $105,987
Contract Operations          5,122     5,642     15,287     14,727
Engineering/Operations/
 Construction                3,279      2,757     9,564      8,004
Intersegment Elimination    (2,110)    (2,096)   (6,126)    (6,038)
                         -----------------------------------------
Consolidated Operating     $42,428   $45,593   $122,385   $122,680
Revenues
                         =========================================

Operating Expenses:
Regulated Utilities        $25,519   $$27,560   $74,977   $$76,318
Contract Operations          4,234      4,566    12,976     12,603
Engineering/Operations/
 Construction                3,214      2,618    10,099      7,690
Financing & Investment         192        136     1,035        444
Intersegment Elimination    (2,110)    (2,096)   (6,126)    (6,038)
                         -----------------------------------------
Consolidated Operating     $31,049    $32,784   $92,961    $91,017
Expenses
                         =========================================

Interest Expense:
Regulated Utilities         $4,557     $4,034   $14,161    $11,900
Contract Operations            681        396     1,626        995
Engineering/Operations/
 Construction                   59          1       111          6
Financing & Investment         613        372     1,648      1,019
                         -----------------------------------------
Consolidated Interest       $5,910     $4,803   $17,546    $13,920
Expense
                         =========================================

Depreciation and
Amortization Expense:
Regulated Utilities         $3,550     $3,225   $10,650     $9,674
Contract Operations            492        557     1,446      1,359
Engineering/Operations/
 Construction                  135         31       395         91
Financing & Investment          30         35        90        109
                         -----------------------------------------
Consolidated Depreciation   $4,207     $3,848   $12,581    $11,233
and Amortization Expense
                         =========================================

Net Income (Loss):
Regulated Utilities         $6,052     $7,612   $14,637    $17,799
Contract Operations            223        680       732      1,183
Engineering/Operations/
 Construction                    6        138      (646)       308
Financing & Investment        (799)      (477)   (2,652)       720
                         -----------------------------------------
Consolidated Net Income     $5,482     $7,953   $12,071    $20,010
                         =========================================


                                  Total Assets       Total Debt
                            ------------------- -----------------
                             As of    As of     As of    As of
                          September December  September December
                              30,      31,        30,       31,
                             2000     1999       2000      1999
                           ---------------------------------------
Regulated Utilities        755,638   $750,690   300,278   $299,398
Contract Operations         73,912     72,921    36,123     44,624
Engineering/Operations/
 Construction                8,320      7,506     3,448      2,067
Financing & Investment      61,919     51,574    78,015     59,660
Intersegment Elimination   (47,712)   (34,383)  (41,790)   (30,740)
                         -----------------------------------------
Consolidated Total        $852,077   $848,308  $376,074   $375,009
Assets
                         =========================================

                                    -19-
<PAGE>
11. OTHER MATTERS
    Elizabethtown has secured the right to acquire the water system of the
    Borough of Manville, New Jersey for $4.9 million and the voters of
    Manville approved the acquisition in the general election on November 7,
    2000. Elizabethtown will file a petition with the BPU for approval of the
    franchise. A closing is expected to occur upon receipt of such approval.

    In September 1999, Elizabethtown  withdrew its primary water treatment
    plant, the Raritan-Millstone Water Treatment Plant (Plant), from service
    as a result of flooding from Tropical Storm Floyd (Floyd). For several
    days, Elizabethtown had difficulty maintaining adequate water pressure in
    portions of its distribution system because overall system production
    levels were substantially less than normal. Customers in portions of a few
    municipalities were  without  water service for approximately 3 days.
    Costs incurred to repair and replace equipment damaged by the flood and to
    respond to inquiries by customers, regulatory bodies and the media have
    been deferred and are expected to be recoverable through insurance. The
    Company has incurred  $9.7  million of flood-related expenditures and has
    received advanced reimbursements of $4.0 million from its insurance
    carrier. The remaining $5.7 million of flood-related expenditures is
    reported on the Consolidated Balance Sheet as a deferred charge at
    September 30, 2000 (see Note 12 for legal matters related to Floyd).

