<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-Q

[Mark one]

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended       September 30, 1999
                               -------------------------------

                                      OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

Commission file number     1-1405

                        Delmarva Power & Light Company
                        ------------------------------
            (Exact name of registrant as specified in its charter)

   Delaware and Virginia                                   51-0084283
--------------------------                            --------------------
 (States of incorporation)                             (I.R.S. Employer
                                                       Identification No.)

800 King Street, P.O. Box 231, Wilmington, Delaware            19899
-----------------------------------------------------      ------------
     (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code         302-429-3114
                                                           ------------

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 issuer's classes of
common stock, as of the latest practicable date.

All 1,000 issued and outstanding shares of Delmarva Power & Light Company common
stock, $2.25 per share par value, are owned by Conectiv.
<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------

                               Table of Contents
                               -----------------


                                                                        Page No.
                                                                        --------


Part I.   Financial Information

  Item 1.    Financial Statements

             Consolidated Statements of Income for the three and nine
             months ended September 30, 1999, and September 30, 1998.....      1

             Consolidated Balance Sheets as of September 30, 1999
             and December 31, 1998.......................................    2-3

             Consolidated Statements of Cash Flows for the nine months
             ended September 30, 1999 and September 30, 1998.............      4

             Notes to Consolidated Financial Statements..................   5-13

  Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations.........................  14-24

  Item 3.    Quantitative and Qualitative Disclosures About Market Risk..     24

Part II.  Other Information

  Item 1.    Legal Proceedings...........................................     25

  Item 5.    Other Information...........................................     25

  Item 6.    Exhibits and Reports on Form 8-K............................     26

Signature................................................................     27


                                       i
<PAGE>
                        PART I.  FINANCIAL INFORMATION

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                       CONSOLIDATED STATEMENTS OF INCOME
                            (Dollars in Thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                  Three Months Ended             Nine Months Ended
                                                    September 30,                   September 30,
                                                ---------------------------  -----------------------------
                                                    1999           1998           1999          1998
                                                -------------  ------------  ------------  ---------------
<S>                                             <C>             <C>           <C>          <C>
OPERATING REVENUES
 Electric                                          $446,356      $500,508     $1,076,588   $1,066,060
 Gas                                                156,361        93,456        578,743      282,049
 Other services                                       6,553         4,924         24,448       29,341
                                                -------------  ------------  ------------  ---------------
                                                    609,270       598,888      1,679,779    1,377,450
                                                -------------  ------------  ------------  ---------------
OPERATING EXPENSES
 Electric fuel and purchased energy                 205,155       270,202        496,609      508,340
 Gas purchased                                      151,369        87,590        542,181      248,761
 Other services' cost of sales                        4,377         3,460         19,906       20,601
 Purchased electric capacity                         14,152        10,937         35,984       29,039
 Special charges                                     10,504           728         10,504       26,788
 Operation and maintenance                           63,221        54,154        189,680      195,564
 Depreciation                                        31,449        32,556         97,116       99,266
 Taxes other than income taxes                       11,690        10,185         31,690       28,589
                                                -------------  ------------  ------------  ---------------
                                                    491,917       469,812      1,423,670    1,156,948
                                                -------------  ------------  ------------  ---------------
OPERATING INCOME                                    117,353       129,076        256,109      220,502
                                                -------------  ------------  ------------  ---------------
OTHER INCOME
 Allowance for equity funds used
   during construction                                  377           685          1,212        1,600
 Other income                                           795         1,326          3,582          527
                                                -------------  ------------  ------------  ---------------
                                                      1,172         2,011          4,794        2,127
                                                -------------  ------------  ------------  ---------------

INTEREST EXPENSE
 Interest charges                                    19,776        20,574         60,118       62,570
 Allowance for borrowed funds used during
   construction and capitalized interest               (386)         (493)        (1,138)      (1,575)
                                                -------------  ------------  ------------  ---------------
                                                     19,390        20,081         58,980       60,995
                                                -------------  ------------  ------------  ---------------

DIVIDENDS ON PREFERRED SECURITIES
 OF A SUBSIDIARY TRUST                                1,422         1,422          4,266        4,266
                                                -------------  ------------  ------------  ---------------
INCOME BEFORE INCOME TAXES AND
 EXTRAORDINARY ITEM                                  97,713       109,584        197,657      157,368

INCOME TAXES, EXCLUDING INCOME TAXES
 APPLICABLE TO EXTRAORDINARY ITEM                    38,825        42,847         78,562       62,412
                                                -------------  ------------  ------------  ---------------
INCOME BEFORE EXTRAORDINARY ITEM                     58,888        66,737        119,095       94,956

EXTRAORDINARY ITEM (Net of $147,780 of
  income taxes)                                    (253,622)           -        (253,622)          -
                                                -------------  ------------  ------------  ---------------
NET INCOME (LOSS)                                  (194,734)       66,737       (134,527)      94,956

DIVIDENDS ON PREFERRED STOCK                          1,259         1,087          3,251        3,259
                                                -------------  ------------  ------------  ---------------
EARNINGS (LOSS) APPLICABLE TO
  COMMON STOCK                                    ($195,993)      $65,650      ($137,778)     $91,697
                                                =============  ============  ============  ===============
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -1-
<PAGE>
                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                          CONSOLIDATED BALANCE SHEETS
                            (Dollars in Thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                             September 30,     December 31,
                                                 1999             1998
                                             --------------   --------------
<S>                                          <C>              <C>
                     ASSETS
                     ------

Current Assets
 Cash and cash equivalents                          $8,649           $1,761
 Accounts receivable                               304,739          275,296
 Allowance for doubtful accounts                    (6,309)          (1,765)
 Accounts receivable from associated companies        -               2,325
 Inventories, at average cost
  Fuel (coal, oil and gas)                          42,515           44,212
  Materials and supplies                            31,803           39,323
 Prepayments                                        12,800           10,735
 Deferred energy costs                              22,724             -
 Deferred income taxes, net                         18,252           13,061
                                               --------------   --------------
                                                   435,173          384,948
                                               --------------   --------------

Investments
 Funds held by trustee                              74,605           60,208
 Notes receivable                                      653             -
 Other investments                                   1,007            1,103
                                               --------------   --------------
                                                    76,265           61,311
                                               --------------   --------------

Property, Plant and Equipment
 Electric generation                             1,307,208        1,660,002
 Electric transmission and distribution          1,380,081        1,335,227
 Gas transmission and distribution                 255,990          249,383
 Other electric and gas facilities                 190,611          211,979
 Other property, plant, and equipment                5,468            5,612
                                               --------------   --------------
                                                 3,139,358        3,462,203
 Less: Accumulated depreciation                  1,409,324        1,493,955
                                               --------------   --------------
 Net plant in service                            1,730,034        1,968,248
 Construction work-in-progress                      90,106          139,217
 Leased nuclear fuel, at amortized cost             24,754           28,325
 Goodwill, net                                      70,342           71,914
                                               --------------   --------------
                                                 1,915,236        2,207,704
                                               --------------   --------------

Deferred Charges and Other Assets
 Prepaid employee benefits costs                   121,398           94,354
 Deferred recoverable income taxes                  69,033           82,211
 Recoverable stranded costs                         44,333               -
 Unamortized debt expense                           11,262           12,140
 Deferred debt refinancing costs                     8,050           16,180
 Other                                              15,164           46,003
                                               --------------   --------------
                                                   269,240          250,888
                                               --------------   --------------

Total Assets                                    $2,695,914       $2,904,851
                                               =============    =============
</TABLE>

See accompanying Notes to Consolidated Financial Statements.


                                 -2-

<PAGE>
                        DELMARVA POWER & LIGHT COMPANY
                          CONSOLIDATED BALANCE SHEETS
                            (Dollars in Thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                       September 30,     December 31,
                                                           1999             1998
                                                       --------------   --------------
<S>                                                    <C>              <C>
          CAPITALIZATION AND LIABILITIES
          ------------------------------

Current Liabilities
 Short-term debt                                          $     -         $ 21,700
 Long-term debt due within one year                           1,545         31,287
 Variable rate demand bonds                                 104,830         71,500
 Accounts payable                                           174,391        177,859
 Taxes accrued                                               39,614         16,257
 Interest accrued                                            25,914         20,604
 Dividends payable                                            7,360         23,615
 Current capital lease obligation                            12,491         12,481
 Deferred energy costs                                          -              413
 Above-market purchased energy contracts                     24,848           -
 Excess Merrill Creek Reservoir capacity and other
  electric restructuring liabilities                         20,666           -
 Other                                                       24,688         30,095
                                                         ------------   ------------
                                                            436,347        405,811
                                                         ------------   ------------
Deferred Credits and Other Liabilities
 Deferred income taxes, net                                 331,945        461,800
 Deferred investment tax credits                             35,463         37,382
 Long-term capital lease obligation                          13,362         17,003
 Above-market purchased energy contracts                     57,002           -
 Excess Merrill Creek Reservoir capacity and other
  electric restructuring liabilities                         47,375           -
 Other                                                       25,454         19,747
                                                         ------------   ------------
                                                            510,601        535,932
                                                          ------------   ------------
Capitalization
 Common stock, $2.25 par value; shares authorized:
  1,000,000 ; shares outstanding: 1,000                           2              2
 Additional paid-in capital                                 528,893        528,893
 Retained earnings                                          132,102        322,599
                                                         ------------   ------------
  Total common stockholder's equity                         660,997        851,494
 Cumulative preferred stock                                  89,703         89,703
 DPL obligated mandatorily redeemable preferred
  securities of subsidiary trust holding solely DPL
  debentures                                                 70,000         70,000
 Long-term debt                                             928,266        951,911
                                                         ------------   ------------
                                                          1,748,966      1,963,108
                                                         ------------   ------------
 Contingencies (Note 9)

