FORM 10-K
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
     (Mark One)
      [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934
                       For the fiscal year ended December 31, 1999
                                     OR
      [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                       Commission file number 1-11023
                              E'TOWN CORPORATION
              (Exact name of registrant as specified in its charter)
            New Jersey                                    22-2596330
(State of incorporation)                    (I.R.S. Employer Identification No.)
     600 South Avenue
     Westfield, New Jersey                                  07090
     (Address of principal executive offices)      (Zip Code)

            Registrant's telephone number, including area code: (908)654-1234
            Securities registered pursuant to Section 12(b) of the Act:

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

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

            Registrant's telephone number, including area code:(908)654-1234
             Securities registered pursuant to Section 12(b) of the Act:

   Title of each class                Name of each exchange on which registered
               None                                      None
          Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements  for the past 90 days. Yes __X__ No_____

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorp-  orated by reference  in Part III of this Form 10-K or any  amendment to
this Form 10-K.  ___X___

On December 31, 1999, the aggregate market value of E'town  Corporation's voting
stock held by non-affiliates was $543,325,968.

On December 31, 1999, there were 8,728,128  shares of Common Stock  outstanding,
exclusive  of  treasury   shares  or  shares  held  by  subsidiaries  of  E'town
Corporation.

Note: All of the Common Stock of Elizabethtown  Water Company is owned by E'town
Corporation.

Parts II and IV  incorporate  information by reference from the Annual Report to
Shareholders of E'town Corporation for the Year Ended December 31, 1999.
<PAGE>

                       E'TOWN CORPORATION
                  ELIZABETHTOWN WATER COMPANY
                1999 ANNUAL REPORT ON FORM 10-K

                       TABLE OF CONTENTS
PART I                                                             Page

 Item 1.  Business                                                     1
          Organization                                                 1
          Pending Merger                                               1
          Service Area and Customers                                   2
          Water Supply                                                 2
          Water Treatment Facilities and Water Quality Regulations     3
          Transmission and Distribution                                4
          Energy Supply                                                4
          Environmental Matters                                        4
          Franchises                                                   5
          Employee Relations                                           5
          Rate Matters                                                 5
          Real Estate Matters                                          6
          Other Matters                                                7
 Item 2.  Properties                                                   8
 Item 3.  Legal Proceedings                                            8
 Item 4.  Submission of Matters to a Vote of Security Holders          8

 PART II

 Item 5.  Market for the Corporation's Common Stock and
           Related Stockholder Matters                                 8
 Item 6.  Selected Financial Data                                      9
 Item 7.  Management's Discussion and Analysis of Consolidated
           Financial Condition and Results of Operations              10
 Item 8.  Financial Statements and Supplementary Data                 14
 Item 9.  Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure                        14

PART III

 Item 10. Directors and Executive Officers of the Registrant          15
 Item 11. Executive Compensation                                      17
 Item 12. Security Ownership of Certain Beneficial Owners and
           Management                                                 22
 Item 13. Certain Relationships and Related Transactions              23

PART IV

 Item 14. Exhibits, Financial Statement Schedules and Reports
           on Form 8-K                                                23

SIGNATURES                                                            25

AUDITORS' REPORT & SUPPLEMENTAL SCHEDULE                              27

EXHIBIT INDEX                                                         29

APPENDIX I
      Elizabethtown Water Company and Subsidiary Consolidated Financial
      Statements for the Years Ended December 31, 1999, 1998 and 1997
      and Independent Auditors' Report
<PAGE>

                          E'TOWN CORPORATION
                      ELIZABETHTOWN WATER COMPANY
                       Annual Report on Form 10-K
                   For the year ended December 31, 1999