12. LEGAL MATTERS
    On September 23, 1999, two parties filed separate class action law suits
    for compensatory damages and related fees on behalf of themselves and
    similarly situated residential and commercial customers against
    Elizabethtown Water Company, Edison Water Company and Liberty Water
    Company. The law suit alleges breach of contract, breach of tariff,
    negligence and products liability regarding the quantity and quality of
    water services provided by the Corporation during the period in September
    1999 when Elizabethtown's plant was flooded from Hurricane Floyd and was
    withdrawn from service for approximately three days. Upon notifying its
    insurance carrier of the law suit, the insurance carrier has taken a
    position that there is no coverage for breach of contract and has reserved
    its rights under the policy regarding breach of tariff. The insurance
    carrier has neither limited nor denied coverage for negligence and
    products liability. Elizabethtown filed a Motion for Summary
    Judgment to dismiss the law suit as a class action proceeding prior
    to answering the plaintiff's allegations.  In March, 2000, the New
    Jersey Superior Court denied the Motion for Summary Judgment and referred
    the case to the New Jersey Board of Public Utilities (NJBPU) for purposes
    of investigating the matter and reporting its findings to the New Jersey
    Superior Court.  The New Jersey Superior Court, in view of the NJBPU's
    findings will then determine what, if any, damages were suffered by the
    plaintiffs and what, if any, liability rests with Elizabethtown.

    The Corporation maintains that the plaintiffs' allegations are without
    merit, believes that the plaintiffs' chances of prevailing are not
    probable, and that those allegations specifically not covered by insurance
    pose immaterial liability.

                                     -20-
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      E'town Corporation (E'town), a New Jersey holding company, is the parent
      company of Elizabethtown Water Company (Elizabethtown or Company),
      Edison Water Company (Edison), E'town Properties, Inc. (Properties),
      Liberty Water Company (Liberty), Applied Water Management, Inc. (AWM)
      and Applied Wastewater Management, Inc. (AWWM). The Mount Holly Water
      Company (Mount Holly) is a  wholly-owned subsidiary of Elizabethtown.
      The assets and operating results of Elizabethtown constitute the
      predominant portions of E'town's assets and operating results. Mount
      Holly, Liberty, AWM and Edison contributed 3.2%, 5.4%, 7.4% and 1.6%,
      respectively, of the Corporation's consolidated operating revenues for
      1999. Reference to the Corporation and its subsidiaries as a
      consolidated entity is referred to herein as E'town. The regulated
      utilities, Elizabethtown, Mount Holly and AWWM, comprise the Regulated
      Utilities segment, Liberty and Edison comprise the Contract Operations
      segment, AWM is the Engineering/Operations and Construction segment and
      E'town and Properties comprise the Financing and Investment segment (See
      Note 10 to E'town's Notes to Consolidated Financial Statements). The
      following analysis sets forth significant events affecting the financial
      condition of the various segments at September 30, 2000 and the results
      of operations for the three and nine month periods ended September 30,
      2000 and 1999.

      PENDING MERGER
      On November 21, 1999, E'town entered into an agreement (Merger
      Agreement) with Thames Water Plc (Thames Water) under which Thames Water
      has agreed, subject to certain conditions, to acquire E'town for $68 per
      share in cash.  Thames Water will also assume the debt of the
      Corporation. The acquisition will take the form of a merger (Merger) of
      E'town with a newly formed subsidiary of Thames Water and E'town will be
      the surviving company. A special meeting of shareholders  was held on
      May 18, 2000 at which time the E'town shareholders approved the
      transaction.

      On December 20 1999,  the Company applied to the New Jersey Board of
      Public Utilities (BPU) to approve the merger with Thames Water.  On May
      19, 2000 the Utility Workers Union of America, AFL-CIO and the Utility
      Workers Union of America Local 423 (collectively referred to as the
      "unions"), which represent certain employees of Elizabethtown and Mount
      Holly, intervened in the merger proceeding before the BPU. On June 7,
      2000 the BPU granted the unions intervention status.