Total Capitalization and Liabilities                     $2,695,914     $2,904,851
                                                         ============   ============
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -3-

<PAGE>
                        DELMARVA POWER & LIGHT COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                     Nine Months Ended
                                                                       September 30,
                                                                 --------------------------
                                                                     1999          1998
                                                                 ------------  ------------
<S>                                                               <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                                ($134,527)    $  94,956
 Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
   Extraordinary item (net of tax)                                  253,622          -
   Special charges                                                   10,504        26,788
   Depreciation and amortization                                    104,506       106,614
   Allowance for equity funds used during construction               (1,212)       (1,600)
   Deferred income taxes, net                                        25,912         2,398
   Investment tax credit adjustments, net                            (1,919)       (1,920)
   Net change in:
     Accounts receivable                                            (40,006)      (25,310)
     Inventories                                                        930        (1,336)
     Accounts payable                                                (4,996)       (4,087)
     Other current assets and liabilities (1)                        (5,822)       44,931
 Other, net                                                         (11,871)      (18,519)
                                                                 ------------  ------------
 Net cash provided by operating activities                          195,121       222,915
                                                                 ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Intercompany loan receivable                                          -          (27,936)
 Acquisition of businesses, net of cash acquired                       -           (8,970)
 Capital expenditures                                               (51,906)      (69,371)
 Net cash of nonutility subsidiaries transferred to Conectiv           -          (18,138)
 Increase in bond proceeds held in trust funds                      (10,992)         -
 Deposits to nuclear decommissioning trust funds                     (2,481)       (3,180)
 Other, net                                                            (521)          202
                                                                 ------------  ------------
 Net cash used by investing activities                              (65,900)     (127,393)
                                                                 ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Common dividends paid                                              (69,317)      (71,088)
 Preferred dividends paid                                            (2,908)       (3,382)
 Long-term debt issued                                                 -           33,000
 Variable rate demand bonds issued                                   33,330          -
 Common stock issued                                                   -               63
 Long-term debt redeemed                                            (53,517)      (26,029)
 Common stock purchased                                                -           (1,983)
 Principal portion of capital lease payments                         (7,905)       (7,164)
 Net change in short-term debt                                      (21,700)      (48,675)
 Cost of issuances and refinancings                                    (316)         (260)
                                                                 ------------  ------------
 Net cash used by financing activities                             (122,333)     (125,518)
                                                                 ------------  ------------
 Net change in cash and cash equivalents                              6,888       (29,996)
 Cash and cash equivalents at beginning of period                     1,761        35,339
                                                                 ------------  ------------
 Cash and cash equivalents at end of period                        $  8,649     $   5,343
                                                                  ===========  ============
</TABLE>


 (1) Other than debt and deferred income taxes classified as current.

 See accompanying Notes to Consolidated Financial Statements.

                                      -4-

<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  -------------------------------------------
                                  (Unaudited)


Note 1.  Financial Statement Presentation
-------  --------------------------------

The consolidated financial statements include the accounts of Delmarva Power &
Light Company (DPL) and its wholly-owned subsidiaries.  On March 1, 1998, DPL
transferred its former nonutility subsidiaries to Conectiv in conjunction with
the Merger discussed in Note 4 to DPL's 1998 Consolidated Financial Statements
included in DPL's 1998 Report on Form 10-K.  As a result of the transfer, the
Consolidated Statement of Income for the three months ended September 30, 1999,
and 1998, and the nine months ended September 30, 1999, do not include any
operating results for the former DPL nonutility subsidiaries.  The Consolidated
Statement of Income for the nine months ended September 30, 1998, includes the
former nonutility subsidiaries' operating results for the two months ended
February 28, 1998.  As of March 1, 1998, DPL's only significant remaining
wholly-owned subsidiary was Delmarva Power Financing I.

Certain reclassifications, not affecting net income, have been made to conform
amounts previously reported to the current presentation.  The financial
statements reflect all adjustments necessary in the opinion of DPL's management
for a fair presentation of interim results.  In accordance with regulations of
the Securities and Exchange Commission (SEC), disclosures which would
substantially duplicate the disclosures in DPL's 1998 Report on Form 10-K have
been omitted.  Accordingly, DPL's consolidated condensed interim financial
statements contained herein should be read in conjunction with DPL's 1998 Report
on Form 10-K and Part II of this Report on Form 10-Q for additional relevant
information.

Note 2.  Significant Accounting Policies
-------  -------------------------------

Regulation of Utility Operations

As discussed in Note 6 to the Consolidated Financial Statements, during the past
several months, the Delaware Public Service Commission (DPSC) and Maryland
Public Service Commission (MPSC) issued orders to DPL, concerning restructuring
its electricity supply businesses.  The orders were issued pursuant to the
Delaware and Maryland electric restructuring legislation enacted earlier in
1999.  Based on these orders, DPL determined that the requirements of Statement
of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of
Certain Types of Regulation," no longer applied to its electricity supply
businesses as of September 30, 1999.  As a result, DPL discontinued applying
SFAS No. 71 to its electricity supply businesses and applied the requirements of
SFAS No. 101, "Regulated Enterprises--Accounting for the Discontinuation of
Application of FASB Statement No. 71" and Emerging Issues Task Force (EITF)
Issue No. 97-4, "Deregulation of the Pricing of Electricity--Issues Related to
the Application of FASB Statements No. 71 and No. 101" (EITF 97-4).  For
information concerning the extraordinary charge to earnings in the third quarter
of 1999 which resulted from applying the requirements of SFAS No. 101 and EITF
97-4, refer to Note 4 to the Consolidated Financial Statements.

The DPSC and MPSC electric restructuring orders did not provide a rate
adjustment mechanism for any under- or over-recovery of energy costs after
customer choice begins (October 1, 1999 in Delaware and July 1, 2000 in
Maryland), except for the disposition of any deferred balance which remains when
customer choice begins.  Thus, DPL will no longer defer the difference between
the amount collected in revenues for energy costs and the amount of actual
energy costs incurred, beginning October 1, 1999 for its Delaware electricity
supply business and July 1, 2000 for its Maryland electricity supply business.
As a result, differences between DPL's energy revenues and expenses will affect
earnings and earnings volatility may increase.

                                      -5-
<PAGE>

Deferred Debt Refinancing Costs

Prior to the third quarter of 1999, the costs of refinancing debt of the utility
business were deferred and amortized over the period during which the costs are
recovered in rates, which is generally the life of the new debt.  In the third
quarter of 1999, the deferred costs associated with previously refinanced debt
attributed to DPL's electric generation businesses were written-off and charged
to earnings, net of anticipated rate recovery.  Any costs incurred in the future
for refinancing debt attributed to the electric generation business for which
rate recovery is not provided will be accounted for in accordance with SFAS No.
4, "Reporting Gains and Losses from Extinguishment of Debt," which requires such
costs to be expensed.

Energy Trading and Risk Management Activities

In June 1999, the Financial Accounting Standards Board (FASB) issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities--Deferral of
the Effective Date of FASB Statement No. 133," which delays the required
implementation date for SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," until all fiscal quarters of all fiscal years beginning
after June 15, 2000.  Reporting entities may elect to adopt SFAS No. 133 prior
to the required implementation date.  SFAS No. 133 establishes accounting and
reporting standards for derivative instruments and for hedging activities.  DPL
currently cannot determine the effect that SFAS No. 133 will have on its
financial statements.

On January 1, 1999, DPL adopted EITF consensus 98-10, "Accounting for Contracts
Involved in Energy Trading and Risk Management Activities" under which contracts
entered into in connection with energy trading activities are marked to market,
with gains and losses (unrealized and realized) included in earnings.
Implementation of EITF 98-10 did not have a material impact on net income.

Note 3.  Special Charges
-------  ---------------

DPL's operating results for the three and nine months ended September 30, 1999
include special charges of $10.5 million before taxes ($6.4 million after taxes)
primarily due to the costs of planned employee separations and certain other
nonrecurring items.

DPL's operating results for the nine months ended September 30, 1998 include
special charges of $26.8 million before taxes ($16.2 million after taxes) for
the cost of employee separations associated with the Merger-related workforce
reduction and other Merger-related costs.

