FORM 10-Q

                     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, 1999

                                    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
     None                                                 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, 1999
 E'town Corporation (without par value)              8,637,588
 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            20

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
STATEMENTS OF CONSOLIDATED INCOME
(In Thousands Except Per Share Amounts)
                  (Unaudited)              Three Months Ended  Nine Months Ended
                                               September 30,      September 30,
                                              1999      1998     1999      1998
--------------------------------------------------------------------------------
Operating Revenues                         $45,593  $ 43,907 $122,680  $108,783
--------------------------------------------------------------------------------
Operating Expenses:
  Operation                                 17,236    16,171   48,953    39,192
  Maintenance                                1,644     1,647    5,563     4,881
  Depreciation and amortization              3,848     3,204   11,233     9,537
  Revenue taxes                              4,956     4,887   13,238    12,815
  Real estate, payroll and other tax           891       599    2,753     2,215
  Federal income taxes                       4,209     4,482    9,277     9,395
--------------------------------------------------------------------------------
        Total operating expenses            32,784    30,990   91,017    78,035
--------------------------------------------------------------------------------
Operating Income                            12,809    12,917   31,663    30,748
--------------------------------------------------------------------------------
Other Income (Expense):
  Allowance for equity funds used during
    construction                                61       239      277       518
  Federal income taxes                        (139)     (191)  (1,691)     (427)
  Gain on sale of land                                          3,197
  Other - net                                  228       306    1,093       697
--------------------------------------------------------------------------------
        Total other income                     150       354    2,876       788
--------------------------------------------------------------------------------
Total Operating and Other Income            12,959    13,271   34,539    31,536
--------------------------------------------------------------------------------
Interest Charges:
 Interest on long-term debt                  3,884     4,049   12,090    12,082
 Other interest expense - net                  901       538    1,757     1,038
 Capitalized interest                          (93)     (181)    (258)     (397)
 Amortization of debt discount and expense-net 111       107      331       324
--------------------------------------------------------------------------------
        Total interest charges               4,803     4,513   13,920    13,047
--------------------------------------------------------------------------------
Income Before Preferred Stock Dividends
   of Subsidiary                             8,156     8,758   20,619    18,489
Preferred Stock Dividends                      203       203      609       609
--------------------------------------------------------------------------------
Net Income                                 $ 7,953  $  8,555 $ 20,010  $ 17,880
================================================================================

Earnings Per Share of Common Stock (Note 6):
--------------------------------------------------------------------------------
      Basic                                $  0.92  $   1.02 $   2.34  $   2.18
      Diluted                              $  0.91  $   1.00 $   2.30  $   2.15
--------------------------------------------------------------------------------

Average Number of Shares Outstanding for
   the Calculation of Earnings Per Share:
--------------------------------------------------------------------------------
      Basic                                  8,612     8,381    8,562     8,201
      Diluted                                8,887     8,690    8,843     8,508
--------------------------------------------------------------------------------

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,
                                                 1999               December 31,
Assets                                       (Unaudited)                1998
--------------------------------------------------------------------------------


Utility Plant-At Original Cost:
  Utility plant in service                    $ 729,471                $ 717,985
  Construction work in progress                  43,688                   16,580
--------------------------------------------------------------------------------
        Total utility plant                     773,159                  734,565
   Less accumulated depreciation                134,909                  125,262
--------------------------------------------------------------------------------
        Utility plant-net                       638,250                  609,303
--------------------------------------------------------------------------------


Non-utility Property and Other
  Investments - Net (Note 7)                     84,017                   84,945
--------------------------------------------------------------------------------


Current Assets:
  Cash and cash equivalents                      10,229                    5,909
  Customer and other accounts receivable
   (less reserve: 1999, $1,258, 1998, $1,065)    34,394                   24,720
  Unbilled revenues                              14,083                   12,198
  Infrastructure loan funds receivable (Note 4)   5,657                    5,895
  Materials and supplies-at average cost          2,497                    2,538
  Prepaid insurance, taxes, other                 1,919                    2,515
--------------------------------------------------------------------------------
        Total current assets                     68,779                   53,775
--------------------------------------------------------------------------------


Deferred Charges:
  Waste residual management                       1,633                    1,371
  Unamortized debt and preferred stock expenses   9,744                   10,050
  Taxes recoverable through future rates         14,226                   14,226
  Postretirement benefit expense                  3,295                    3,490
  Other unamortized expenses                      3,414                    1,582
--------------------------------------------------------------------------------
        Total deferred charges                   32,312                   30,719
--------------------------------------------------------------------------------
            Total                             $ 823,358                $ 778,742
================================================================================

See Notes to Consolidated Financial Statements.








                                     -2-

<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)                               September 30,
                                                1999                December 31,
Capitalization and Liabilities               (Unaudited)                1998
--------------------------------------------------------------------------------

Capitalization (Notes 3 and 4):
  Common shareholders' equity                 $ 229,301                $ 215,472
  Mandatory Redeemable Cumulative
   Preferred Stock                               12,000                   12,000
  Redeemable preferred stock                        227                      227
  Long-term debt - net                          267,235                  286,908
--------------------------------------------------------------------------------
        Total capitalization                    508,763                  514,607
--------------------------------------------------------------------------------


Current Liabilities:
  Notes payable - banks                          81,079                   44,022
  Long-term debt - current portion                   30                       30
  Accounts payable and other liabilities         21,546                   19,469
  Contract obligations payable                   19,000                   12,000
  Customers' deposits                               207                      248
  Municipal and state taxes accrued              11,833                   16,789
  Federal income taxes accrued                      621
  Interest accrued                                5,978                    3,675
  Preferred stock dividends accrued                  59                       59
--------------------------------------------------------------------------------
        Total current liabilities               140,353                   96,292
--------------------------------------------------------------------------------


Deferred Credits:
  Customers' advances for construction           40,017                   41,102
  Federal income taxes                           68,891                   66,487
  State income taxes                                207                      207
  Unamortized investment tax credits              7,715                    7,839
  Accumulated postretirement benefits             3,944                    4,090
--------------------------------------------------------------------------------
        Total deferred credits                  120,774                  119,725
--------------------------------------------------------------------------------


Contributions in Aid of Construction             53,468                   48,118
--------------------------------------------------------------------------------


Commitments and Contingent Liabilities (Note 12)
--------------------------------------------------------------------------------
                Total                         $ 823,358                $ 778,742
================================================================================

See Notes to Consolidated Financial Statements.








                                     -3-

<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(In Thousands Except Share Amounts)              September 30,
                                                     1999           December 31,
                                                 (Unaudited)            1998
--------------------------------------------------------------------------------
Common Shareholders' Equity:
  E'town Corporation:
    Common stock without par value, authorized,
     15,000,000 shares, issued 1999, 8,670,142
     shares; 1998, 8,504,344 shares           $ 176,230               $ 169,324
    Paid-in capital                               1,315                   1,315
    Capital stock expense                        (5,160)                 (5,160)
    Retained earnings                            57,884                  50,961
    Less cost of treasury stock; 1999 and
     1998, 32,554 shares                           (968)                   (968)
--------------------------------------------------------------------------------
        Total common shareholders' equity       229,301                  215,472
--------------------------------------------------------------------------------
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 (Note 4):
  E'town Corporation:
    6 3/4% Convertible Subordinated
     Debentures, due 2012                         9,361                  10,499
    6.79% Senior Notes, due 2007                 12,000                  12,000
  Liberty Water Company:
    Contract Obligations Payable                                         19,000
  Applied Wastewater/Applied Water Management:
    Notes Payable                                   553                     261
  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                                  7,295                   7,295
    New Jersey Department of Environmental
     Protection Notes                             5,895                   5,895
    Other Notes Payable                             173                      30
--------------------------------------------------------------------------------
        Total long-term debt                    268,277                 287,980
    Unamortized (discount) premium-net           (1,042)                 (1,072)
--------------------------------------------------------------------------------
        Total long-term debt-net                267,235                 286,908
--------------------------------------------------------------------------------
           Total Capitalization               $ 508,763               $ 514,607
================================================================================