      On October 10, 2000 the BPU approved the acquisition of E'town by Thames
      Water pursuant to the terms of a Stipulation among the parties to the
      BPU's proceeding.  In the Stipulation, the parties agreed to certain
      terms and conditions, including that neither Elizabethtown, Mount Holly
      nor AWWM will file for a rate increase before April 1, 2001 and that
      each of their rate increases cannot be effective until at least March 1,
      2002.  The parties also agreed  that the rate requests cannot exceed 18
      percent.

      Certain required clearances have been obtained  from the New Jersey
      environmental regulators and E'town expects the remaining clearances to
      be obtained shortly.  The transaction is expected to close prior to the
      end of 2000.


      LIQUIDITY AND CAPITAL RESOURCES
      Capital Expenditures Program
      For the nine months ended September 30, 2000, capital expenditures were
      $16.6 million, principally comprised of other additions and improvements
      to water utility plant and wastewater facilities. In addition, Liberty
      disbursed $19.0 million to the City of Elizabeth in June 2000 for a

                                     -21-
<PAGE>
      scheduled concession payment. For the three years ending December 31,
      2002, capital and investment requirements for the Corporation are
      estimated to be $171.4 million, consisting of (i) expenditures for the
      Regulated Utilities Segment ($135.1 million for Elizabethtown, $4.7
      million for Mount Holly and $5.2 million for AWWM), (ii) investments in
      the Contract Operations segment for a scheduled concession payment by
      Liberty in June 2000 of $19.0 million and capital improvements for
      Liberty and Edison of $5.4 million, and (iii) investments in the
      Engineering/Operations and Construction segment of $2.0 million. These
      estimates do not include any amounts for possible additional
      acquisitions or privatization activities in the three-year period.

      REGULATED UTILITIES SEGMENT
      Elizabethtown
      Elizabethtown's three-year capital program includes $62.0 million for
      routine projects (services, hydrants, system rehabilitation and main
      extensions not funded by developers) and $73.1 million for transmission
      system upgrades, a new operations center, expansion of the capacity at
      Canal Road Water Treatment Plant (Canal Road) and other projects. Canal
      Road's treatment capacity will be expanded to provide for enhanced
      system reliability and to accommodate customer growth. Canal Road was
      designed as a 40 million gallon per day (MGD) plant, expandable to 200
      MGD.

      Mount Holly
      During the next three years, Mount Holly expects to spend $4.7 million,
      of which $3.3 million is for routine projects (services, hydrants and
      main extensions not funded by developers).

      In December 1999, Mount Holly completed a construction project, called
      the Mansfield Project, to comply with New Jersey legislative
      restrictions to obtain alternative water supplies, thereby reducing its
      water pumpage from an aquifer, which had been subject to over-pumping by
      Mount Holly and various local purveyors in a portion of southern New
      Jersey.

      Effective January 1, 2000, Mount Holly received an increase in annual
      rates of $1.88 million. This increase included costs for the Mansfield
      Project. After elimination of a purchased water adjustment clause
      (PWAC), the net rate increase was $.51 million. This increase also
      reflects additional construction and financing costs, as well as higher
      operating costs since base rates were last established in January 1996.

      AWWM
      AWWM expects to incur capital expenditures of $5.2 million in the next
      three years for purchases of wastewater plants from developers.

      CONTRACT OPERATIONS SEGMENT
      LIBERTY
      Under the contract to operate the water system of the city of Elizabeth,
      New Jersey, Liberty made payments to Elizabeth of $19.7 million in 1998,
      $12.0 million in June 1999 and  $19 million in June 2000. Under the
      terms of the contract, Liberty will deposit $57.8 million from revenues
      earned during the 40-year contract, of which $52.3 million is due after
      2012, into a fund administered by Elizabeth (Fund Deposits). Elizabeth
      will use the Fund Deposits  to pay for capital improvements or for other
      water system purposes. Liberty is responsible for $7.45 million of
      construction expenditures, primarily for meter replacements, during the
      life of the contract. Of the total construction expenditures,
      approximately $2.5 million is expected to be expended in the next three
      years.