                                    PART I
Item 1.   Business

ORGANIZATION
E'town Corporation (E'town or Corporation) was originally incorporated under
the laws of the State of New Jersey in 1985 to serve as a holding company for
Elizabethtown Water Company (Elizabethtown or Company) and its wholly owned
subsidiary, The Mount Holly Water Company (Mount Holly). Elizabethtown and
Mount Holly are regulated water utilities which, as a consolidated entity,
are referred to herein as Elizabethtown Water Company (Elizabethtown Water
Company). Applied Wastewater Management (AWWM) is a regulated wastewater
utility acquired in June 1998 and is engaged in the ownership and operation
of  water and wastewater facilities. Elizabethtown, Mount Holly and AWWM are
public utilities and are regulated by the New Jersey Board of Public
Utilities (BPU). Elizabethtown, Mount Holly and AWWM comprise the Regulated
Utilities segment of the business for financial and management reporting
purposes. Liberty Water Company (Liberty) is a wholly owned, non-regulated
subsidiary of E'town formed in July 1998 to operate the water system of the
City of Elizabeth, New Jersey under a 40-year operating contract. Edison
Water Company (Edison) is a wholly owned, non-regulated  subsidiary of E'town
formed in July 1997 to operate the water system of the Township of Edison,
New Jersey under a 20-year operating contract. Edison and Liberty comprise
the Contract Operations segment of the business for financial and management
reporting purposes.  Also acquired in June 1998, Applied Water Management,
Inc. (AWM), is engaged in the design and construction of  wastewater
facilities as well as in the pumping and hauling of wastewater materials.
This entity represents the Engineering/Operations and Construction segment of
the business for financial and management reporting purposes. E'town
Properties, Inc. (Properties) was incorporated in 1987 as a wholly owned and
non-regulated subsidiary of E'town to acquire, develop and sell real estate
holdings. E'town provides the financing for its non-regulated subsidiaries
through issuance of short- and long-term debt  as well as through public
equity offerings for capital contributions to all subsidiaries. E'town and
Properties comprise the Financing and Investment segment of the business for
financial and management reporting purposes.

PENDING MERGER
On November 21, 1999, E'town entered into an agreement (Merger Agreement)
with Thames Water Plc (Thames Water) under which Thames Water has agreed,
subject to certain conditions, to acquire E'town for $68 per share in cash or
approximately $607 million. Thames Water will also assume the debt of E'town.
The acquisition will take the form of a merger (Merger) of E'town with a
newly formed subsidiary of Thames Water and E'town will be the surviving
company.

Regulated Utilities Segment
Elizabethtown is a New Jersey corporation, one of whose predecessors was
first incorporated in 1854.  The present corporation was formed in 1961 as a
result of a consolidation of Elizabethtown Water Company Consolidated and
Plainfield-Union Water Company. Elizabethtown owns all of the common stock of
Mount Holly. The assets and operating results of Elizabethtown constitute the
predominant portions of E'town's assets and operating results.
-1-
<PAGE>

SERVICE AREA AND CUSTOMERS
At December 31, 1999, Elizabethtown and Mount Holly furnished water service
on a retail basis to general customers and to industrial customers totaling
203,711 in 54 municipalities in the counties of Union, Middlesex, Somerset,
Mercer, Hunterdon, Ocean, Morris and Burlington in New Jersey. AWWM serves
1,145 wastewater and 166 water customers.

Elizabethtown also provides, on a wholesale basis, a portion of the water
requirements of seven additional municipalities with their own retail water
systems and, of three other investor-owned water companies.  Water for fire
protection service is provided to various municipalities and also to
commercial and industrial establishments.

At December 31, 1999, Edison and Liberty served 29,051 customers under their
contracts to operate the water systems of the Township of Edison and the City
of Elizabeth, both in New Jersey.

The operating revenues of E'town by major classification of customer for the
twelve months ending December 31, 1999 are as follows:

                General customers                             57.1%
                Other water systems                           13.3%
                Industrial wholesale customers                 4.6%
                Fire service/miscellaneous                    10.5%
                Contract operations                            7.0%
                Engineering, operations and construction       7.5%
                                                             -----
                Total                                        100.0%
                                                             =====

The water systems are substantially all metered except for fire service.

Additional operating statistics appear in Item 6.

WATER SUPPLY
The water supply systems of Elizabethtown and Mount Holly are physically
separate. During 1999, Elizabethtown's pumpage averaged 134.8 million gallons
per day (MGD) and Mount Holly's pumpage averaged 3.9 MGD. Elizabethtown and
Mount Holly believe they have sufficient water supply sources to meet the
current and expected future needs of their customers.

In 1999, surface water sources supplied approximately 90% of Elizabethtown's
supply with wells supplying the remaining 10%. All of Mount Holly's water had
been produced from wells until March,1998 at which time it began purchasing
1.0 million gallons per day from another purveyor on a temporary basis.

Substantially all of Elizabethtown's surface water is purchased under a
long-term contract with the New Jersey Water Supply Authority (NJWSA) which
requires Elizabethtown to purchase (i) 32 MGD from the state-owned Delaware
and Raritan Canal which transports water from the Delaware River Basin plus
(ii) 70 MGD from the Raritan River Basin which includes the state-owned
Spruce Run-Round Valley Reservoir System. The safe yield of the Raritan River
Basin and the Delaware and Raritan Canal is 225 MGD of which 150 MGD is
presently allocated to Elizabethtown and others. The NJWSA has available, and
Elizabethtown purchases, water above the Company's minimum purchase
obligation on an as-needed basis.