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
                                                 1999               December 31,
                                              (Unaudited)               1998
--------------------------------------------------------------------------------

Common Stock:
  Balance at Beginning of Period              $ 169,324               $ 153,162
  Common stock issued under Dividend
   Reinvestment and Stock Purchase Plan
   (1999, 155,873 shares; 1998, 213,568 shares)   6,462                   7,861
  Redemption of Convertible Debentures
   (1999, 27,825 shares; 1998, 18,100 shares)     1,113                     724
  Issuance of restricted stock under
   compensation programs(1999, 2,856 shares;
    1998, 9,590 shares)                             120                     332
  Restricted stock issued/(redeemed) in
   connection with acquisitions 1999, 25,756
   shares; 1998, 186,310 shares) Note 7            (920)                  6,653
  Exercise of stock options (1999, 5,000
   shares; 1998, 22,315 shares)                     131                     592
--------------------------------------------------------------------------------
  Balance at End of Period                      176,230                 169,324
--------------------------------------------------------------------------------

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

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

Retained Earnings:
  Balance at Beginning of Period                 50,961                  45,560
  Net Income                                     20,010                  22,330
  Dividends on common stock (1999, $1.53;
   1998, $2.04)                                 (13,087)                (16,929)
--------------------------------------------------------------------------------
  Balance at End of Period                       57,884                  50,961
--------------------------------------------------------------------------------

Treasury Stock:
  Balance at Beginning of Period                  (968)                    (954)
   Cost of shares redeemed to exercise stock
    options (1998, 346 shares)                                              (14)
--------------------------------------------------------------------------------
  Balance at End of Period                        (968)                    (968)
--------------------------------------------------------------------------------

     Total Common Shareholders' Equity        $ 229,301               $ 215,472
================================================================================

See Notes to Consolidated Financial Statements.






                                         -5-

<PAGE>
E'TOWN CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
               (In Thousands)                              Nine Months Ended
                  (Unaudited)                                 September 30,
                                                           1999           1998
--------------------------------------------------------------------------------

Cash Flows Provided by Operating Activities:
 Net Income                                             $ 20,010       $ 17,880
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                          11,233          9,537
   Gain on the sale of land                               (3,197)
   Increase in deferred charges                           (2,094)        (2,486)
   Deferred income taxes and investment tax
     credits-net                                           2,280          2,148
   Capitalized interest and AFUDC                           (535)          (915)
   Other operating activities-net                          3,142          1,665
 Change in current assets and current liabilities
  excluding cash, short-term investments and
  current portion of debt and net of the effects of
  the purchase of companies:
     Customer and other accounts receivable               (9,236)        (7,309)
     Unbilled revenues                                    (1,885)          (349)
     Accounts payable and other liabilities                1,917          8,343
     Accrued/prepaid interest and taxes                   (1,483)            85
     Other                                                   555           (742)
--------------------------------------------------------------------------------
     Net cash provided by operating activities            20,707         27,857
--------------------------------------------------------------------------------
Cash Flows Used by Financing Activities:
 Proceeds from issuance of common stock                    7,706          6,464
 Funds held in Trust by others                                42
 Debt and preferred stock issuance and
   amortization costs                                        318            373
 Issuance of other long-term debt                                         8,000
 Repayment of long-term debt                             (13,156)          (708)
 Contributions and advances for construction-net           1,432            343
 Net increases in notes payable - banks                   37,057         17,584
 Dividends paid on common stock                          (13,087)       (12,621)
--------------------------------------------------------------------------------
    Net cash flows provided by financing activities       20,312         19,435
--------------------------------------------------------------------------------
Cash Flows Used for Investing Activities:
 Utility plant and other capital expenditures (excluding
  allowance for funds used during construction)          (35,181)       (29,643)
Purchase of companies (Note 7)                            (1,800)
Capital expenditures on privatization contracts           (1,787)       (19,865)
 Proceeds from sale of land                                2,069          1,700
--------------------------------------------------------------------------------
    Net cash flows used for investing activities         (36,699)       (47,808)
--------------------------------------------------------------------------------
Net Decrease in Cash
  and Cash Equivalents                                     4,320           (516)
Cash and Cash Equivalents at
  Beginning of Period                                      5,909          6,233
--------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period              $ 10,229       $  5,717
================================================================================
Supplemental Disclosures of Cash
  Flow Information:
    Cash paid during the year for:
      Interest (net of amount capitalized)              $ 12,859       $ 10,505
      Income taxes                                      $  7,100        $ 5,250
      Preferred stock dividends                         $    531        $   531
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,
                                             1999      1998     1999      1998
--------------------------------------------------------------------------------
Operating Revenues                         $39,204  $ 38,821 $105,779  $102,067
--------------------------------------------------------------------------------
Operating Expenses:
  Operation                                 12,932    12,161   37,064    33,690
  Maintenance                                1,536     1,446    4,439     4,305
  Depreciation                               3,197     3,158    9,591     9,474
  Revenue taxes                              4,944     4,872   13,209    12,800
  Real estate, payroll and other taxes         755       465    2,384     2,038
  Federal income taxes                       4,068     4,493    9,336     9,798
--------------------------------------------------------------------------------
        Total operating expenses            27,432    26,595   76,023    72,105
--------------------------------------------------------------------------------
Operating Income                            11,772    12,226   29,756    29,962
--------------------------------------------------------------------------------
Other Income (Expense):
  Allowance for equity funds used during
    construction                                61       239      277       518
  Federal income taxes                        (133)     (140)    (495)     (308)
  Other - net                                  201       161      850       360
--------------------------------------------------------------------------------
        Total other income                     129       260      632       570
--------------------------------------------------------------------------------
Total Operating and Other Income            11,901    12,486   30,388    30,532
--------------------------------------------------------------------------------
Interest Charges:
  Interest on long-term debt                 3,507     3,651   10,959    10,988
  Other interest expense - net                 490       229      868       627
  Allowance for funds used during construction (75)     (181)    (240)     (397)
  Amortization of debt discount and expense-net 99        98      295       293
--------------------------------------------------------------------------------
        Total interest charges               4,021     3,797   11,882    11,511
-------------------------------------------------------------------------------
Net Income                                   7,880     8,689   18,506    19,021
Preferred Stock Dividends                      203       203      609       609
--------------------------------------------------------------------------------
Earnings Applicable To Common Stock        $ 7,677   $ 8,486 $ 17,897  $ 18,412
================================================================================

See Notes to Consolidated Financial Statements.




                                     -7-










<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands)                                September 30,
                                                 1999               December 31,
Assets                                        (Unaudited)               1998
--------------------------------------------------------------------------------

Utility Plant-At Original Cost:
  Utility plant in service                    $ 723,050                $ 714,301
  Construction work in progress                  42,239                   15,694
--------------------------------------------------------------------------------
        Total utility plant                     765,289                  729,995
  Less accumulated depreciation and amortizatio 134,410                  125,096
--------------------------------------------------------------------------------
        Utility plant-net                       630,879                  604,899
--------------------------------------------------------------------------------


Non-utility Property (Note 7)                     7,275                    7,315
--------------------------------------------------------------------------------


Current Assets:
  Cash and cash equivalents                       5,300                    3,598
  Customer and other accounts receivable
   (less reserve: 1999, $777, 1998, $670)        22,156                   16,952
  Unbilled revenues                              11,759                   10,091
  Infrastructure loan funds receivable (Note 4)   5,657                    5,895
  Materials and supplies-at average cost          2,497                    2,538
  Prepaid insurance, taxes, other                 2,922                    2,433
--------------------------------------------------------------------------------
        Total current assets                     50,291                   41,507
--------------------------------------------------------------------------------

Deferred Charges:
   Waste residual management                      1,633                    1,371
  Unamortized debt and preferred stock expenses   9,029                    9,368
  Taxes recoverable through future rates         14,226                   14,226
  Postretirement benefit expense                  3,295                    3,490
  Other unamortized expenses                      3,547                    1,152
--------------------------------------------------------------------------------
        Total deferred charges                   31,730                   29,607
--------------------------------------------------------------------------------
            Total                             $ 720,175                $ 683,328
================================================================================

See Notes to Consolidated Financial Statements.