Note 4.  Extraordinary Item
-------  ------------------

As discussed in Note 2 to the Consolidated Financial Statements, based on
electric utility restructuring orders received in the third quarter of 1999, DPL
discontinued applying SFAS No. 71 to its electricity supply businesses and
applied the requirements of SFAS No. 101 and EITF 97-4.  Pursuant to the
requirements of SFAS No. 101 and EITF 97-4, DPL recorded extraordinary charges
which reduced earnings by $253.6 million, after-taxes.  The portion of the
extraordinary charge related to impaired assets was determined in accordance
with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of."  As shown on the following page, the
extraordinary charge primarily resulted from impaired electric generating plants
and certain other assets, uneconomic energy contracts, and other effects of
deregulation requiring loss recognition.  The extraordinary charge was decreased
by the regulatory asset established for the amount of stranded costs expected to
be recovered through regulated electricity delivery rates.

                                      -6-
<PAGE>

<TABLE>
<CAPTION>

                                                                      Millions
Items Included in Extraordinary Charge                               of Dollars
------------------------------------------------------               -----------
<S>                                                                  <C>
(a) The net book value of nuclear electric generating
    stations and other electric plant-related assets
    including inventories were written-down due to
    impairment.                                                        $(253.3)
(b) The net present value of water-supply capacity leased
    from the Merrill Creek Reservoir in excess of the
    electric generating plants' requirements was expensed.               (41.9)
(c) The net present value of expected losses under
    uneconomic energy contracts, primarily for the purchase
    of electricity and gas at above-market prices, was
    expensed.                                                            (99.0)
(d) Generation-related regulatory assets and certain other
    utility assets impaired from deregulation were written-
    off. Also, various liabilities resulting from
    deregulation were recorded.                                          (51.5)
(e) Regulatory assets were established for the amount of
    stranded costs expected to be recovered through
    regulated electricity delivery rates.                                 44.3
                                                                       -------
Total pre-tax extraordinary charge                                     $(401.4)
Income tax benefit                                                       147.8
                                                                       -------
Total extraordinary charge, net of income taxes                        $(253.6)
                                                                       =======
</TABLE>


Note 5.  Debt
-------  ----

In May 1999, DPL repaid at maturity $30.0 million of 7.50% Medium Term Notes.
In June 1999, DPL repaid $1.2 million of 6.95% Amortizing First Mortgage Bonds.

In July 1999, the Delaware Economic Development Authority issued on behalf of
DPL $33.33 million of Variable Rate Demand Bonds (VRDB) due on demand or at
maturity in July 2024.  The proceeds from the VRDB were used to refinance $22.33
million of 7.3% long-term debt in September 1999 and $11.0 million of 7.5% long-
term debt in October 1999.  (For additional information concerning VRDB, refer
to Note 14 to the Consolidated Financial Statements included in DPL's 1998
Annual Report on Form 10-K.)

Note 6.  Rate Matters
-------  ------------

The following information updates the disclosures previously reported in Note 6,
"Rate Matters," to DPL's Consolidated 1998 Financial Statements included in
DPL's 1998 Report on Form 10-K.

Delaware Electric Utility Restructuring Legislation

On March 31, 1999, Delaware enacted the Electric Utility Restructuring Act of
1999 (the Delaware Act), which provided for a phase-in of retail customer choice
of electricity suppliers from October 1999 to October 2000, customer rate
decreases, and other matters concerning restructuring the electric utility
industry in Delaware.  On April 15, 1999, DPL submitted to the DPSC a compliance
plan for implementing the provisions of the Delaware Act in DPL's Delaware
service area.  On August 31, 1999, the DPSC issued an order on DPL's compliance
plan.  The DPSC's order is discussed below.

Implementation Dates
--------------------

The DPSC approved implementation dates for retail customer choice of electric
suppliers of October 1, 1999 for customers with a peak monthly load of 1,000
kilowatts (kW) or more; January 15, 2000 for customers with a peak monthly load
of 300 kW or more; and October 1, 2000 for other customers.

                                      -7-
<PAGE>

Rate Decrease
-------------

The DPSC approved DPL's proposed rate structure which provides for a 7.5%
decrease in DPL's Delaware residential electric rates, effective October 1,
1999, with those rates held constant from October 1, 1999 to September 30, 2003.
Also, non-residential rates are to be held constant from October 1, 1999 to
September 30, 2002.  Management estimates that the initial 7.5% residential rate
reduction effective October 1, 1999, will reduce revenues by approximately $17.5
million (on an annualized basis, assuming fiscal year 1998 sales and revenues).

Sale of Electric Generating Plants
----------------------------------

The Delaware Act permits DPL to sell, transfer, or otherwise divest its electric
generating plants without DPSC approval after October 1, 1999.  The DPSC's order
effectively provides that electric rates will remain unchanged as a result of
such divestiture.  See Note 7 to the Consolidated Financial Statements for
related information concerning the expected sales of electric generating plants.

Stranded Cost Recovery
----------------------

The rate structure approved by the DPSC also provides for DPL's recovery of
stranded costs, $16 million net of taxes, or $31 million before taxes, through a
Competitive Transition Charge billed to non-residential customers from October
1, 1999 to September 30, 2002.

Shopping Credits
----------------

The system-average customer shopping credits, which include the costs of
electricity supply, transmission, and ancillary services, are 4.736 cents per
kilowatt-hour (kWh) for the year beginning October 1, 1999, 4.738 cents per kWh
for the year beginning October 1, 2000, and 4.740 cents per kWh for the year
beginning October 1, 2001.  The shopping credits include an energy component
based on initial estimates of DPL's average energy cost per kWh for the twelve
months ended September 30, 1999, which is subject to revision.

Default Service for Electricity Supply
--------------------------------------

The Delaware Act makes DPL the provider of default service to customers who do
not choose an alternative electricity supplier for a period of 3 or 4 years
(transition period) for non-residential and residential customers, respectively.
Thereafter, the DPSC may conduct a bidding process to select the default
supplier for such customers.  During the transition period, the energy component
of customers' rates for default service will be set at DPL's average energy cost
per kWh for the twelve months ended September 30, 1999.

The DPSC order permits customers with demand below 300 kW to choose an
alternative electric supplier and to switch back to DPL's default service
without any time restrictions or price differential. Customers with demand above
300 kW who choose an alternative supplier and switch back to DPL's default
service must either, at the customer's option, return to DPL's default service
for a minimum of 12 months or pay market prices.

Code of Conduct
---------------

The DPSC ruled that the existing Code of Conduct will remain in place,
conditioned upon the requirement that a revised code be proposed and, if
necessary, litigated.  The DPSC has directed DPL to file a new Cost Accounting
Manual and Code of Conduct by November 15, 1999.

                                      -8-
<PAGE>

Maryland Electric Utility Restructuring Legislation

On April 8, 1999, Maryland enacted the Electric Customer Choice and Competition
Act of 1999 (the Maryland Act), which provided for customer choice of
electricity suppliers, customer rate decreases, and other matters concerning
restructuring the electric utility industry in Maryland.  On May 5, 1999, DPL
submitted to the MPSC a proposed settlement agreement (subsequently
supplemented) for implementing the provisions of the Maryland Act in DPL's
Maryland service area.  Prior to September 30, 1999, the MPSC's staff conveyed
to DPL that MPSC approval of the settlement agreement was imminent, and on
October 8, 1999 the MPSC issued an order to DPL which approved the settlement
agreement.  The key elements of the approved settlement agreement are discussed
below.

Implementation Date
-------------------
Effective July 1, 2000, all of DPL's Maryland-retail customers will be eligible
to select an alternative electricity supplier.

Rate Decrease
-------------

The MPSC approved a 7.5% decrease in DPL's Maryland residential electric rates,
effective July 1, 2000, with those rates held constant from July 1, 2000 to June
30, 2004.  Also, non-residential rates are to be held constant from July 1, 2000
to June 30, 2003.  Management estimates that the initial 7.5% residential rate
reduction effective July 1, 2000, will reduce revenues by approximately $12.5
million (on an annualized basis, assuming fiscal year 1998 sales and revenues).

Sale of Electric Generating Plants
----------------------------------

The Maryland Act in conjunction with the approved settlement effectively provide
that electric rates are not expected to be changed in the event DPL sells or
transfers generating assets.  See Note 7 to the Consolidated Financial
Statements for related information concerning the expected sales of electric
generating plants.

Stranded Cost Recovery
----------------------

The MPSC approved DPL's recovery of stranded costs, $8 million net of taxes, or
$14 million before taxes, through a Competitive Transition Charge billed to non-
residential customers from July 1, 2000 to June 30, 2003.

Shopping Credits
----------------

The system-average customer shopping credits, which include the costs of
electricity supply, transmission, and ancillary services, are estimated to be
approximately 5.088 cents per kWh for the year beginning July 1, 2000, 5.090
cents per kWh for the year beginning July 1, 2001, and 5.093 cents per kWh for
the year beginning July 1, 2002.  These estimated shopping credits will be reset
so that the energy component is DPL's average energy cost per kWh for the twelve
months ended April 30, 2000.

Default Service for Electricity Supply
--------------------------------------

DPL is to provide default service to customers who do not choose an alternative
electricity supplier during July 1, 2000 to July 1, 2004 for residential
customers and during July 1, 2000 to July 1, 2003 for non-residential customers.
Subsequent to these default service periods, the MPSC is to determine the
default service supplier.  During the initial periods when DPL provides default
service, the energy component of customers' rates will be set at DPL's average
energy cost per kWh for the twelve months ended April 30, 2000.