      EDISON
      Under the contract to operate the water system of the township of
      Edison, New Jersey, Edison  Water Company expects to spend $2.9 million
      during the next three years to upgrade the system.

      ENGINEERING/OPERATIONS/CONSTRUCTION SEGMENT
      AWM
      AWM expects to incur capital expenditures of $2.0 million during the
      next three years,  primarily for vehicles and equipment used in the
      construction and waste hauling operations.

                                     -22-
<PAGE>
      Capital Resources
      During 1999 the Corporation financed 37.0% of its capital expenditures,
      including capital expenditures for the Regulated Utilities segment and
      investments in the Contract Operations and Engineering/Operations and
      Construction segments, from internally generated funds (after payment of
      common stock dividends). The balance was financed with a combination of
      short-term borrowings under lines of credit, proceeds from capital
      contributions from E'town (funded by issuances of Common Stock under
      E'town's Dividend Reinvestment and Stock Purchase Plan) and proceeds
      from the sale of real estate.

      For the three-year period ending December 31, 2002, the Corporation
      estimates that 52% of its currently projected capital expenditures and
      concession fee obligations for all segments are expected to be financed
      with internally generated funds (after payment of common stock
      dividends, at current levels). The balance is expected to be financed
      with a combination of proceeds from capital contributions from Thames
      Water, long-term debt, proceeds of tax-exempt New Jersey Economic
      Development Authority (NJEDA) bonds and short-term borrowings.
      Elizabethtown expects to pursue additional tax-exempt financing to the
      extent that final allocations are granted by the NJEDA.

      In November 1998 Mount Holly closed on loan agreements that will make
      available up to $13.2 million through the New Jersey Environmental
      Infrastructure Trust Financing Program (Program). This program provides
      financing through two loans. The first loan, in the amount of $7.3
      million, is through the New Jersey Environmental Infrastructure Trust
      (Trust), which issued tax-exempt bonds with average interest rates of
      4.7%. The second loan, in the amount of $5.9 million, is from the State
      of New Jersey, acting through the New Jersey Department of Environmental
      Protection. The State is participating in the Safe Drinking Water State
      Revolving Fund authorized by the Safe Drinking Water Act amendments of
      1996 whereby the federal government is funding the state loan at no
      interest cost. The effective interest rate for the combined notes is
      approximately 2.6%. The Company received $9.11 million from the Trust
      for reimbursement of qualified expenditures in the third quarter of 2000
      and used these funds to repay the major portion of short-term debt
      incurred to finance the Mansfield Project, a construction project  that
      was  undertaken  to comply with New Jersey legislative restrictions to
      obtain an alternative  water supply to reduce pumpage from an aquifer.
      Mount Holly expects to requisition the balance of the funds in the
      fourth quarter which  will be used to repay the remaining short-term
      debt that had financed the Mansfield Project.

      E'town' s senior debt is currently rated A3 and A and Elizabethtown's
      senior debt is currently rated A2 and A+ by Moody's Investors Service
      and Standard & Poor's Ratings Group, respectively.

      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
      INTEREST RATE RISK
      The Corporation is subject to the risk of fluctuating interest rates in
      the normal course of business. The Corporation manages interest rates
      through the use of fixed and, to a lesser extent, variable rate debt. A
      hypothetical single percentage point change in interest rates for the
      nine months ended September 30, 2000 would result in a $1.0 million
      change in interest costs related to short-term and variable rate debt
      and to earnings before tax.

      RESULTS OF OPERATIONS

      Net Income for the three months ended September 30, 2000  was $5.5
      million or $.62 per basic share compared to $8.0 million or $0.92 per
      basic share for the same period in 1999. This represents a decrease of

                                     -23-
<PAGE>
      31.1%. Net income for the nine months ended September 30, 2000 was $12.1
      million or $1.37 per basic share as compared with $20.0 million or $2.34
      per basic share for the same period in 1999. This represents a decrease
      of 39.7%.