                                         -8-




<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands)                               September 30,
                                                1999                December 31,
Capitalization and Liabilities               (Unaudited)                1998
--------------------------------------------------------------------------------


Capitalization (Note 3):
  Common shareholder's equity                 $ 219,839                $ 208,573
  Mandatory redeemable cumulative
   preferred stock                               12,000                   12,000
  Long-term debt - net                          245,321                  245,148
--------------------------------------------------------------------------------
        Total capitalization                    477,160                  465,721
--------------------------------------------------------------------------------


Current Liabilities:
  Notes payable - banks                          46,000                   22,000
  Long-term debt - current portion                   30                       30
  Accounts payable and other liabilities         11,837                   12,457
  Customers' deposits                               207                      248
  Municipal and state taxes accrued              12,077                   16,776
  Interest accrued                                5,285                    3,228
  Preferred stock dividends accrued                  59                       59
--------------------------------------------------------------------------------
        Total current liabilities                75,495                   54,798
--------------------------------------------------------------------------------


Deferred Credits:
  Customers' advances for construction           39,971                   40,874
  Federal income taxes                           67,008                   64,696
  Unamortized investment tax credits              7,705                    7,839
  Accumulated postretirement benefits             3,787                    3,947
--------------------------------------------------------------------------------
        Total deferred credits                  118,471                  117,356
--------------------------------------------------------------------------------


Contributions in Aid of Construction             49,049                   45,453
--------------------------------------------------------------------------------


Commitments and Contingent Liabilities
--------------------------------------------------------------------------------
                Total                         $ 720,175                $ 683,328
================================================================================
See Notes to Consolidated Financial Statements.



                                     -9-








<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(In Thousands)                                September 30,
                                                 1999               December 31,
                                              (Unaudited)               1998
--------------------------------------------------------------------------------

Common Shareholder's Equity (Note 3):
  Common stock without par value, authorized,
   15,000,000 shares, issued 1999 and 1998,
   1,974,902 shares                           $  15,741               $  15,741
  Paid-in capital                               139,209                 132,753
  Capital stock expense                            (485)                   (485)
  Retained earnings                              65,374                  60,564
--------------------------------------------------------------------------------
      Total common shareholder's equity         219,839                 208,573
--------------------------------------------------------------------------------

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 Department of Environmental
     Protection Notes                             5,895                   5,895
    New Jersey Environmental Infrastructure
     Trust Notes                                  7,295                   7,295
    Notes Payable (due serially through 2000)       173                      30
--------------------------------------------------------------------------------
        Total long-term debt                    246,363                 246,220
    Unamortized discount-net                     (1,042)                 (1,072)
--------------------------------------------------------------------------------
        Total long-term debt-net                245,321                 245,148
--------------------------------------------------------------------------------
           Total Capitalization               $ 477,160                $465,721
================================================================================

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
                                                1999                December 31,
                                              (Unaudited)               1998
--------------------------------------------------------------------------------


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

Paid-in Capital:
  Balance at Beginning of Period                132,753                 124,560
  Capital contributed by parent company           6,456                   8,193
--------------------------------------------------------------------------------
  Balance at End of Period                      139,209                 132,753
--------------------------------------------------------------------------------

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

Retained Earnings:
  Balance at Beginning of Period                 60,564                  53,538
  Net income                                     18,506                  24,768
  Dividends on common stock                     (13,087)                (16,929)
  Dividends on preferred stock                     (609)                   (813)
--------------------------------------------------------------------------------
  Balance at End of Period                       65,374                  60,564
--------------------------------------------------------------------------------

     Total Common Shareholder's Equity        $ 219,839               $ 208,573
================================================================================

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,
                                                          1999            1998
--------------------------------------------------------------------------------
Cash Flows from Operating Activities:
 Net income                                             $ 18,506       $ 19,021
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization                          9,591          9,474
    Increase in deferred charges                          (2,657)        (2,214)
    Deferred income taxes and investment tax
      credits-net                                          2,178          2,109
    Allowance for funds used during construction            (517)          (915)
    Other operating activities-net                            64            688
 Change in current assets and current liabilities
   excluding cash, short-term investments and
   current portion of debt and net of the effects from
   the purchase of companies:
      Customer and other accounts receivable              (4,901)          (690)
      Unbilled revenues                                   (1,668)        (2,650)
      Accounts payable and other liabilities                (683)         5,762
      Accrued/prepaid interest and taxes                  (3,148)           730
      Other                                                  106           (742)
--------------------------------------------------------------------------------
      Net cash provided by operating activities           16,871         30,573
--------------------------------------------------------------------------------

Cash Flows Used by Financing Activities:
 Capital contributed by parent company                     6,456          5,884
 Funds held in Trust by others                                42
 Debt and preferred stock issuance and
   amortization costs                                        345            339
 Repayment of long-term debt                                 (23)           (19)
 Contributions and advances for construction-net           1,614            333
 Net increase in notes payable - banks                    24,000          3,000
 Dividends paid on common stock and preferred stock      (13,618)       (13,151)
--------------------------------------------------------------------------------
     Net cash provided (used) by financing activities     18,816         (3,614)
--------------------------------------------------------------------------------

Cash Flows Used for Investing Activities:
 Utility plant expenditures (excluding allowance
  for funds used during construction)                    (33,125)       (27,625)
 Purchase of company                                        (860)
--------------------------------------------------------------------------------
    Cash used for investing activities                   (33,985)       (27,625)
--------------------------------------------------------------------------------
Net Decrease in Cash and
  Cash Equivalents                                         1,702           (666)
Cash and Cash Equivalents at
  Beginning of Period                                      3,598          4,226
--------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period              $  5,300       $  3,560
================================================================================
Supplemental Disclosures of Cash
  Flow Information:
    Cash paid during the year for:
     Interest (net of amount capitalized)               $ 10,453       $  9,177
     Income taxes                                       $  7,100       $  5,250
     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 or Corporation), 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. 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.  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 1998 Annual Report to
    Shareholders and the 1998 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.

    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
    will now be effective for all fiscal quarters of all fiscal years
    beginning after June 15, 2000. The Corporation does not believe this
    Statement will have any impact on its financial condition and results of
    operations.

3.  CAPITALIZATION
    E'town routinely makes equity contributions to Elizabethtown which
    represent a portion of the proceeds of common stock issued under E'town's
    Dividend Reinvestment and Stock Purchase Plan (DRP). E'town contributed
    $6.46 million from the DRP proceeds to Elizabethtown for the nine months
    ended September 30, 1999.

4.  LONG-TERM DEBT
    In October 1998, E'town filed a registration statement with the Securities
    and Exchange Commission (SEC) to issue up to $75 million of unsecured
    medium-term notes. E'town plans to file an amended registration statement
    with the SEC and issue approximately $30 million of these notes in the
    first quarter of 2000 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 costs for the non-regulated subsidiaries.

    In November 1998 Mount Holly closed on loan agreements that will make
    available up to $13.19 million in proceeds from the issuance of unsecured
    notes through the New Jersey Environmental Infrastructure Trust Financing
    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 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 proceeds of the loans
    are financing a portion of the construction of the Mansfield Project (see
    Note 8).