                                      -9-
<PAGE>

Code of Conduct
---------------

On July 26, 1999, the MPSC initiated a new review of the generic affiliate
transaction provisions of the Maryland Act.  Legislative type hearings are
scheduled for mid-November 1999.

Virginia Electric Utility Restructuring Legislation

The Virginia Electric Utility Restructuring Act, signed into law on March 29,
1999, phases-in retail electric competition beginning January 1, 2002.


Note 7.  Expected Sales of Electric Generating Plants
-------  --------------------------------------------

Pursuant to the financial and strategic initiatives announced by Conectiv in May
1999, Conectiv distributed offering memoranda for the proposed sale of over
2,500 megawatts (MW) of nuclear and non-strategic baseload fossil electric
generating plants owned by its subsidiaries, DPL and Atlantic City Electric
Company (ACE).  Management intends to retain certain electric generating plants
which are strategic to Conectiv's energy business, pursuant to Conectiv's "mid-
merit" strategy as discussed in the "Deregulated Generation and Power Plant
Sales" section of Management's Discussion and Analysis of Financial Condition
and Results of Operations (MD&A).  A summary of the electric generating plants
which have been offered for sale is shown in the following table.

<TABLE>
<CAPTION>
                  DPL Generating Units
                  ---------------------
                    MW of     Net Book
                  Capacity   Value (a)
                  ---------  ----------
<S>              <C>         <C>
Fossil Units:
 Wholly-owned         954.0     $279.8
 Jointly-owned        126.8       32.2
Jointly-owned
 nuclear units        331.0        8.6
                    -------     ------
                    1,411.8     $320.6
                    =======     ======
</TABLE>


 (a) The net book values shown above are as of September 30, 1999, are stated in
     millions of dollars, and reflect the write-downs discussed in Note 4 to the
     Consolidated Financial Statements.

On September 30, 1999, Conectiv announced that DPL reached agreement to sell its
ownership interests in various nuclear plants to PSEG Power LLC (a subsidiary of
Public Service Enterprise Group Incorporated) and PECO Energy Company (PECO) for
approximately $9 million, plus the net book value of DPL's interest in nuclear
fuel on-hand as of the closing date.  DPL's interest in the nuclear units which
are being sold include a 7.51 percent (164 MW) interest in the Peach Bottom
Atomic Power Station (Peach Bottom), and a 7.41 percent interest (164 MW) in the
Salem Nuclear Generating Station (Salem), including a 3 MW interest in a
combustion turbine at Salem.  Upon completion of the sale, DPL will transfer its
nuclear decommissioning trust funds to the purchasers and PSEG Power LLC and
PECO will assume full responsibility for the decommissioning of Peach Bottom and
Salem.  The sales are subject to various federal and state regulatory approvals
and are expected to close by mid-2000.

DPL is currently conducting an auction for the sale of the fossil fuel-fired
electric generating plants included in the above table.

                                      -10-
<PAGE>

The net book values of the nuclear and certain other electric generating units
offered for sale were written down in the third quarter of 1999, as discussed in
Note 4 to the Consolidated Financial Statements.  Since the impaired electric
generating units were written down to their estimated fair market values (net of
estimated selling costs), the sale of these impaired electric generating plants
should not result in a significant gain or loss.  Some of the electric
generating plants which were not impaired from deregulation may be sold at a
gain, which would be recognized when the sale occurs.  There can be no
assurances, however, that DPL will elect or be able to sell any such electric
generating plants, or that any gain will be realized from such sales of electric
generating plants.

On October 13, 1999, the DPSC initiated a formal proceeding to investigate the
adequacy of DPL's facilities and services, including the remedies and incentives
(if any) to be imposed or offered, respectively, to ensure the continued
adequacy of DPL's facilities and services.  That proceeding also will consider
the effects (if any) of electric industry restructuring in Delaware on the
reliability of electric service.  The DPSC's order requires that DPL give the
DPSC at least 30 days' notice upon entering any contract for the sale of any
generating facility on the Delmarva Peninsula to any third party.

Under the restructuring orders issued by the DPSC and MPSC, as discussed in Note
6 to the Consolidated Financial Statements, DPL's Delaware and Maryland retail
electric rates will not be changed in the event DPL sells or transfers
generating assets.  Accordingly, the Delaware and Maryland portions of any
gains, or losses, realized on the sale of DPL electric generating plants would
affect future earnings.  Management expects that a net gain will be recognized
in earnings when DPL sells its electric generating plants which were not
impaired from deregulation.

Note 8.  Regulatory Assets and Liabilities
-------  ---------------------------------

In conformity with SFAS No. 71, DPL's accounting policies reflect the financial
effects of rate regulation and decisions by regulatory commissions having
jurisdiction over DPL's regulated utility businesses.  Regulatory commissions
occasionally provide for future recovery from customers of current period
expenses.  When this happens, the expenses are deferred as regulatory assets and
subsequently recognized in the Consolidated Statement of Income during the
period the expenses are recovered from customers.  Similarly, regulatory
liabilities may also be created due to the economic impact of an action taken by
a regulatory commission.

In the third quarter of 1999, the electricity supply businesses of DPL no longer
met the requirements of SFAS No. 71.  Accordingly, regulatory assets and
liabilities related to the electricity supply businesses were written off,
except to the extent that future cost recovery was provided for through the
regulated electricity delivery business.  A new regulatory asset, "Recoverable
stranded costs," was established to recognize amounts to be collected from
regulated delivery customers for stranded costs which resulted from deregulation
of the electricity supply businesses.  The table below displays the regulatory
assets and liabilities as of September 30, 1999 and December 31, 1998.

                                      -11-
<PAGE>

<TABLE>
<CAPTION>

                                                                     September 30,  December 31,
Regulatory Assets (Liabilities)                                          1999           1998
--------------------------------------------------------------       -------------  -------------
                                                                         (Millions of Dollars)
<S>                                                                  <C>            <C>
  Recoverable stranded costs..................................         $ 44.3
  Deferred recoverable income taxes (1).......................           69.0        $ 82.2
  Deferred debt refinancing costs (2).........................            8.1          16.2
  Deferred energy costs (3)...................................           22.7          (0.4)
  Deferred costs for nuclear decommissioning/decontamination..             -            5.7
  Deferred demand-side management costs.......................            4.5           5.7
  Other (4)...................................................            2.8           9.7
                                                                       ------        ------
  Total.......................................................         $151.4        $119.1
                                                                       ======        ======
</TABLE>

(1) Deferred recoverable income taxes represents the portion of DPL's deferred
tax liabilities applicable to utility operations that has not been reflected in
current customer rates for which future recovery is probable.  Due to
discontinuing the application of SFAS No. 71 to DPL's electricity supply
business, the portion of deferred recoverable income taxes attributable to DPL's
electricity supply business was written off in the third quarter of 1999.

(2) See "Deferred debt refinancing costs" in Note 2 to the Consolidated
Financial Statements.

(3) The September 30, 1999 balance is primarily attributed to deferred energy
costs of DPL's electricity supply businesses and most of the balance is to be
recovered from Delaware and Maryland electric retail customers in accordance
with the restructuring orders issued by the DPSC and MPSC, as discussed in Note
6 to the Consolidated Financial Statements.

(4) Various regulatory assets attributable to the DPL's electricity supply
business were written off in the third quarter of 1999 due to discontinuing the
application of SFAS No. 71 to DPL's electricity supply business.

Note 9.  Contingencies
-------  -------------

Environmental Matters

DPL is subject to regulation with respect to the environmental effect of its
operations, including air and water quality control, solid and hazardous waste
disposal, and limitation on land use by various federal, regional, state, and
local authorities.  Costs may be incurred to clean up facilities found to be
contaminated due to past disposal practices. Federal and state statutes
authorize governmental agencies to compel responsible parties to clean up
certain abandoned or uncontrolled hazardous waste sites.  DPL is currently a
potentially responsible party at three federal superfund sites.  At one of these
sites, DPL has resolved its liability for clean up costs through a de minimis
settlement with the government.  At this site, DPL may be liable for a claim by
the state or federal government for natural resource damages.  DPL also is
alleged to be a third-party contributor at three other federal superfund sites.
DPL also has two former coal gasification sites in Delaware and one former coal
gasification site in Maryland, each of which is a state superfund site.  Also,
in August 1998, the Delaware Department of Natural Resources and Environmental
Control notified DPL that it is a potentially responsible party liable for
clean-up of the Wilmington Public Works Yard as a former owner of the property.
There is $2 million included in DPL's current liabilities as of December 31,
1998, and September 30, 1999, for clean-up and other potential costs related to
these sites. DPL does not expect such future costs to have a material effect on
DPL's financial position or results of operations.

                                      -12-
<PAGE>

Nuclear Insurance

In conjunction with DPL's ownership interests in Peach Bottom and Salem, DPL
could be assessed for a portion of any third-party claims associated with an
incident at any commercial nuclear power plant in the United States.  Under the
provisions of the Price Anderson Act, if third-party claims relating to such an
incident exceed $200 million (the amount of primary insurance), DPL could be
assessed up to $26.3 million on an aggregate basis for such third-party claims.
In addition, Congress could impose a revenue-raising measure on the nuclear
industry to pay such claims.