      The decrease in net income of $2.5 million for the three month period
      resulted primarily from a reduction of $1.7 million in water consumption
      resulting from very different weather patterns between the respective
      quarters in 2000 and 1999 and increased interest costs of $.9 million on
      higher levels of debt incurred to finance the regulated utilities'
      ongoing capital programs and a scheduled concession fee payment for
      Liberty's privatization contract with the city of Elizabeth. These
      decreases were partially offset by a $.7 million reduction in the
      actuarially-determined pension expense.

      The decrease in net income of $7.9 million for the nine month period
      resulted primarily from : (i) $1.9 million in reduced  water consumption
      related to the unusual weather patterns noted above (ii) increased
      interest costs of $2.5 million to finance the regulated utilities'
      ongoing capital programs and the aforementioned concession fee payment
      (iii) $.9 million of costs associated with the pending Merger (iv) a $.9
      million increase in depreciation expense due to additional capital
      investment in the regulated utilities (v) a loss at AWM of $1.0 million
      and (vi) a sale of real estate in the first quarter of 1999 at an
      after-tax gain of $2.1 million. These decreases  were partially offset
      by a reduction of $.9 million in pension expense.

      Operating Revenues decreased $3.2 million or 6.9% for the three months
      ended September 30, 2000 compared to the same period in 1999.  Revenues
      for the Regulated Utilities segment and the Contract Operations segment
      declined by $3.2 million and $ .5 million, respectively due to the
      weather patterns noted above. These declines were partly offset by an
      increase of $.5 million in the Engineering/Operations and Construction
      segment for increased construction activity.

      Operating revenues for the nine month period decreased $.3 million or
      .2% over the same period in 1999. Revenues from the Regulated Utilities
      segment decreased $2.3 million, of  which $3.2 million reflects the
      aforementioned unusual weather patterns in 1999.  The decrease in the
      Regulated Utilities segment  was somewhat mitigated by increases of $.5
      million and $.4 million from Mount Holly and AWWM, respectively, due to
      Mount Holly's rate increase effective January 2000 and customer growth,
      principally from Mount Holly's acquisition in June, 1999 of Homestead
      Water Utility, Inc. and  AWWM's simultaneous acquisition of Homestead
      Treatment Utility, Inc.  Revenues from the Engineering/Operations and
      Construction segment increased $1.5 million due to a substantially
      higher level of construction activity.  Revenues from the Contract
      Operations segment increased $.5 million from increased  water
      consumption and increased rates.

      Operation Expenses decreased $.4 million or 2.1% for the three months
      ended September 30, 2000 as compared to the same period in 1999.
      Operations expenses of the Regulated Utilities segment decreased  $1.1
      million, primarily reflecting reductions in pension expense. Operation
      expenses increased $.5 million from the Engineering/Operations and
      Construction segment, primarily reflecting additional personnel costs as
      well as other operating costs to support  the higher levels of
      construction activity in 2000 and future customer growth opportunities.
      Costs associated with the pending Merger in the Financing and Investment
      segment accounted for a $.2 million increase. Operation expenses of the
      Contract Operations segment remained flat.

      Operation expenses for the nine month period increased $3.1 million or
      6.2% over the same period in 1999. While the Regulated Utilities segment
      decreased  $.9 million, primarily due to reductions in pension expense,
      operation expenses increased $2.4 million from the
      Engineering/Operations and Construction segment, primarily reflecting
      the aforementioned costs.  Expenses of the Financing and Investment
      segment associated with the pending Merger accounted for $1.3 million of
      the increase.  The Contract Operations segment accounted for $.3 million
      of the increase, principally due to purchased water costs.

                                     -24-
<PAGE>
      Maintenance Expenses decreased $.1 million or 8.4% and increased $.3
      million or 5.3% for the three month and nine month periods ended
      September 30, 2000, respectively. The Regulated Utilities segment
      accounted for the variances.  The increase for the nine month period is
      primarily from costs associated with harsh winter weather in 2000.