                                       -13-
<PAGE>
    E'town has outstanding $12 million of 6.79% Senior Notes due December 15,
    2007. The Note Agreement requires 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, 1999, the
    fixed charges coverage ratio was 2.74  to 1 and the debt to total
    capitalization ratio was .62 to 1, calculated in accordance with the Note
    Agreement.

5.  LINES OF CREDIT
    E'town has $115 million of uncommitted lines of credit with several banks,
    of which up to $55 million is available to E'town for use by the
    Corporation or its unregulated subsidiaries and $90 million is available
    to Elizabethtown as of September 30, 1999.  These lines, together with
    internal funds and proceeds of future issuances of debt and preferred
    stock by Elizabethtown, and sales of common stock and issuances of short-
    and long-term debt of E'town, are expected to be sufficient to finance the
    Corporation's capital needs.

 6. 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 months ended September 30, 1999 and 1998 follow:

                                   Three Months     Nine Months
                                      Ended           Ended
                                   September 30,   September 30,
                                   1999    1998    1999     1998
                                  ------  ------  ------   ------
 Thousands of Dollars Except
 Per Share Amounts
    Basic:
    Net Income                    $7,953  $8,555 $20,010  $17,880
    Average common shares
     outstanding                   8,612   8,381   8,562    8,201
                                ----------------------------------
    Basic earnings per share      $ 0.92  $ 1.02 $  2.34  $  2.18
                                ==================================
    Diluted:
    Net income                    $7,953  $8,555 $20,010  $17,880
    After tax interest expense
     applicable to 6 3/4%
     Convertible Subordinated
     Debentures                      106     124     328       70
                                ----------------------------------
    Adjusted net income           $8,059  $8,679 $20,338  $18,250
                                ==================================
    Average common shares
     outstanding                   8,612   8,381   8,562    8,201
    Additional shares from
     assumed exercise of
     stock options                    41      29      31       25
    Additional shares from
     assumed conversion of
     6 3/4% Convertible              234     280     250      282
    Subordinated Debentures
    Average common shares
     outstanding as adjusted       8,887   8,690   8,843    8,508
                                ==================================
    Diluted earnings per share    $ 0.91  $ 1.00  $ 2.30  $  2.15
                                ==================================

                                       -14-

<PAGE>
7.  NON-UTILITY PROPERTY AND OTHER INVESTMENTS
    The  detail  of  amounts   included  in  Non-Utility   Property  and  Other
    Investments at September 30, 1999 and December 31, 1998 is as follows:

                                      1999       1998
                                     ------     ------
    In Thousands of Dollars Except
    Per Share Amounts
    -----------------

    Funds held in trust by others  $  7,192   $  7,234
    Other capital assets                 83         81
    --------------------------------------------------
    Elizabethtown Water
     Company & Subsidiary             7,275      7,315
    --------------------------------------------------
    Concession fees on privatization
     contracts - net of amortization 54,335     55,505
    Capital assets from
     privatization contracts - net
     of amortization                  4,946      3,341
    Investments in real estate        9,296     11,341

    Goodwill on AWM and AWWM
    acquisitions - net
     of amortization                  4,593      5,401
    Investment in SEGS                1,214      1,214
    Other capital assets              2,171        556
    Other                               187        272
    --------------------------------------------------
       Total                       $ 84,017   $ 84,945
    ==================================================

    Effective July 1998 E'town, through Liberty, entered into a contract with
    the city of Elizabeth (Elizabeth), New Jersey to operate its water system
    under a 40-year contract serving 17,900 customers. Under the contract,
    Liberty made payments to Elizabeth of $19.7 million in 1998 and $12
    million in June 1999 and is obligated to make a payment of $19 million in
    June 2000. These amounts have been included in Concession Fees on
    Privatization contracts, net of amortization in the table above. These
    concession fees are being amortized on a straight-line basis over the life
    of the contract. Also under the terms of the contract, Liberty will
    deposit $57.8 million from revenues earned over the 40-year contract, of
    which $52.3 million is due after 2012, into a fund administered by
    Elizabeth to be used by Elizabeth to pay for capital improvements to the
    water system. In addition, Liberty is responsible for $7.45 million of
    construction expenditures, primarily for meter replacements, over the life
    of the contract. These construction expenditures, as they are incurred,
    are being amortized on a straight-line basis over the remaining life of
    the contract. Of these total commitments, approximately $4.01 million is
    expected to be expended in the next three years. E'town will receive all
    the revenues from operating the system in accordance with rate increases
    set forth in the contract. E'town is also responsible for all operating
    expenses as well as the capital expenditures discussed above. Performance
    by Liberty of the contract provisions is guaranteed by E'town.

    E'town also performs the commercial billing operations for the wastewater
    system of Elizabeth. E'town does not operate the wastewater system. E'town
    does the wastewater billing for Elizabeth and remits all cash collected to
    Elizabeth. Included in the Consolidated Balance Sheets of E'town as
    Customer and Other Accounts Receivable at September 30, 1999 are the
    receivables from the customers of Elizabeth for wastewater services in the
    amount of $3.9 million. An offsetting liability to Elizabeth is included
    in Accounts Payable and Other Liabilities which has been established to
    reflect E'town's obligation to remit these funds to Elizabeth as collected.

                                       -15-
<PAGE>
    In 1997 E'town formed a wholly-owned subsidiary, Edison Water Company
    (Edison), for the purpose of managing the assets and operations of the
    Edison Township water system under a 20-year contract. Edison serves
    approximately 11,600 residential, commercial and industrial customers.
    Edison bills and receives all water revenues generated as a result of
    operating the water system of the township of Edison, New Jersey and pays
    all the expenses under the contract. Edison expects to make expenditures
    of approximately $25 million during the 20-year life of the contract of
    which $12.29 million has been spent to date. Construction expenditures, as
    they are incurred, are being amortized on a straight-line basis over the
    remaining life of the contract. Performance by Edison of the contract
    provisions is guaranteed by E'town.

    Also included in Non-Utility Property and Other Investments at September
    30, 1999 is $9.3 million of investments in several parcels of undeveloped
    land in New Jersey. A parcel was sold in 1997 for $.4 million, resulting
    in a gain of less than $.1 million. Two other parcels were sold in 1998
    for $1.7 million resulting in a gain of less than $.1 million. Cash
    proceeds of $1.2 million were received in 1998 for these two parcels and
    the balance was financed with a one-year mortgage at an interest rate of
    8%, with full payment due by year-end 1999. In the first quarter of 1999,
    Properties sold a parcel of land in Green Brook, New Jersey, which has
    been under contract since 1995, for $5.83 million, at a gain of $3.2
    million ($2.08 million net of taxes). Cash proceeds of $1.50 million and
    $.54 million were received in February 1999 and April 1999, respectively.
    The remaining $3.79 million has been financed with a 7.75% mortgage, to be
    paid over two years. The mortgage balance, including accrued interest, of
    $3.84 million is included in Customer and Other Accounts Receivable in
    E'town's Consolidated Balance Sheets.  The gain was recognized in the
    first quarter of 1999 and is reflected in the accompanying 1999 financial
    statements. The sale proceeds will be invested into water and wastewater
    investments that produce a current return. Properties has entered into
    contracts to sell 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 several years. Based upon independent
    appraisals received at various times prior to 1997 and the expected sales
    prices for properties under contract to be sold, the estimated net
    realizable value of each property exceeds its respective carrying value as
    of September 30, 1999.