In 1998, Mount Holly commenced a construction project, called the Mansfield
Project, to comply with New Jersey legislative restrictions to obtain
alternative water supplies, thereby reducing its water pumpage from an
aquifer, which had been subject to over-pumping by Mount Holly and various
local purveyors in a portion of southern New Jersey. A portion of this
project was placed into service in the third quarter of 1998 and the
remaining portion of the project was placed into service in late December
1999.
-2-
<PAGE>

WATER TREATMENT FACILITIES AND WATER QUALITY REGULATIONS
Elizabethtown owns and operates two treatment plants at the confluence of the
Raritan and Millstone Rivers adjacent to the Delaware and Raritan Canal to
treat surface water purchased from the NJWSA. The plants can withdraw water
from any of the above sources, which is an advantage in the event that one
source becomes temporarily unavailable due to poor water quality. The
Raritan-Millstone Plant (Plant), Elizabethtown's primary water treatment
plant, was placed in service in 1931 and has continually been upgraded since
that time. The Plant has a production capacity of 155 MGD. The Canal Road
Water Treatment Plant (Canal Road), Elizabethtown's secondary water treatment
plant, was placed in service in October 1996 to increase Elizabethtown's
sustainable production capacity and provide the ability to continue to meet
water quality regulations. Canal Road has an initial rated production
capacity of 40 MGD. In September 1999, Tropical Storm Floyd flooded the Plant
which required the facility to be withdrawn from service for approximately 3
days. During that time, water demands were met by Canal Road, wells and by
purchasing additional water from adjacent water utilities.

Elizabethtown also operates smaller treatment facilities to treat groundwater
produced by certain wells. Mount Holly operates similar groundwater treatment
facilities.

Both the United States Environmental Protection Agency (EPA) and the DEP
regulate the operation of Elizabethtown's and Mount Holly's water treatment
and distribution systems and the quality of the water Elizabethtown and Mount
Holly deliver to their customers. Currently, Elizabethtown and Mount Holly
believe they are in compliance, in all material respects, with all present
federal and state water quality standards, including all regulations
promulgated to date by the EPA pursuant to the Federal Safe Drinking Water
Act, as amended (SDWA), and by the DEP pursuant to similar state legislation.

Elizabethtown has responded in recent years to water quality regulations
promulgated by DEP and the EPA by replacing groundwater supplies with
increased supplies of surface water. The Company expects this trend to
continue because it is preferable from the standpoint of operational
efficiency and cost to modify treatment processes and facilities at one or
two large plants than to constantly upgrade treatment facilities at multiple
well sites.

Water Quality Regulations
As required by the SDWA, the EPA has established maximum contaminant levels
(MCLs) for various substances found in drinking water. As authorized by
similar state legislation, the DEP has set MCLs for certain substances which
are more restrictive than the MCLs set by the EPA. In certain cases, the EPA
and DEP have also mandated that certain treatment procedures be followed in
addition to satisfying MCLs established for specific contaminants.  The DEP
is also the EPA's agent for enforcing the SDWA in New Jersey and, in that
capacity, monitors the activities of Elizabethtown and Mount Holly and
reviews the results of water quality tests performed by Elizabethtown and
Mount Holly for adherence to applicable regulations. Regulations generally
applicable to water utilities, including Elizabethtown and Mount Holly,
include the Lead and Copper Rule (LCR), the MCLs established for various
volatile organic compounds (VOCs), the MCLs proposed for radionuclides and
the Surface Water Treatment Rule (SWTR).

Lead and Copper Rule
The LCR requires Elizabethtown and Mount Holly to test the quantity of lead
and copper in drinking water at the customer's tap and, if certain
contaminant levels (action levels) are exceeded, to notify customers and
initiate a public information campaign advising customers how to minimize
exposure to lead and copper.  The LCR also requires Elizabethtown to add
corrosion inhibitors to water to minimize leaching of lead from piping,
faucets and soldered joints into water consumed at the tap.
Corrosion inhibitor facilities for Elizabethtown were completed in 1996. The
Company is in compliance with LCR requirements.
-3-
<PAGE>

Volatile Organic Compounds
VOCs include various substances (primarily synthetic organic solvents) which
have percolated into groundwater aquifers from surface sources.
Elizabethtown has found VOCs in excess of the applicable MCLs in certain of
its wells and has either suspended the use of such wells or constructed
aeration towers which remove such contaminants from the water by venting them
into the atmosphere.  Because underground water flows are difficult to map,
it is difficult to predict when and where contamination may occur. To the
extent that contamination in excess of applicable MCLs occurs at wells
lacking aeration towers, Elizabethtown will consider building aeration
towers, if feasible and cost effective, or consider closing such wells,
thereby increasing the Company's reliance on surface water. To date, Mount
Holly has not been affected by VOC contamination.