      Depreciation and Amortization Expense increased $.4 million or 9.3% for
      the three month period in 2000 as compared with the third quarter of
      1999. Of the increase, $.3 million is due to depreciation on additions
      to utility plant in the Regulated Utilities segment and $.1 million is
      due to amortization of goodwill from acquisition of a septic services
      business in 1999 in the Engineering/Operations and Construction segment.

      Depreciation and amortization expense for the nine month period
      increased $1.3 million or 12.0% over the same period in 1999.  Of the
      increase, $1.0 million is due to depreciation on additions to utility
      plant in the Regulated Utilities segment and $.3 million is due to
      amortization of goodwill from acquisition of a septic services business
      in 1999 in the Engineering/Operations and Construction segment.

      Revenue Taxes decreased $.4 million or 8.6% and $.3 million or 2.1% for
      the  three and nine month periods, respectively due to changes discussed
      above in the revenues of the Regulated Utilities segment.

      Real Estate, Payroll and Other Taxes Expenses increased $.1 million or
      13.6% and $.5 million or 16.9% for the three months and nine months
      ended September 30, 2000, respectively due to increased payroll taxes on
      higher labor costs as well as on the fair value of distributions of
      restricted stock awarded in 1997 under the incentive compensation
      programs.

      Federal Income Taxes as a component of operating expenses decreased $1.3
      million or 30.5% and $2.9 million or 31.4% for the three and nine month
      periods ended September 30, 2000 compared to 1999 due to changes in
      taxable operating income for each segment discussed herein.

      Other Income (Expense) remained relatively consistent for the  three
      months ended September 30, 2000 as compared with the same period in
      1999.

      Other income (expense) decreased $2.1 million or 72.1% for the nine
      months ended September 30, 2000 as compared with the same period in 1999
      principally due to  the recognition in the first quarter of 1999 of a
      gain of $3.2 million ($2.1 million after taxes) on the sale of a parcel
      of land in the Financing and Investment segment.

      Total Interest Charges increased $1.1 million or 23.1% for the three
      months ended September 30, 2000 over the same period in 1999. The
      increase is comprised of (i) $.5 million in the Regulated Utilities
      segment for interest expense incurred on an increased level of
      short-term bank notes used to fund Elizabethtown's and Mount Holly's
      capital expenditures and a higher interest rate on Elizabethtown's
      long-term variable rate debt  (ii) $.3 million in the Financing and
      Investment segment for interest costs to finance equity contributions by
      E'town to Liberty for concession payments made by Liberty to the City of
      Elizabeth in June 2000 and (iii) $.3 million in the Contract Operations
      segment to finance Liberty's concession payment made in June 2000 to the
      city of Elizabeth.

      Total interest charges increased $3.6 million or 26.0% for the nine
      months ended September 30, 2000 over the same period in 1999. The
      increase is comprised of (i) $2.3 million in the Regulated Utilities
      segment for interest expense incurred on an increased level of
      short-term bank notes used to fund Elizabethtown's, Mount Holly's and
      AWWM's capital expenditures and a higher interest rate on
      Elizabethtown's long-term variable rate debt  (ii) $.6 million in the

                                     -25-
<PAGE>
      Financing and Investment segment for interest costs to finance equity
      contributions by E'town to Liberty for concession payments made by
      Liberty to the City of Elizabeth in June 2000 (iii) $.6 million in the
      Contract Operations segment to finance Liberty's concession payments
      made in June 2000 and 1999 to the city of Elizabeth and (iv) $.1 million
      in the Engineering/Operations and Construction segment to fund
      non-utility capital expenditures.