    In 1998 E'town exercised an option to purchase the operations of Applied
    Wastewater General Partnership (AWG) to provide a full complement of water
    and wastewater services and closed on the transaction in June 1998. The
    purchase price, in a non-cash transaction, was $6.6 million (185,005
    restricted common shares) for the three companies that now comprise AWM
    and $.04 million (1,305 restricted common shares) for AWWM, a regulated
    wastewater utility, in a stock-for-stock transaction accounted for as a
    purchase. The purchase price was subject to a potential downward
    post-closing adjustment based upon a multiple of earnings for the twelve
    months ended March 31, 1998. As required by the purchase contract, E'town
    had undertaken an audit of AWG for such period. This process resulted in a
    downward post-closing adjustment of $.9 million (25,756 shares) which has
    been reflected in E'town's Consolidated Balance Sheets as of September 30,
    1999. The adjusted goodwill amounts to $4.6 million as of September 30,
    1999 and is being amortized over a 40-year period.

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

    Included in  Non-Utility  Property and Other  Investments  at September 30,
    1999 is an  investment  of  $1.21  million  ($.43  million  net of  related
    deferred  taxes)  in  a  limited   partnership  that  owns  Solar  Electric
    Generating System V (SEGS),  located in California.  The Corporation owns a
    3.19%  interest in SEGS.  The  transaction  is being  accounted  for on the
    equity method.  The Corporation  will continue 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.

                                       -16-

<PAGE>
8.  REGULATORY MATTERS
    Rates
    ELIZABETHTOWN
    Elizabethtown is evaluating a potential need to file for rate relief early
    in 2000 to recover additional construction and financing costs incurred
    since base rates were last established in October 1996.

    MOUNT HOLLY
    In January 1999, Mount Holly filed a petition with the New Jersey Board of
    Public Utilities (BPU) for a $2.09 million or 40.55% rate increase, which
    reflects additional construction and financing costs, as well as increases
    in operating costs since base rates were last established in January 1996.
    This filing also included $8.96 million in costs with a corresponding rate
    increase of $1.30 million, for the portion of Mount Holly's Mansfield
    Project that was placed in service in the third quarter of 1998. On August
    9, 1999, Mount Holly filed a supplemental petition to this case for a rate
    increase to include the cost of the remaining portion of the Mansfield
    Project that will be placed into service by January 2000. This increase
    would also replace the Purchased Water Adjustment Clause (PWAC), now in
    effect, as Mount Holly will no longer be purchasing water from another
    purveyor as of the date the remaining portion of the Mansfield Project
    goes into service.  The parties to the case signed a stipulation agreement
    in October 1999 whereby a rate increase of $1.88 million, or a net
    increase of $.51 million after elimination of the PWAC, will go into
    effect on January 1, 2000.

9.  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, 1999
    and 1998 is presented as follows:

                                   -17-

<PAGE>
                                Three Months Ended  Nine Months Ended
                                   September 30,      September 30,
                                  1999      1998     1999      1998
                                 ------    ------   ------    ------
    In Thousands of Dollars
    -----------------------
    Operating Revenues:
    Regulated Utilities         $ 39,290  $ 38,852  $105,987  $102,098
    Contract Operations            5,642     5,097    14,727     8,296
    Engineering/Operations/
     Construction                  2,757     2,280     8,004     2,530
    Intersegment Elimination      (2,096)   (2,322)   (6,038)   (4,141)
                                --------------------------------------
    Consolidated Operating
      Revenues                  $ 45,593  $ 43,907  $122,680  $108,783
                                ======================================

    Operating Expenses:
    Regulated Utilities         $ 27,560  $ 26,666  $ 76,318  $ 72,176
    Contract Operations            4,566     4,416    12,603     7,313
    Engineering/Operations/
     Construction                  2,618     2,072     7,690     2,407
    Financing & Investment           136       158       444       280
    Intersegment Elimination      (2,096)   (2,322)   (6,038)   (4,141)
                                --------------------------------------
    Consolidated Operating
     Expenses                   $ 32,784  $ 30,990  $ 91,017  $ 78,035
                                ======================================

    Interest Expense:
    Regulated Utilities         $  4,034  $  3,797  $ 11,900  $ 11,511
    Contract Operations              396       351       995       546
    Engineering/Operations/
     Construction                      1        12         6        12
    Financing & Investment           372       353     1,019       978
                                --------------------------------------
    Consolidated Interest
     Expense                    $  4,803  $  4,513  $ 13,920  $ 13,047
                                ======================================

    Net Income
    Regulated Utilities         $  7,612  $  8,446  $ 17,799  $ 18,372
    Contract Operations              680       359     1,183       523
    Engineering/Operations/
     Construction                    138       167       308       112
    Financing & Investment          (477)     (417)      720    (1,127)
                                --------------------------------------
    Consolidated Net Income     $  7,953  $ 8,555   $ 20,010  $ 17,880
                                ======================================

                                  As of              As of
                               September 30,      December 31,
                                  1999                1998
                                 ------              ------
    Total Assets:
    Regulated Utilities         $728,459            $688,046
    Contract Operations           73,431              68,539
    Engineering/Operations/
     Construction                  5,189               3,744
    Financing & Investment        53,690              44,964
    Intersegment Elimination     (37,411)            (26,551)
                                --------            --------
    Consolidated Total Assets   $823,358            $778,742
                                ========            ========


                                          -18-
<PAGE>
10. STOCK OPTIONS
    In connection with the adoption of SFAS 123 "Accounting for Stock-Based
    Compensation," which was effective in 1996, the Corporation elected to
    continue to account for its Stock Option Plan (Plan) using the method
    prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
    Stock Issued to Employees," and provide proforma disclosure of the effect
    of adopting SFAS 123. The Corporation issued 50,000 stock options under
    the Plan in the second quarter of 1999. The effect of accounting for these
    options under SFAS 123 would be to reduce earnings by $.06 million or $.01
    per basic share for the nine month period ended September 30, 1999.

11. OTHER EVENTS
    In August 1999, the Governor of the State of New Jersey declared a "Water
    Emergency" for the entire state and issued mandatory restrictions on
    outdoor, nonessential water use. Due to unusually low levels of rainfall
    during June and July the Governor deemed these measures necessary to
    preserve the integrity of several of the states reservoir and well
    supplies. Customers of Elizabethtown, Mount Holly, Edison and Liberty were
    subject to these restrictions. The water systems operated by E'town's
    subsidiaries have adequate supplies of water to meet the needs of their
    customers. These restrictions affected the amount of water consumed by a
    substantial number of the Corporation's customers.  The restrictions were
    lifted in October 1999.

    In September 1999, Elizabethtown took its primary water treatment plant,
    the Raritan-Millstone Water Treatment Plant, out of service as a result of
    flooding from Tropical Storm Floyd.  For several days, Elizabethtown had
    difficulty maintaining adequate water pressure in portions of its
    distribution system as its secondary water treatment plant was supplying
    the predominant portion of the water needs of Elizabethtown's customers.
    Overall system production levels were substantially less than normal.
    Customers in portions of a few municipalities were without water service
    for a period of up to three days.  Costs incurred to repair and replace
    equipment damaged by the flood and to respond to inquiries by customers,
    regulatory bodies and the media are being either capitalized or deferred
    and are expected to be largely recoverable through insurance.  The Company
    will request the BPU to allow noninsurable costs to be recovered in
    rates.  The loss of revenues due to below normal water consumption for the
    10-day period are not recoverable through insurance and adversely effected
    basic earnings per share by approximately $.03 for the third quarter and
    nine months ended September 30,1999. (See Note 12 for legal matters related
    to Tropical Storm Floyd.)

12. LEGAL MATTERS
    On September 23, 1999, two parties filed separate class action lawsuits 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 lawsuit alleges negligence regarding the quantity and quality
    of water services during the period in September 1999 when Elizabethtown's
    main water treatment plant was flooded from Tropical Storm Floyd and was
    taken out of service.  Elizabethtown has notified its insurance carrier of
    the lawsuit and plans to file a motion for summary judgment to dismiss the
    lawsuit as a class action proceeding prior to answering the allegations.
    E'town Corporation maintains that such allegations are without merit and
    believes that the plaintiffs' chances of prevailing are not significant.