The co-owners of Peach Bottom and Salem maintain property insurance coverage of
approximately $2.8 billion for each unit for loss or damage to the units,
including coverage for decontamination expense and premature decommissioning.
In addition, DPL is a member of an industry mutual insurance company, which
provides replacement power cost coverage in the event of a major accidental
outage at a nuclear power plant.  Under these coverages, DPL is subject to
potential retrospective loss experience assessments of up to $4.0 million on an
aggregate basis.


Note 10.  Supplemental Cash Flow Information
--------  ----------------------------------

<TABLE>
<CAPTION>
                                           Nine Months Ended
                                              September 30,
                                         ---------------------
                                            1999       1998
                                         ----------  ---------
<S>                                     <C>          <C>
Cash paid for
(Dollars in thousands)
 Interest, net of amounts capitalized      $53,283    $62,086
  Income taxes, net of refunds             $37,786    $19,132
</TABLE>

Note 11.  Business Segments
--------  -----------------

Conectiv's organizational structure and management reporting information is
aligned with Conectiv's business segments, irrespective of the subsidiary, or
subsidiaries, through which a business is conducted.  Businesses are managed
based on lines of business, not legal entity.  Business segment information is
not produced, or reported, on a subsidiary by subsidiary basis.  Thus, as a
Conectiv subsidiary, no business segment information (as defined by SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information") is
available for DPL on a stand-alone basis.


                                      -13-
<PAGE>

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

Earnings Summary
----------------

In the third quarter of 1999, DPL reported a net loss applicable to common stock
of $196.0 million. The net loss resulted from (i) a $253.6 million extraordinary
charge applicable to common stock for discontinuing the application of SFAS No.
71 to DPL's electricity supply businesses because of deregulation, and (ii) $6.4
million of special charges, net of taxes, primarily for accrued employee
separation costs and certain other nonrecurring items.  For additional
information concerning deregulation and the extraordinary charge to earnings,
see Notes 2, 4, 6 and 8 to the Consolidated Financial Statements and the
"Electric Utility Industry Restructuring" section within the MD&A.

Excluding the extraordinary and special charges to earnings, earnings applicable
to common stock were $64.0 million for the third quarter of 1999 compared to
earnings applicable to common stock of $66.0 million for the third quarter of
1998.  This $2.0 million decrease in earnings applicable to common stock
(excluding extraordinary and special charges) was primarily due to higher
operation and maintenance expenses which were largely offset by higher regulated
electric revenues, partly due to warmer summer weather.

For the nine months ended September 30, 1999, DPL reported a net loss applicable
to common stock of $137.8 million.  The net loss resulted from (i) a $253.6
million extraordinary charge applicable to common stock for discontinuing the
application of SFAS No. 71 to its electricity supply businesses because of
deregulation, and (ii) $6.4 million of special charges, net of taxes, primarily
for accrued employee separation costs and certain other nonrecurring items.  For
the nine months ended September 30, 1998, earnings applicable to common stock
were $91.7 million, after special charges of $16.2 million, net of taxes, for
the cost of employee separations associated with the Merger-related workforce
reduction and other Merger-related costs.

Excluding the extraordinary and special charges to earnings, earnings applicable
to common stock were $122.2 million for the nine months ended September 30, 1999
compared to earnings applicable to common stock of $107.9 million for the same
period last year.  The $14.3 million increase in earnings applicable to common
stock for the nine month period was primarily due to higher regulated electric
and gas revenues and a $3.5 million operating loss incurred in the first two
months of 1998 by the nonutility subsidiaries which were transferred to Conectiv
on March 1, 1998.

Electric Utility Industry Restructuring
---------------------------------------

As discussed in Notes 2, 4, 6, and 8 to the Consolidated Financial Statements,
during the past several months, the DPSC and MPSC issued orders to DPL,
concerning restructuring its electricity supply businesses.  Based on these
orders, DPL determined that the requirements of SFAS No. 71 no longer applied to
its electricity supply businesses as of September 30, 1999.  As a result DPL
discontinued applying SFAS No. 71 and applied the requirements of SFAS No. 101
and EITF 97-4, which among other things, resulted in an extraordinary charge to
earnings of $253.6 million, net of taxes.

                                      -14-
<PAGE>

Implementation Dates

The table below shows when DPL's Delaware and Maryland retail electric customers
may choose an alternative supplier.  The Virginia Electric Utility Restructuring
Act, signed into law on March 29, 1999, phases in retail electric competition
beginning January 1, 2002.

<TABLE>
<CAPTION>
State                      Customer Group                  Effective Date for Choice
----------  ---------------------------------------------  -------------------------
<S>         <C>                                            <C>
Delaware    Customers with peak loads of 1,000 kW or more  October 1, 1999
Delaware    Customers with peak loads of 300 kW or more    January 15, 2000
Delaware    All other Delaware retail electric customers   October 1, 2000
Maryland    All customers                                  July 1, 2000
</TABLE>

Revenue Reductions

Pursuant to the electric utility restructuring orders issued by the DPSC and
MPSC during the past several months, electric rate decreases became effective,
or are scheduled to become effective, as shown in the table below.

<TABLE>
<CAPTION>

            Estimated Annualized
  State     Revenue Decrease (1)   Effective Date
----------  --------------------   ---------------
<S>        <C>                     <C>
Delaware    $17.5 million (2)      October 1, 1999
Maryland    $12.5 million (2)      July 1, 2000
</TABLE>

(1)  Estimated based on 1998 fiscal year sales and revenues.
(2)  Represents a 7.5% reduction for residential rates, which are held constant
     for four years. Non-residential rates are held constant for three years.

Regulatory Implications on Sales of Electric Generating Plants

Under the DPSC's and MPSC's electric restructuring orders, any gain, or loss,
realized on the sale of DPL's electric generating plants will affect net income
to the extent the net selling proceeds differ from the plants' net book value,
as adjusted for any impairment write-down recorded in the third quarter of 1999.
Management expects that a net gain will be recognized in earnings when DPL sells
its electric generating plants which were not impaired from deregulation.  There
can be no assurances, however, that DPL will elect or be able to sell any such
electric generating plants, or that any gain will be realized from such sales of
electric generating plants.

Stranded Cost Recovery

Based on the $24 million of after-tax stranded cost recovery that the DPSC and
MPSC restructuring orders provided for, DPL recorded recoverable stranded costs
on a pre-tax basis of $44.3 million in the third quarter of 1999.  Although only
partial stranded cost recovery was provided for by the DPSC's and MPSC's
restructuring orders, any gain that may be realized on the sale of DPL's
electric generating units which were not impaired by deregulation will increase
future earnings.

Default Service

DPL is obligated to supply electricity to customers who do not choose an
alternative electricity supplier for three or fours years (depending on customer
class) after October 1, 1999 in Delaware and July 1, 2000 in Maryland.  The
energy component to be included in customers' rates for such "default service"
is established based on the average energy cost for the 12 months ended
September 30, 1999 for Delaware customers and the average energy cost for the 12
months ended April 30, 2000 for Maryland customers.  After October 1, 1999 in
Delaware and July 1, 2000 in Maryland, DPL's earnings will be affected to the
extent that actual energy costs vary from the amounts included in customer
rates.

                                      -15-
<PAGE>

Shopping Credits

Customers who choose an alternative electricity supplier receive a credit to
their bill, or a shopping credit, which generally represents the cost of
electricity supply and transmission service.  System-average shopping credits
for the first three to four years (depending on the state and/or customer group)
after customer choice begins, have been initially estimated to range from 4.736
to 4.740 cents per kWh for DPL's Delaware customers, and from 5.088 to 5.093
cents per kWh for DPL's Maryland customers.

Deregulated Generation and Power Plant Sales
--------------------------------------------

Conectiv's management is changing the mix of the types of electric generating
plants owned by its subsidiaries, including DPL, in conjunction with
implementing a "mid-merit" strategy.  Mid-merit electric generating plants can
quickly increase or decrease their kWh output level on an economic basis.  Mid-
merit plants typically have relatively low fixed operating and maintenance costs
and also can use different types of fuel.  These plants are generally operated
during times when demand for electricity rises and prices are higher.  As
discussed in Note 7 to the Consolidated Financial Statements, DPL has offered
its nuclear and non-strategic baseload fossil electric generating plants for
sale.  Baseload electric generating plants run almost continuously to supply the
base level of demand for electricity, or the minimum demand level which
generally always exists on an electrical system.  In a deregulated electricity
supply market, management expects that mid-merit electric generating plants will
be more profitable and provide higher returns on invested capital than baseload
electric generating plants.

Effective October 1, 1999, the Delaware portion (approximately 59%) of DPL's
electric generating plants is deregulated and the plants' kWh output may, at
DPL's option, be sold in deregulated markets or used to supply default service
customers in Delaware.  Similarly, effective July 1, 2000, the Maryland portion
(approximately 30%) of DPL's electric generating plants is deregulated and the
plants' kWh output may, at DPL's option, be sold in deregulated markets or used
to supply default service customers in Maryland.