      ECONOMIC OUTLOOK

      Forward Looking Information
      Information in this report includes certain forward looking statements
      within the meaning of the Federal securities laws regarding future
      earnings, capital expenditures and anticipated actions of regulators,
      among other things. Any forward looking statements are based upon
      information currently available and are subject to future events, risks
      and uncertainties that could cause actual results to differ materially
      from those expressed in the statements. Such events, risks and
      uncertainties include, without limitation, actions of regulators, the
      effects of weather, changes in historical patterns of water consumption
      and demand, including changes through increased use of water-conserving
      devices, conditions in capital and real estate markets, increases in
      operating expenses due to factors beyond the Corporation's control, the
      pending Merger with Thames Water, changes in environmental regulation
      and associated costs of compliance and additional investments or
      acquisitions which may be made by the Corporation.

      E'town Corporation and Subsidiaries
      Elizabethtown has secured the right to acquire the water system of the
      Borough of Manville, New Jersey for $4.9 million and the voters of
      Manville approved the acquisition in the general election on November 7,
      2000. Elizabethtown will file a petition with the BPU for approval of the
      franchise. A closing is expected to occur upon receipt of such approval.

      During the next several years, management will further seek to increase
      earnings by (i) maximizing earned returns on the Regulated Utilities
      segment through expansion efforts to increase sales, cost control
      measures and obtaining timely and adequate rate relief and (ii)
      investing in water and wastewater assets (including municipal
      privatization contracts, as well as designing, constructing, operating
      and purchasing wastewater assets through AWM and AWWM).

      Regulated Utilities Segment
      Elizabethtown, Mount Holly and AWWM
      Elizabethtown expects lower net income in 2000 because of (i) decreased
      water consumption due to the very different  weather patterns between
      2000 and 1999 and (ii) higher costs associated with operations and
      capital investments incurred since rates were last established in 1996
      which are not presently recovered in rates. Both factors will be
      partially offset by continued growth in Elizabethtown's customer base.
      Furthermore, a rate case originally planned to be filed early in 2000
      and delayed due to a condition of the the Merger Agreement, is now
      planned to be filed on approximately April 1, 2001.

      Elizabethtown expects its earned returns on common equity to increase
      from 8.0% (for the twelve months ended September 30, 2000) to levels
      comparable to authorized rates of return following the next rate
      increase.  As part of that rate case, Elizabethtown will request rate
      recognition for additional investments in utility plant since rates were
      last adjusted in 1996, as well as for  increases in expenses since that
      time. In addition, Elizabethtown will request rate recognition for
      capital expenditures and increases in operating expenses incurred
      through the completion of the rate case.

      Management expects Mount Holly to contribute to the Corporation's
      earnings per share in 2000 as a result of a Stipulation Agreement
      approved by the BPU whereby a rate increase of $1.9 million, or a net

                                     -26-
<PAGE>
      increase of $.5 million after elimination of the PWAC, was effective
      January 1, 2000.  Mount Holly plans to file a rate case on approximately
      April 1, 2001.

      AWWM expects to become profitable after it expands its customer base in
      the next several years.


      Contract Operations Segment
      Liberty
      Liberty is expected to realize a return on its capital in an amount
      similar to that currently earned by the Corporation's regulated
      operations.

      Edison
      Edison is expected to realize a return on its capital in an amount
      similar to that currently earned by the Corporation's regulated
      operations. Contributions to earnings will be small through 2002 and
      then will increase as rate increases specified in the contract take
      effect.

      E'town continues to pursue opportunities to operate municipal water and
      wastewater systems under long-term contracts, primarily in New Jersey.
      E'town will focus on opportunities where it may have an advantage due to
      location or experience in operation.

      Engineering/Operations and Construction Segment
      AWM
      AWM, acquired by E'town in June 1998, provides engineering, construction
      and operations services for stand-alone water and wastewater treatment
      facilities for industrial, commercial and residential customers, as well
      as developers of such properties.

      Despite increases in revenues for the nine months ended September 30,
      2000 versus the comparable period in 1999, higher costs to finance
      growth resulted in a loss for 2000. Such costs are due to additional
      personnel to support higher business volumes as well as startup, and
      subsequent expansion, of an office in New England. In addition, two
      construction projects anticipated for the first quarter were delayed due
      to permitting issues. These projects have now commenced. Customer demand
      remains strong with several projects in the proposal and/or contract
      negotiation stage.