                                          -19-
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      E'town Corporation (E'town or Corporation), 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 contributed about 3% and Liberty, AWM and
      Edison each contributed 4% of the Corporation's consolidated operating
      revenues for 1998. 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/Construction segment and E'town and
      Properties comprise the Financing and Investment segment (See Note 9 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, 1999, and the results of
      operations for the three and nine month periods ended September 30, 1999
      and 1998.

      LIQUIDITY AND CAPITAL RESOURCES
      Capital Expenditures Program
      For the nine months ended September 30, 1999 capital expenditures were
      $38.8 million. Included in this total is $1.8 million for the purchase
      of a regulated water and wastewater operation by Mount Holly and AWWM in
      June, $1.8 million was for capital additions under the privatization
      contracts and $35.2 million was for other additions and improvements to
      water utility plant and wastewater facilities. For the three years
      ending December 31, 2001, capital and investment requirements for E'town
      are estimated to be $181.4 million, consisting of (i) expenditures for
      the Regulated Utilities Segment ($107.5 million for Elizabethtown, $17.0
      million for Mount Holly and $16.4 million for AWWM), (ii) investments in
      the Contract Operations segment for concession payments by Liberty and
      capital improvements for Liberty and Edison of $39.0 million, and (iii)
      investments in the Engineering/Operations/Construction segment of $1.5
      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 $50.6 million for
      routine projects (services, hydrants and main extensions not funded by
      developers) and $56.9 million for transmission system upgrades, a new
      operations center and other projects. Elizabethtown is evaluating the
      need to expand its Canal Road Water Treatment Plant to provide for
      customer growth and further enhance system reliability.  Elizabethtown
      is evaluating a potential need to file for rate relief early in 2000 to
      ensure that such costs are adequately reflected in rates (see Economic
      Outlook).

      Mount Holly
      During the next three years, Mount Holly expects to spend $17.0 million,
      of which $12.7 million is expected to be spent in 1999 for the
      construction of the Mansfield Project as described below.

      Mount Holly currently obtains all of its water from wells drilled into
      an aquifer, which has been subject to over- pumping by various users in
      a portion of southern New Jersey. The state adopted legislation
      requiring all local purveyors, including Mount Holly, to obtain
      alternate supplies and reduce their withdrawals from the affected parts
      of the aquifer. Mount Holly is constructing a Project, called the
      Mansfield Project, to obtain water from outside the affected part of the
      aquifer for delivery into the Mount Holly system. A portion of this
      project was placed into service in the third quarter of 1998 and the
      remaining portion of the project is expected to be in service by
      January 1, 2000.

                                      -20-
<PAGE>
      In January 1999, Mount Holly filed a petition with the BPU for a $2.09
      million or 40.55% rate increase, which reflects additional construction
      and financing costs, as well as increases in operating costs since base
      rates were last established in January 1996. This filing also included
      $8.96 million in costs with a corresponding rate increase of $1.30
      million, for the portion of Mount Holly's Mansfield Project that was
      placed in service in the third quarter of 1998. On August 9, 1999, Mount
      Holly filed a supplemental petition to this case for a rate increase to
      include the cost of the remaining portion of the Mansfield Project that
      will be placed into service by January 1, 2000. This increase would also
      replace the Purchased Water Adjustment Clause (PWAC), now in effect, as
      Mount Holly will no longer be purchasing water from another purveyor as
      of the date the remaining portion of the Mansfield Project goes into
      service.  The parties to the case signed a stipulation agreement in
      October 1999, whereby a rate increase of $1.9 million, or a net increase
      of $.5 million after elimination of the PWAC, is expected to go into
      effect on January 1, 2000, subject to approval by the BPU.

      AWWM
      AWWM expects to incur capital expenditures of $16.4 million in the next
      three years, the predominant portion of which is expected to be spent in
      2000. These expenditures are primarily for the purchase of wastewater
      plants from developers upon completion of their construction by AWM.

      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
      and $12.0 million in June 1999 and is contractually obligated to make a
      payment to Elizabeth of $19 million in June 2000. Also, under the terms
      of the contract, Liberty will deposit $57.8 million from revenues earned
      during the 40-year contract, of which $52.4 million is due after 2012,
      into a fund administered by Elizabeth to be used by Elizabeth to pay for
      capital improvements to the water system. In addition, Liberty is
      responsible for $7.8 million of construction expenditures, primarily for
      meter replacements, over the life of the contract. Of the total
      construction expenditures, approximately $4.0 million is expected to be
      expended in the next three years.

      EDISION
      Under the contract to operate the water system of the Township of
      Edison, New Jersey, Edison Water Company expects to spend $3.6 million
      during the next three years to upgrade the system.

      ENGINEERING/OPERATIONS/CONSTRUCTION SEGMENT
      AWM
      AWM expects to incur capital expenditures of $1.5 million during the
      next three years. These expenditures consist primarily of vehicles and
      equipment used in the construction and waste hauling operations.  On
      November 5, 1999, AWM acquired a septic services business for $.7
      million.

      Capital Resources
      During 1998 E'town financed 35.5% of its capital expenditures, including
      concession fees 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 the Corporation's
      Dividend Reinvestment and Stock Purchase Plan) and long-term debt.

                                      -21-
<PAGE>
      For the three-year period ending December 31, 2001, E'town estimates
      that 52.2% of its currently projected capital expenditures and
      concession fees for all segments are expected to be financed with
      internally generated funds (after payment of common stock dividends).
      The balance will be financed with a combination of proceeds from the
      sale of E'town common stock, medium-term notes, proceeds of tax-exempt
      New Jersey Economic Development Authority (NJEDA) bonds, and short-term
      borrowings. Mount Holly's Mansfield Project will be financed by
      requisitions from the New Jersey Environmental Infrastructure Trust
      Financing Program. The NJEDA has granted preliminary approval for the
      financing of almost all of Elizabethtown's major projects during the
      next three years. Elizabethtown expects to pursue additional tax-exempt
      financing to the extent that final allocations are granted by the NJEDA.

      In October 1998, E'town filed a registration statement with the
      Securities and Exchange Commission (SEC) to issue up to $75 million of
      unsecured medium-term notes. E'town plans to file an amended
      registration statement and issue approximately $30 million of these
      notes in the first quarter of 2000 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 costs for the non-regulated
      subsidiaries.

      In November 1998 Mount Holly closed on two loans that will provide up to
      $13.2 million in 2.60% financing for the Mansfield Project through the
      New Jersey Environmental Infrastructure Trust Financing Program. 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, funded by federal
      monies at no interest cost. The effective interest rate for the combined
      notes is approximately 2.59%.

      E'town's senior debt is currently rated A3 and A- and Elizabethtown's
      senior debt is currently rated A3 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
      three months ended September 30, 1999 would result in a $.3 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, 1999 was $8.0
      million or $.92 per basic share on a basic basis as compared to $8.6
      million or $1.02 per basic share for the same period in 1998.

      The third quarter decrease of $.10 per basic share is comprised of an
      increase of $.14 related to higher water consumption in July due to hot,
      dry weather, a decrease of approximately $.09 from mandatory
      restrictions on outdoor water usage imposed by the State of New Jersey
      in August due to drought conditions and a decrease of approximately $.02
      from reduced water consumption in September as a result of flooding of
      Elizabethtown's Raritan-Millstone Plant caused by Tropical Storm Floyd
      (Floyd). As a result of Floyd, Elizabethtown produced water
      substantially below its normal capacity for approximately a ten-day
      period. The quarter's basic earnings per share further decreased $.05 as
      a result of a net increase in operation and maintenance expenses, $.05
      due to higher interest expense and $.03 as a result of an increase in
      average shares outstanding.