On September 30, 1999, Conectiv announced that DPL reached agreements to sell
its ownership interests in nuclear plants, representing 331 MW of capacity, to
PSEG Power LLC and PECO.  The aggregate sales price of $9 million, less selling
costs, was used as the fair value of the nuclear plants in determining the
amount of impairment that resulted from deregulation and the amount of the write
down of DPL's  investments in nuclear plants that was recorded in the third
quarter of 1999.  Upon completion of the sale, DPL will transfer its nuclear
decommissioning trust funds to the purchasers and PSEG Power LLC and PECO will
assume full responsibility for the decommissioning of Peach Bottom and Salem.
The sales are subject to various federal and state regulatory approvals and are
expected to close by mid-2000.

DPL is currently conducting an auction for the sale of certain fossil fuel-fired
electric generating plants which have 1,081 MW of capacity and a net book value
of approximately $312 million, which is net of the write downs recorded in the
third quarter of 1999, as a result of deregulation.

See the preceding MD&A section labeled "Regulatory Implications on Sales of
Electric Generating Plants" for a discussion of any gain or loss that may result
from such sales.

In order to fulfill its obligations in Delaware and Maryland as a default
service provider, DPL may arrange contracts to purchase energy and capacity from
the buyer(s) of the fossil fuel-fired plants.  These contracts are expected to
establish a favorable cost structure for DPL's default service.  Alternatively,
DPL may purchase energy and capacity from third parties.

                                      -16-
<PAGE>

Due to the expected sale of power plants, more electric capacity is expected to
be purchased in the future, which will cause purchased electric capacity costs
to increase.  However, since the divested plants will be removed from the
balance sheet upon sale, depreciation expense for these plants will stop.  Also,
to the extent the sales proceeds are used to pay off debt which had financed the
plants, interest expense will also decrease.

Management expects the proceeds from the sale of the electric generating plants
will be used for general corporate purposes, including the purchase of a portion
of DPL's outstanding securities.  The electric generating plants of DPL which
are not sold to third parties are expected to be transferred into a new electric
generation subsidiary within the next year.

DPL's mortgage indentures require that the electric generating plants being
divested be released from the liens of the mortgage.  These assets may be
released with a combination of cash, bondable property additions and credits
representing previously issued and retired first mortgage bonds.  DPL has
sufficient bondable property additions and retired first mortgage bonds to
release such assets at fair values.


Electric Revenues
-----------------

The table below shows the amounts of electric revenues earned which are subject
to price regulation (Regulated) and which are not subject to price regulation
(Non-regulated).
<TABLE>
<CAPTION>

                                   Three Months Ended  Nine Months Ended
                                      September 30        September 30
                                   ------------------  ------------------
                                     1999      1998      1999      1998
                                   --------  --------  --------  --------
                                           (Dollars in millions)

<S>                             <C>          <C>    <C>         <C>
Regulated electric revenues          $347.9    $334.7  $  853.0  $  826.9
Non-regulated electric revenues        98.5     165.8     223.6     239.2
                                     ------    ------  --------  --------
Total electric revenues              $446.4    $500.5  $1,076.6  $1,066.1
                                     ======    ======  ========  ========
</TABLE>
Regulated electric revenues increased by $13.2 million, from $334.7 million in
the third quarter of 1998 to $347.9 million in the third quarter of 1999.  The
$13.2 million increase was primarily due to higher demand charges billed to
resale customers as a result of the hot weather and higher retail kWh sales.

Non-regulated electric revenues decreased by $67.3 million, from $165.8 million
in the third quarter of 1998 to $98.5 million in the third quarter of 1999.  The
$67.3 million decrease was mainly due to lower electricity trading volumes,
partly offset by higher competitive retail electricity sales in Pennsylvania.
The decrease in Non-regulated electricity trading revenues did not have a
significant impact on the variance in Non-regulated electric revenues net of
energy costs because gross margins from electricity trading are generally low.

For the nine month period, Regulated electric revenues increased by $26.1
million, from $826.9 million for the nine months ended September 30, 1998 to
$853.0 million for the nine months ended September 30, 1999.  The $26.1 million
increase was primarily due to a $22.1 million increase in interchange revenues
primarily from revenues for transmission network usage and system congestion.
The remaining $4.0 million of the increase reflects higher demand charges billed
to resale customers and a 2.9% increase in retail kWh sold (mainly due to a 1.7%
increase in the number of customers), partly offset by lower resale kWh sales
due to a scheduled load reduction by DPL's largest resale customer.

                                      -17-
<PAGE>

Non-regulated electric revenues decreased $15.6 million for the nine month
period, from $239.2 million for the nine months ended September 30, 1998 to
$223.6 million for the nine months ended September 30, 1999.  The $15.6 million
decrease was mainly due to lower electricity trading volumes, partly offset by
higher competitive retail electricity sales in Pennsylvania.  Despite lower
electricity trading volumes and revenues, Non-regulated electric revenues net of
energy costs increased for the nine-month period.

Gas Revenues
------------

The table below shows the amounts of gas revenues earned which are subject to
price regulation (Regulated) and which are not subject to price regulation (Non-
regulated).
<TABLE>
<CAPTION>
                              Three Months Ended  Nine Months Ended
                                September 30,       September 30,
                              ------------------  -----------------
                                1999      1998      1999     1998
                              ---------  -------  --------  -------
                                      (Dollars in millions)
<S>                           <C>       <C>      <C>        <C>
Regulated gas revenues           $ 12.0    $13.0    $ 87.5   $ 79.0
Non-regulated gas revenues        144.4     80.5     491.2    203.0
                                 ------    -----    ------   ------
Total gas revenues               $156.4    $93.5    $578.7   $282.0
                                 ======    =====    ======   ======
</TABLE>
Regulated gas revenues increased $8.5 million for the nine-month period ended
September 30, 1999, due primarily to a 12.8% increase in cubic feet of natural
gas sold to residential customers because colder winter weather caused
residential customers to use more gas to heat their homes.  Higher average rates
charged under the energy adjustment clause also contributed to the increase.

Due to higher Non-regulated gas trading volumes, Non-regulated gas revenues
increased $63.9 million for the three-month period and $288.2 million for the
nine-month period.  However, the variance, for the three-month period and for
the nine-month period compared to the same periods last year, in Non-regulated
gas revenues net of related purchased gas costs was not significant.  The margin
earned from Non-regulated natural gas trading revenues in excess of related
purchased gas costs is relatively small mainly due to the competitive nature of
natural gas trading activities.

Other Services Revenues
-----------------------

Total revenues from "Other services" decreased from $29.3 million to $24.4
million for the nine-month period.  The $4.9 million revenue decrease reflects a
$19.5 million decrease attributed to the transfer of DPL's nonutility
subsidiaries to Conectiv on March 1, 1998, partially offset by revenue received
for administrative facilities used by Conectiv's service company pursuant to
regulations of the 1935 Public Utility Holding Company Act.  Total revenues from
"Other services" increased from $4.9 million to $6.6 million for the three-month
period, primarily due to revenues received for administrative facilities used by
Conectiv's service company.

Operating Expenses
------------------

Electric Fuel and Purchased Energy Expenses

Electric fuel and purchased energy expenses decreased $65.0 million and $11.7
million for the three-month and nine-month periods, respectively, mainly due to
lower Non-regulated electricity trading volumes, partially offset by higher
regulated electricity sales.

                                      -18-
<PAGE>

Gas Purchased

Gas purchased increased by $63.8 million to $151.4 million for the third quarter
of 1999, and by $293.4 million to $542.2 million for the first nine months of
1999 mainly due to larger volumes of gas purchased for resale off-system.
Higher on-system sales demand due to the colder winter weather also contributed
to the increase for the nine-month period.

Other Services' Cost of Sales

Other services' cost of sales increased by $0.9 million for the three-month
period mainly due to expenses associated with the administrative facilities
being used by Conectiv's service company.  Other services' cost of sales
decreased by $0.7 million for the nine-month period primarily due to the
transfer of DPL's nonutility subsidiaries to Conectiv on March 1, 1998,
partially offset by the expenses associated with the administrative facilities
being used by Conectiv's service company.

Purchased Electric Capacity

Purchased electric capacity costs increased $3.2 million and $6.9 million for
the three- and nine-month periods, respectively, due to higher capacity
requirements associated with energy supplied within and outside of DPL's
regulated service territories.

Special Charges

DPL's operating results for the three and nine months ended September 30, 1999
include special charges of $10.5 million before taxes ($6.4 million after taxes)
primarily due to the costs of planned employee separations and certain other
nonrecurring items.

DPL's operating results for the nine months ended September 30, 1998 include
special charges of $26.8 million before taxes ($16.2 million after taxes) for
the cost of employee separations associated with the Merger-related workforce
reduction and other Merger-related costs.

Operation and Maintenance Expenses

For the third quarter of 1999, operation and maintenance expenses increased by
$9.1 million primarily due to higher power plant maintenance expenses, and lower
capital expenditures which caused proportionately more resources to be expensed
and less resources to be capitalized.  Operation and maintenance expenses
decreased to $189.7 million for the first nine months of 1999 from $195.6
million for the first nine months of 1998.  Excluding a $10.6 million decrease
due to the transfer of the nonutility subsidiaries to Conectiv on March 1, 1998,
operation and maintenance expenses increased $4.7 million primarily due to the
same factors which contributed to the third quarter increase.