      Financing and Investment Segment
      E'town and Properties
      In 1997, E'town decided to sell its unregulated real estate assets
      (Properties) and reinvest the proceeds in water and wastewater projects.
      Several properties were sold during 1997 and 1998 and one property was
      sold in January, 1999 for an after-tax gain of $2.1 million.

      At this time, the two remaining properties are under contract to be sold
      for amounts in excess of current carrying costs. The sale of these
      parcels is contingent upon various municipal approvals and closings are
      expected to occur in stages from 2001 through 2004. After-tax sale
      proceeds are expected to be used to fund investments in water and
      wastewater projects.

      New Accounting Pronouncements
      See Note 3 of the Corporation's Notes to Consolidated Financial
      Statements for a discussion of new accounting standards.

      Year 2000
      The Corporation has not experienced any operational difficulties with
      respect to the year 2000 nor has it incurred any additional costs with
      respect to this issue.
                                     -27-
<PAGE>
      PART II - OTHER INFORMATION

      Item 1 Legal Proceedings
      On September 23, 1999, two parties filed separate class action law suits
      for compensatory damages and related fees on behalf of themselves and
      similarly situated residential and commercial customers against
      Elizabethtown Water Company, Edison Water Company and Liberty Water
      Company.

      The law suits allege breach of contract, breach of tariff, negligence
      and products liability regarding the quantity and quality of water
      services provided by the Corporation during the period in September 1999
      when Elizabethtown's plant was flooded from Hurricane Floyd and was
      withdrawn from service for approximately three days.

      Upon notifying its insurance carrier of the law suit, the insurance
      carrier has taken a position that there is no coverage for breach of
      contract and has reserved its rights under the policy regarding breach
      of tariff.  The insurance carrier has neither limited nor denied
      coverage for negligence and products liability.

      Elizabethtown filed a Motion for Summary Judgment to dismiss the law
      suit as a class action proceeding prior to answering the plaintiff's
      allegations.  In March, 2000, the New Jersey Superior Court denied the
      Motion for Summary Judgment and referred the case to the New Jersey
      Board of Public Utilities (NJBPU) for purposes of investigating the
      matter and reporting its findings to the New Jersey Superior Court.  The
      New Jersey Superior Court, in view of the NJBPU's findings will then
      determine what, if any, damages were suffered by the plaintiffs and what
      liability, if any, rests with Elizabethtown.

      The Corporation maintains that the plaintiffs' allegations are without
      merit, believes that the plaintiffs' chances of prevailing are not
      probable, and that those allegations specifically not covered by
      insurance pose immaterial liability.

      Items 2 - 5:

           Nothing to Report.

      Item 6(a) - Exhibits

      Exhibits to Part I:



           Exhibit 12     -   E'town Corporation and Subsidiaries - Computation
                              of Ratio of Earnings to Fixed Charges

           Exhibit 12(a)  -   Elizabethtown Water Company - Computation of
                              Ratio of Earnings to Fixed Charges

           Exhibit 12(b)  -   Elizabethtown Water Company - Computation of
                              Ratio of Earnings to Fixed Charges and Preferred
                              Dividends

           Exhibit 27      -  E'town Corporation and Subsidiaries and
                              Elizabethtown Water Company and Subsidiary -
                              Financial Data Schedules

           Item 6(b)       -  Reports on Form 8-K

                     None

                                     -28-
<PAGE>
                              E'TOWN CORPORATION
                          ELIZABETHTOWN WATER COMPANY


                                  SIGNATURES


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


Date : November 13, 2000



                               E'TOWN CORPORATION
                               ELIZABETHTOWN WATER COMPANY




                               /s/ Gail P. Brady
                               ____________________________________
                               Gail P. Brady
                               Treasurer



                               /s/ Dennis W. Doll
                               _____________________________________
                               Dennis W. Doll
                               Controller










                                     -29-