      The third quarter decrease in net income of $.6 million is comprised of
      an increase of $1.2 million due to July's hot weather offset by
      decreases of $.8 million due to August's drought, $.2 million from
      reduced water consumption in September resulting from Tropical Storm
      Floyd, $.4 million due to increased operation and maintenance expenses
      and $.4 million due to higher interest expense.


                                      -22-
<PAGE>
      Net income for the nine months ended September 30, 1999 was $20.0
      million or $2.34 per basic share as compared to $17.9 million or $2.18
      per basic share for the same period in 1998.

      Net income increased by $2.1 million or $.16 per basic share for the
      nine month period due principally to an after-tax gain on the sale of a
      real estate parcel and inclusion of the nine-month 1999 earnings of
      Liberty which began operation in the second quarter of 1998.

      Operating Revenues increased $1.7 million or 3.8% for the three months
      ended September 30, 1999 compared to the same period in 1998. The
      Regulated Utilities segment accounted for $.7 million of the increase
      reflecting higher water consumption among residential customers due to
      the aforementioned dry, hot weather in July. The Contract Operations
      segment contributed $.5 million to the increase and the
      Engineering/Operations segment contributed $.5 million to the increase.
      Based upon historical revenue patterns, the impact of the aforementioned
      water restrictions and flooding resulted in an estimated loss of $.3
      million in revenues during the third quarter.

      Operating revenues increased $13.9 million or 12.8% for the nine months
      ended September 30, 1999 as compared to the comparable period in the
      prior year.  Revenues increased for the nine months by $2.0 million for
      the Regulated Utilities segment, $6.4 million for the
      Contract/Operations segment, reflecting the inclusion of Liberty
      beginning in July 1998 and $5.5 million reflecting the inclusion of the
      Engineering/Operations and Construction segment, also beginning in July
      1998.

      Operation Expenses increased $1.1 million or 6.6% for the three months
      ended September 30, 1999 compared to the same period in 1998. Operation
      Expenses of the Regulated Utilities segment increased $.8 million or
      6.9% primarily due to labor costs for additional employees as well as
      Mount Holly's cost, which is reflected in utility rates under the PWAC,
      of purchasing water from another purveyor, as discussed above. Operation
      Expense for the Engineering/Operations/Construction segment increased
      $.7 million, primarily due to increased construction activity, while the
      Contract Operations segment experienced a decrease of $.4 million in
      operating costs.

      Operation Expenses increased $9.8 million or 24.9% for the nine months
      ended September 30, 1999 as compared with the same period in the prior
      year. Operations Expenses increased $3.6 million for the Regulated
      Utilities segment for aforementioned reasons.  The Engineering/
      Operations segment showed an increase of $4.6 million and Contract
      Operations showed an increase of $1.4 million, largely reflecting the
      acquisition of AWM and Liberty, respectively in 1998. The Financing and
      Investment segment remained relatively constant, reflecting an increase
      of $.2 million.

      Maintenance Expenses remained flat for the three month period and
      increased $.7 million or 14.0% for the nine month period ended September
      30, 1999 as compared to the comparable periods in the prior year. The
      year-to-date increase occurred primarily due to inclusion of the
      operations of AWM and Liberty. Maintenance costs remained relatively
      constant for the Regulated Utilities segment primarily due to favorable
      weather conditions in the winter of 1999 as well as ongoing preventive
      maintenance programs and cost control efforts.

      Depreciation and Amortization Expense increased $.6 million or 20.1% for
      the three month period primarily due to commencement of the amortization
      of concession fees associated with the contract to operate the water
      system of the city of Elizabeth, New Jersey.

      Depreciation and Amortization expense increased $1.7 million or 17.8%
      for the nine month period due to amortization of  the concession fees
      discussed above and a higher level of depreciable plant in service.

                                      -23-
<PAGE>
      Revenue Taxes increased $.1 million or 1.4% for the three month period
      and $.4 million or 3.3% for the nine month period primarily due to water
      sales by Elizabethtown as discussed above.

      Real Estate, Payroll and Other Taxes Expenses increased $.3 million or
      48.7% for the three month period and $.5 million or 24.3% for the nine
      month period primarily due to increased payroll taxes as a result of
      higher wage levels and additional employees in the Regulated Utilities
      segment.

      Federal Income Taxes as a component of operating expenses decreased $.3
      million or 6.1% for the three month period and decreased $.1 million or
      1.3% for the nine month period due to changes in taxable operating
      income for each segment.

      Other Income (Expense) decreased $.2 million or 57.7% for the three
      month period  due primarily to a decrease in the equity component of the
      allowance for funds used during the construction of major projects.

      Other Income (Expense) increased $2.1 million or 264.9% for the nine
      month period due to a gain on the sale of real estate in the first
      quarter of 1999 of $3.2 million ($2.1 million net of taxes).

      Total Interest Charges increased $.3 million or 6.4% for the three month
      period and increased $1.1 million or 8.6% for the nine month period.
      The increase for both periods is due to the issuance of long-term notes
      by Mount Holly in November 1998 through the New Jersey Environmental
      Infrastructure Trust Financing Program to finance a portion of the
      construction of Mount Holly's Mansfield Project and an increase in
      short-term interest expense as a result of the issuance of bank notes to
      finance a scheduled concession payment of $12.0 million in June, 1999 by
      Liberty to the City of Elizabeth and to fund Elizabethtown and Mount
      Holly's ongoing capital programs.

      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,
      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
      During the next several years, management will seek to increase earnings
      per share by (i) maximizing earned returns on the Regulated Utilities
      segment through expansion efforts to increase sales and cost control
      measures 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,
      discussed below) which produce a current return. The Corporation intends
      to continue to sell Properties' real estate holdings during the next
      several years to fund a portion of the investment planned for the
      regulated and non-regulated businesses. The balance of such funding will
      be generated from internal and external sources.

                                      -24-
<PAGE>
      Earnings per share will vary going forward due to the effect of weather
      on costs and pumpage, timing and adequacy of rate relief for the
      regulated utilities, time elapsed since the last rate increase, the
      nonrecurring effect of real estate sales and other factors. For 1999
      E'town expects consolidated earnings per share to be marginally greater
      than in 1998 due to an unusually hot, dry summer in 1999 and gains on
      the sale of real estate. These increases are expected to be offset
      somewhat by an increase in the number of outstanding shares.

      Other Matters
      In August 1999, the Governor of the State of New Jersey declared a
      "Water Emergency" for the entire state and issued mandatory restrictions
      on outdoor, nonessential water use. Due to unusually low levels of
      rainfall during June and July the Governor deemed these measures
      necessary to preserve the integrity of several of the states reservoir
      and well supplies. Customers of Elizabethtown, Mount Holly, Edison and
      Liberty are subject to these restrictions. The water systems operated by
      E'town's subsidiaries have adequate supplies of water to meet the needs
      of their customers. These restrictions affected the amount of water
      consumed by a substantial number of the Corporation's customers.  The
      restrictions were lifted in October 1999.  Management believes these
      restrictions resulted in approximately a $.09 negative effect on
      basic earnings per share in the third quarter.

      In September 1999, Elizabethtown took its primary water treatment plant,
      the Raritan-Millstone Water Treatment Plant, out of service as a result
      of flooding from Tropical Storm Floyd.  For several days, Elizabethtown
      had difficulty maintaining adequate water pressure in portions of its
      distribution system as its secondary water treatment plant was supplying
      the predominant portion of the water needs of Elizabethtown's customers.
      Overall system production levels were substantially less than normal.
      Customers in portions of a few municipalities were without water service
      for a period of up to three days. Costs incurred to repair and replace
      equipment damaged by the flood and to respond to inquiries by customers,
      regulatory bodies and the media are being either capitalized or deferred
      and are expected to be largely recoverable through insurance.  The
      Company will request the BPU to allow noninsurable costs to be recovered
      in rates.  The loss of revenues due to below normal water consumption
      for the 10-day period are not recoverable through insurance and
      adversely effected earnings per basic share by approximately $.03.