Year 2000
----------

The Year 2000 issue is the result of computer programs and embedded systems
using a two-digit format, as opposed to four digits, to indicate the year.
Computer and embedded systems with this characteristic may be unable to
interpret dates during and beyond the year 1999, which could cause a system
failure or other computer errors, leading to disruption of operations.  A
project team, originally started in 1996 by ACE, is managing Conectiv's response
to this situation.  A Conectiv corporate officer, reporting directly to the
Chief Executive Officer, is coordinating all Year 2000 activities. Conectiv has
met substantial challenges in identifying and correcting the computer and
embedded systems critical to generating and delivering power, delivering natural
gas and providing other services to customers.

                                      -19-
<PAGE>

The project team is using a phased approach to managing its activities.  The
first phase was inventory and assessment of all systems, equipment, and
processes.  Each identified item was given a criticality rating of high, medium
or low.  Those items rated as high or medium were then subject to the second
phase of the project.  The second phase--determining and implementing
corrective action for the identified systems, equipment and processes--
concludes with a test of the unit being remediated.  The third phase involves
system testing and compliance certification.

Overall, Conectiv's Year 2000 Project covers approximately 140 different systems
(some with numerous components) that had been originally identified as high or
medium in criticality.  However, only 21 of those 140 systems are essential for
continued operations and customer response across Conectiv's several businesses;
these are regarded as "mission critical."  The Year 2000 Project team has
focused on these 21 systems, with work on the other systems continuing based on
their relative importance to Conectiv's businesses.

Additionally, DPL has developed and tested contingency plans in the event that
Year 2000 outages do occur. Contingency plans are in place for all mission
critical systems and have been coordinated into a detailed overall Year 2000
restoration plan under the direction of a senior-level engineering and
operations manager. Contingency plans have also been developed for non-mission
critical systems. The Year 2000 plans build on DPL's existing expertise in
service restorations. DPL has also coordinated these efforts with state and
local emergency management agencies.

The following chart sets forth the current estimated completion percentage of
the 140 different systems in the Year 2000 Project by major business group, and
for the information technology systems used in managing Conectiv's businesses.

Inventory and assessment, corrective action/unit testing and system
testing/compliance in the 21 mission critical systems is 99% complete.

<TABLE>
<CAPTION>
                              Inventory and   Corrective Action/ System Testing/
Business Group                  Assessment      Unit Testing       Compliance
--------------------------   ---------------  ------------------ ---------------
<S>                         <C>                  <C>               <C>
Business systems                    100%               98%             95%
Power production                    100%               95%             95%
Electricity distribution            100%               93%             90%
Gas delivery                        100%               99%             99%
Competitive services                100%          75%-100%             88%
</TABLE>

Conectiv has also contacted vendors and service providers to review their Year
2000 efforts.  Many aspects of Conectiv's businesses are dependent on third
parties.  For example, fuel suppliers must be able to provide coal or gas for
DPL to generate electricity.

Distribution of electricity is dependent on the overall reliability of the
electric grid.  DPL has been cooperating with the North American Electric
Reliability Council (NERC) and the PJM Interconnection in Year 2000 remediation,
contingency planning and restoration planning efforts.  Recent reports issued by
NERC indicate a small risk of disruption to the electric grid caused by Year
2000 issues.  Conectiv's Year 2000 Project timeline and status are in line with
the recommendations of those groups, with limited exceptions.

                                      -20-
<PAGE>

As requested by NERC, DPL filed its Year 2000 Readiness Statement with NERC
stating that as of June 30, 1999, 96% of work on mission critical systems had
been completed.  The remaining 4% of work constituted three exceptions to full
readiness status and were reported to NERC in the regular monthly filing made on
June 30, 1999.  On the basis of Conectiv's filings, NERC has designated Conectiv
(including DPL) as "Ready with Limited Exceptions."  NERC regards exceptions as
"limited" only if they "do not pose a measurable risk to reliable electric
operations into the Year 2000."  NERC, in its report to the Department of Energy
dated August 3, 1999, stated that the factors it considers in making this
evaluation include the number of facilities in a reporting company, the percent
of that company's capacity included in the exception, expected completion date,
importance of the facilities included in the exception and steps taken to
mitigate risks.  In that report, NERC stated that based "on data received
through June 30, 1999, NERC believes that the electric power industry will
operate reliably into the Year 2000 with the resources that are Y2k Ready
today."

Since DPL's June 30, 1999 NERC filing, Conectiv has addressed two of the three
exceptions and they have been reported as complete to NERC. Mission critical
work is now 99% complete. The outstanding work on the sole remaining exception
is completion of changes to Conectiv's customer information and billing system,
including system changes made necessary by state legislation authorizing energy
choice programs. Remediation efforts are now complete; the remaining work
consists of final integration testing of the system. That testing is scheduled
to be complete by the end of November 1999.

DPL participated in the two NERC drills on April 9, 1999 and September 9, 1999;
a small number of manageable issues similar to those found by other utilities
were identified during those drills and have been addressed.  In addition, DPL
conducted its own drill on October 28, 1999 where it successfully tested its
contingency plans and communications with customers and emergency management
agencies.  All of these drills were exercises only and did not result in service
interruptions.

Conectiv has incurred approximately $12.4 million in costs for the Year 2000
Project.  The current budget for the Year 2000 Project is $10 million to $15
million.  The costs set forth above do not include significant expenditures
covering new systems, such as Conectiv's SAP business, financial and human
resources management systems, an energy control system, and a customer
information system.  While these new systems effectively remediated Year 2000
problems in the systems they replaced, Conectiv is not reporting the
expenditures on these systems in its costs for the Year 2000 Project, because
the new systems were installed principally for other reasons.  The total cost of
these other projects over several years exceeds $87 million.

During July 1999, President Clinton signed the Year 2000 litigation reform bill,
known as the "Y2K Act."  The Y2K Act provides some new partial liability and
damages protections to defendants in Year 2000 failure-related cases.  It also
establishes new litigation procedures that plaintiffs and defendants must
follow.  In general, the Y2K Act provides a pre-litigation notice period,
proportionate liability among defendants in Year 2000 cases, a requirement that
plaintiffs mitigate damages from Year 2000-related failures, and federal court
jurisdiction for Year 2000 claims.  The law covers many types of civil actions
that allege harm or injury related to an actual or potential Year 2000-related
failure, or a claim or defense arising or related to such a failure.  The Y2K
Act does not, however, cover civil actions for personal injury or wrongful death
or most actions brought by a government entity acting in a regulatory,
supervisory or enforcement capacity.  The law governs actions brought after
January 1, 1999 for a Year 2000-related failure occurring before January 1,
2003.  Although the Y2K Act will not afford DPL complete protection from Year
2000-related claims, it should help limit any liability related to any Year
2000-related failures.  DPL cannot predict the extent to which such liability
will be limited by the Y2K Act.

                                      -21-
<PAGE>

Until the century change actually occurs, DPL will not with certainty be able to
determine whether the Year 2000 issue might cause disruptions to its operations
and impact related costs and revenues.  DPL continues to assess the status of
the Year 2000 Project on at least a semi-monthly basis to determine the
likelihood of disruption.  Based on its own Year 2000 program, as well as
reports from NERC and other utilities, management believes it is unlikely that
significant Year 2000-related disruptions will occur.  However, any substantial
disruption to DPL's operations could negatively impact DPL's revenues,
significantly impact its customers and generate legal claims against DPL.  DPL's
results of operations and financial position would likely suffer an adverse
impact if other entities, such as suppliers, customers and service providers do
not effectively address their Year 2000 issues.

Liquidity and Capital Resources
-------------------------------

Due to $195.1 million of cash provided by operating activities, $65.9 million of
cash used by investing activities, and $122.3 million of cash used by financing
activities, cash and cash equivalents increased by $6.9 million during the first
nine months of 1999.

The $195.1 million of net cash provided by operating activities for the nine
months ended September 30, 1999 represented a $27.8 million decrease compared to
the $222.9 million of net cash provided by operating activities for the nine
months ended September 30, 1998.  The $27.8 million decrease was primarily due
to under-collections of energy costs from customers in the current nine-month
period, over-collections of energy costs from customers in last year's nine-
month period, and higher income tax payments, which were partially offset by
higher electric and gas revenues, net of related energy costs, and the absence
of last year's employee separation payments.

Accounts receivable increased from $275.3 million as of December 31, 1998 to
$304.7 million as of September 30, 1999 mainly due to seasonality of electricity
sales, which resulted in higher electric revenues in the third quarter of 1999
than in the fourth quarter of 1998.

The $22.7 million current asset for deferred energy costs as of September 30,
1999 is mainly for DPL's electric business, and will be recovered from DPL
ratepayers within a year after customer choice of electricity suppliers begins
in Delaware and Maryland.