      Regulated Utilities Segment
      Elizabethtown, Mount Holly and AWWM
      Elizabethtown is evaluating a potential need to file for rate relief
      early in 2000 to recover additional construction and financing costs
      incurred since base rates were last established in October 1996.

      Mount Holly earned a rate of return on common equity of 4.7% in 1998,
      compared to an authorized rate of return of 11.25%, established in its
      1996 base rate case. Mount Holly earned significantly below its
      authorized return in 1998 and 1997 as the Company was precluded from
      filing for needed rate relief due to recently settled litigation with
      another purveyor.

      Mount Holly continues to under perform in relation to its authorized
      rate of return.  Management expects Mount Holly to increase its
      contribution to E'town's earnings per share throughout 2000 as a result
      of the Stipulation Agreement signed in October 1999 whereby a rate
      increase of $1.9 million, or a net increase of $.5 million after
      elimination of the PWAC, is expected to go into effect January 1, 2000,
      subject to approval by the BPU.

      AWWM expects to realize rates of return comparable to those earned by
      Elizabethtown on its anticipated investments of $16.4 million in new
      wastewater facilities after it expands its customer base in the next
      several years.

                                       -25-
<PAGE>
      In June 1999, Mount Holly purchased Homestead Water Utility, Inc. and
      AWWM purchased  Homestead Treatment Utility, Inc. for a combined
      purchase price of $1.8 million. The entities provide water and
      wastewater services to approximately 800 customers of the Homestead
      community in southern New Jersey.

      Contract Operations Segment
      Liberty
      Effective July 1, 1998, E'town, through its Liberty Water Company
      subsidiary, commenced operation of the 17,900 customer water supply
      system of the city of Elizabeth under a 40-year contract. Liberty is
      expected to realize a return on its capital in an amount similar to that
      currently earned by E'town's regulated operations.

      Edison
      Effective July 1, 1997, E'town, through its Edison Water Company
      subsidiary, commenced operation of Edison Township's 11,600-customer
      water system under a 20-year contract. Edison is expected to realize a
      return on its capital in an amount similar to that currently earned by
      E'town'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/Construction
      AWM
      AWM provides "one-stop shopping" for water and wastewater services to
      residential and commercial developers. These services include the
      design, construction and operation of water and wastewater facilities
      and, in some instances, purchase of such utilities at project build-out
      by AWWM, thereby adding to E'town's regulated utility customer base.

      Financing and Investment Segment
      E'town and Properties
      E'town is in the process of selling its various parcels of undeveloped
      land carried as investments of $9.3 million at September 30, 1999. One
      of the real estate parcels was sold in 1997 for $.4 million, resulting
      in a gain of less than $.1 million. Two other parcels were sold in 1998
      for $1.7 million resulting in a gain of less than $.1 million. In the
      first quarter of 1999, Properties sold a parcel of land in Green Brook,
      New Jersey, which has been under contract since 1995, for $5.83 million,
      at a gain of $3.2 million ($2.08 million net of taxes). Cash proceeds of
      $1.50 million and $.54 million were received in February 1999 and April
      1999, respectively. The remaining $3.79 million has been financed with a
      7.75% mortgage, to be paid over two years. The sale proceeds will be
      invested into water and wastewater investments that produce a current
      return. Properties has entered into contracts for the sale of all of its
      remaining parcels at prices that exceed the carrying cost of such
      properties. The eventual sale of these parcels is contingent upon the
      purchaser obtaining various approvals for development and could take
      several years. E'town expects to invest the sale proceeds from the
      remaining parcels into water and wastewater utility investments that
      produce a current return. The Corporation has no plans to make
      additional investments other than in water and wastewater projects.

      New Accounting Pronouncements
      See Note 2 of E'town's Notes to Consolidated Financial Statements for a
      discussion of new accounting standards.

                                     -26-
<PAGE>
      Year 2000
      State of Readiness
      The Corporation has assessed its significant business systems, as well
      as non-critical, peripheral support systems for compliance with the Year
      2000 computer challenge. The assessment concluded that all significant
      business systems (i.e. customer billing and service, financial, water
      treatment operating and control, water quality laboratory information
      and telemetric data acquisition systems) are Year 2000 compliant. The
      assessment also included inquiries as to the state of readiness of
      significant vendors whose services to the Corporation could have an
      impact on the Corporation's ability to deliver service to its customers.
      Management concluded that the delivery of electric power as well as
      chemicals used in the water treatment process are two areas of
      significant importance and received documentation from the vendors who
      provide these services that indicates their ability to provide service.
      Therefore, the Corporation expects no disruption in the services it
      provides to its customers and expects to process transactions in its
      financial, customer billing and customer services systems. See
      Contingency Plan below for a discussion of alternative sources of power.
      The assessment had identified certain modifications to peripheral support
      systems that have since been implemented.

      The Costs To Address The Corporation's Year 2000 Issues
      The significant business systems of the Corporation defined above are
      Year 2000 compliant and have been operational for up to several years.
      Therefore, no further costs are expected to be incurred in connection
      with bringing these systems into compliance. The peripheral support
      systems required the Corporation to incur costs of approximately $.3
      million to bring them into compliance.

      Risks Associated With The Corporation's Year 2000 Issues
      Management believes that all identifiable issues with respect to Year
      2000 compliance have been addressed, or will be addressed, in sufficient
      time and in sufficient detail to preclude any disruption in service or
      adverse effect on the Corporation's financial profile. Management,
      therefore, believes that risks associated with this issue are minimal
      with respect to those areas, which are internal to the Corporation and
      over which management exercises control. Those areas that are external
      to the Corporation i.e. issues associated with our vendors, have been
      mitigated to the extent possible through inquiry of our vendors, tests
      of their claims of Year 2000 compliance and development of contingency
      plans as considered appropriate.

      Contingency Plan
      There are operational contingency plans in place on an ongoing basis to
      address issues, such as natural disasters, that could result in a
      disruption of service. These procedures would be activated in the event
      that certain physical facilities were not operable as a result of
      failures by our vendors associated with Year 2000 issues. In addition,
      Elizabethtown Water Company has alternative electric, natural gas and
      diesel generation capacity that could sustain a significant level of
      pumping capacity for an indefinite period of time.

                                    -27-
<PAGE>
     PART II - OTHER INFORMATION

      Item 1 Legal Proceedings
      On September 23, 1999, two parties filed separate class action lawsuits
      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 lawsuit alleges negligence regarding the quantity and
      quality of water services during the period in September 1999 when
      Elizabethtown's main water treatment plant was flooded from Tropical
      Storm Floyd and was taken out of service.  Elizabethtown has notified
      its insurance carrier of the lawsuit and plans to file a motion for
      summary judgment to dismiss the lawsuit as a class action proceeding
      prior to answering the allegations.  E'town Corporation maintains that
      such allegations are without merit and believes that the plaintiffs'
      chances of prevailing are not significant.

      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

      The Corporation filed a current Form 8-K on September 24, 1999 to
      disclose that Elizabethtown Water Company, its principal operating
      subsidiary, took its primary water treatment plant out of service as a
      result of flooding from Tropical Storm Floyd.

                                       -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 12, 1999

                                    E'TOWN CORPORATION
                                    ELIZABETHTOWN WATER COMPANY



                                    /s/ Gail P. Brady
                                    ________________________________
                                    Gail P. Brady
                                    Treasurer


                                    /s/ Dennis W. Doll
                                    ________________________________
                                    Dennis W. Doll
                                    Controller





                                    -29-

                                 EXHIBIT INDEX


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

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

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

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