The current liability for taxes accrued increased $23.4 million from December
31, 1998 to September 30, 1999 primarily due to taxable income for the first
nine months of 1999; the items included in the special and extraordinary charges
to earnings for the first nine months of 1999 generally are not currently
deductible for income tax purposes, but instead result in a deferred tax
benefit.

The liabilities for "Above-market purchased energy contracts" and "Excess
Merrill Creek Reservoir capacity and other electric restructuring liabilities"
resulted from the extraordinary charge to earnings discussed in Note 4 to the
Consolidated Financial Statements.  The accrual of these liabilities had no
effect on current period cash flow and also will not alter future operating cash
flows.

Capital expenditures decreased by $17.5 million to $51.9 million in the current
nine-month period partly due to Conectiv's service subsidiary's capital
expenditures for assets which are used by more than one Conectiv subsidiary.

Cash flows from financing activities reflect a use of cash for common dividends
paid of $69.3 million for the first nine months of 1999 compared to $71.1
million for the first nine months of 1998.

                                      -22-
<PAGE>

In May 1999, DPL repaid at maturity $30.0 million of 7.50% Medium Term Notes.
In June 1999, DPL repaid $1.2 million of 6.95% Amortizing First Mortgage Bonds.
These debt payments caused the September 30, 1999 balance of "Long-term debt due
within one year" to decrease from the December 31, 1998 balance.

In July 1999, the Delaware Economic Development Authority issued on behalf of
DPL $33.33 million of VRDB due on demand or at maturity in July 2024.  The
proceeds from the VRDB were used to refinance $22.33 million of 7.3% long-term
debt in September 1999 and $11.0 million of 7.5% long-term debt in October 1999.

DPL's capital structure including short-term debt and current maturities of
long-term debt, expressed as a percentage of total capitalization, is shown
below as of September 30, 1999, and December 31, 1998.


<TABLE>
<CAPTION>
                                                 September 30,   December 31,
                                                      1999           1998
                                                 --------------  -------------
<S>                                             <C>             <C>
Common stockholder's equity                          35.6%          40.8%
Preferred stock                                       8.6%           7.7%
Long-term debt and variable rate demand bonds        55.7%          49.0%
Short-term debt and
 current maturities of long-term debt                 0.1%           2.5%
</TABLE>

The decrease in common stockholder's equity and increase in long-term debt as a
percent of total capitalization were primarily due to the special and
extraordinary charges recorded in the third quarter of 1999, partly offset by a
reduction in long-term debt outstanding.

DPL's ratios of earnings to fixed charges and earnings to fixed charges and
preferred stock dividends under the SEC Method are shown below. See Exhibit
12-A, Ratio of Earnings to Fixed Charges, and Exhibit 12-B, Ratio of Earnings to
Fixed Charges and Preferred Dividends, for additional information.

<TABLE>
<CAPTION>

                                          12 Months            Year Ended December 31,
                                            Ended         -----------------------------------
                                      September 30, 1999  1998   1997     1996    1995   1994
                                      ------------------  ----  -------  ------  ------  ----
<S>                                   <C>                 <C>   <C>      <C>     <C>     <C>
Ratio of Earnings to:
 Fixed Charges (SEC Method)                  3.43          2.92    2.83    3.33    3.54  3.49
 Fixed Charges and Preferred Stock
   Dividends (SEC Method)                    3.18          2.72    2.63    2.83    2.92  2.85
</TABLE>

Forward-looking Statements
--------------------------

The Private Securities Litigation Reform Act of 1995 (Litigation Reform Act)
provides a "safe harbor" for forward-looking statements to encourage such
disclosures without the threat of litigation, provided those statements are
identified as forward-looking and are accompanied by meaningful, cautionary
statements identifying important factors that could cause the actual results to
differ materially from those projected in the statement.  Forward-looking
statements have been made in this report. Such statements are based on
management's beliefs as well as assumptions made by and information currently
available to management.  When used herein, the words "will," "anticipate,"
"estimate," "expect," "believe," "objective," and similar expressions are
intended to identify forward-looking statements.  In addition to any assumptions
and other factors referred to specifically in connection with such forward-
looking statements, factors that could cause actual results to differ materially
from those contemplated in any forward-looking statements include, among others,
the following: deregulation of energy supply and the unbundling of delivery
services; an increasingly competitive marketplace; results of any asset

                                      -23-
<PAGE>

dispositions; sales retention and growth; federal and state regulatory actions;
future litigation results; costs of construction; operating restrictions;
increased costs and construction delays attributable to environmental
regulations; nuclear decommissioning and the availability of reprocessing and
storage facilities for spent nuclear fuel; and credit market concerns.  DPL
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
The foregoing list of factors pursuant to the Litigation Reform Act should not
be construed as exhaustive or as any admission regarding the adequacy of
disclosures made by DPL prior to the effective date of the Litigation Reform
Act.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------  ----------------------------------------------------------

As of September 30, 1999, there were no material changes in the information
previously disclosed under "Quantitative and Qualitative Disclosures About
Market Risk" on pages II-11 and II-12 of DPL's 1998 Annual Report on Form 10-K.

                                      -24-
<PAGE>

                           PART II. OTHER INFORMATION
                           --------------------------


Item 1.  Legal Proceedings
--------------------------

Update of "Air Quality Regulations" included on page I-10 of DPL's 1998 Report
------------------------------------------------------------------------------
on Form 10-K
------------

DPL and the Delaware Department of Natural Resources and Environmental Control
(DNREC) have reached a settlement regarding DPL's challenge, in Delaware
Superior Court, to DNREC's post-Reasonably Available Control Technology oxides
of nitrogen (NOx) emission regulations.  The regulations, which require
attainment of summer seasonal emission reductions of up to 65% below 1990 levels
through reduced emission or the procurement of NOx emission allowances beginning
in 1999, failed to take into account uncertainties regarding the ability of
existing technologies to accomplish emission reductions and included stringent
penalty provisions which could hinder development of a NOx allowance market.  In
reaching settlement, DNREC agreed to revise the regulations to clarify the
factors to be considered in undertaking enforcement for noncompliance despite
all reasonable efforts to comply and revised the penalty provisions for the
years 1999 and 2000 to eliminate provisions tending to interfere with creation
of a viable NOx allowance market. Through the installation of post-combustion
control technology, DPL is making efforts to achieve compliance with the revised
regulations.

Item 5.  Other Information
--------------------------

Electric System Outages
-----------------------

As previously reported, after customers experienced electric service outages in
early July during an extended period of hot and humid weather and high demand
for electricity, (i) the DPSC initiated an investigation of outages occurring in
DPL's Delaware service territory (as well as an examination of post-Merger DPL
customer service levels); and (ii) the MPSC initiated an investigation of
outages occurring in the service territories of DPL and other Maryland electric
utilities.  DPL has responded to, and expects to continue to respond to,
information requests during the pendency of these investigations.

On October 13, 1999, the DPSC initiated a formal proceeding to investigate the
adequacy of DPL's facilities and services, including the remedies and incentives
(if any) to be imposed or offered, respectively, to ensure the continued
adequacy of DPL's facilities and services.  That proceeding also will consider
the effects (if any) of electric industry restructuring in Delaware on the
reliability of electric service.  The DPSC's order requires that DPL give the
DPSC at least 30 days' notice upon entering any contract for the sale of any
generating facility on the Delmarva Peninsula to any third party.  DPL is
actively involved in defending actions taken (including rotating load-shedding)
during early-July and explaining its view that electric industry restructuring
is unlikely to affect DPL electric system reliability.  This DPSC proceeding is
scheduled to conclude by May 2000.

On November 4-5, 1999, the MPSC held legislative-type hearings on outages
occurring during 1999 in the service territories of DPL and other Maryland
utilities.

                                      -25-
<PAGE>

Item 6.  Exhibits And Reports On Form 8-K
-----------------------------------------

Exhibits
--------


Exhibit 12-A, Ratio of Earnings to Fixed Charges

Exhibit 12-B, Ratio of Earnings to Fixed Charges and Preferred Dividends

Exhibit 27, Financial Data Schedule

Reports on Form 8-K
-------------------

DPL filed a Report on Form 8-K dated July 27, 1999 reporting on Item 5, Other
Events.

DPL filed a Report on Form 8-K dated August 31, 1999 reporting on Item 5, Other
Events.

DPL filed a Report on Form 8-K dated September 30, 1999 reporting on Item 5,
Other Events, and Item 7(c), Exhibits.

DPL filed a Report on Form 8-K dated October 26, 1999 reporting on Item 5, Other
Events.

                                      -26-
<PAGE>

                                   SIGNATURE


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.



                               Delmarva Power & Light Company
                               ------------------------------
                                        (Registrant)



Date:     November 12, 1999         /s/ John C. van Roden
     -----------------------------  -------------------------------------
                                    John C. van Roden, Senior Vice
                                    President and Chief Financial Officer

                                      -27-
<PAGE>

                                 EXHIBIT INDEX
                           ------------------------




                                                    Exhibit
Title of Exhibit                                     Number
----------------------------------------            --------

Ratio of Earnings to Fixed Charges                    12-A

Ratio of Earnings to Fixed Charges
  and Preferred Dividends                             12-B

Financial Data Schedule                                27