Radionuclides
Radionuclides are naturally occurring radioactive substances (primarily
radon) found in groundwater.  Like VOCs, radon can be removed from
groundwater using aeration towers. If the MCLs proposed for all radionuclides
are finally adopted, Elizabethtown believes that it will abandon wells with
aggregate production capacity of approximately 5 MGD, thereby further
increasing Elizabethtown's reliance on surface water. Elizabethtown currently
owns and operates wells with an aggregate safe daily yield of 19 MGD.

In 1999 Elizabethtown removed certain wells from service due to an exceedance
of MCLs.  The customers of these wells were then connected to the
Elizabethtown system.

Surface Water Treatment Rule
The operations of Elizabethtown's Plant and Canal Road are subject to the
SWTR.Improvements to the facilities are made when necessary in order to
maintain compliance with the SWTR.

TRANSMISSION AND DISTRIBUTION
As of December 31, 1999, Elizabethtown Water Company's transmission and
distribution system included 2,998 miles of transmission and distribution
mains. Mains range in size up to 60 inches, substantially all of which are
either ductile iron, cast iron or pre stressed concrete pipe. Elizabethtown
conducts an ongoing program to clean and line its older cast iron mains the
cost of which is capitalized and has been included in rate base in
stipulations settling recent rate cases. On an ongoing basis, Elizabethtown
assesses the capacity of its system to maintain adequate pressures and
initiates plans to construct pumping, transmission and storage facilities as
needed.

ENERGY SUPPLY
Elizabethtown pumps most of its water with electric power purchased from two
major electric utilities.  The Company has replaced certain electric pumps
with natural gas-fired pumps over the last several years to reduce energy
costs. Elizabethtown also has other diesel powered pumping and generating
facilities at its major treatment plants and at certain transfer stations to
provide basic service during possible electrical shortages. Elizabethtown has
not, to date, experienced any shortage of electric energy, natural gas or
diesel fuel to operate its pumps and has cooperated with its electric
suppliers during their peak periods by operating non-electrical pumping
facilities upon request.

ENVIRONMENTAL MATTERS
Elizabethtown and Mount Holly are also subject to regulation by the DEP with
respect to water supply plans and specifications for the construction,
improvement, alteration and operation of public water supply systems and with
respect to the quality of any residuals from treatment plants.

As a normal byproduct of treating surface water, Elizabethtown's existing
surface water treatment plants generate silt removed from untreated river
water plus residue from chemicals used in the treatment process.
Historically, Elizabethtown had disposed of this material in landfills.  As a
result of revised regulations governing landfills, Elizabethtown has been
reusing this material on site for flood protection and is presently removing
some material off-site for beneficial reuse.

Under New Jersey law, environmental matters are addressed by the DEP before
diversion allowances or other water supply projects are authorized. To-date,
Elizabethtown has been able to construct all plant facilities and obtain all
diversion authorizations necessary to maintain proper service. Mount Holly
has also been able to construct all facilities and obtain all necessary
diversion authorizations.
-4-
<PAGE>

FRANCHISES
The property and franchises of Elizabethtown and Mount Holly are subject to
rights of eminent domain of the State of New Jersey. These rights have been
delegated by statutes now in effect to municipalities or groups of
municipalities and have been or may be delegated to various public agencies.
No such rights of eminent domain have been exercised since 1931.

EMPLOYEE RELATIONS
A substantial portion of the operating personnel of Elizabethtown and Mount
Holly, or less than half of all E'town employees, are covered by union
contracts. The contracts between the Company and the Utility Workers Union of
America (A.F.L.-C.I.O.) were renegotiated on February 1, 1999 and will expire
on January 31, 2003. The contract provides for wage increases of 1.5% on the
first of February and August beginning in 1999 through August of 2002. The
Company considers relations with both union and nonunion employees to be
satisfactory.

RATE MATTERS
Elizabethtown, Mount Holly and AWWM are subject to regulation by the New
Jersey Board of Public Utilities (BPU) with respect to the issuance and sale
of securities, rates and service, classification of accounts, mergers, and
other matters. Rate relief is sought periodically to cover the cost of increased
operating expenses, increases in financing expenses due to additional
investments in utility plant and other costs of doing business.

Elizabethtown
In December 1997 the BPU adopted a Stipulation for rate increases for
Elizabethtown and Mount Holly, effective January 1, 1998, for the full
recovery of costs associated with SFAS No. 106 "Accounting for Employer's
Postretirement Benefits," on an accrual basis less the costs associated with
SFAS No. 106 expenses previously recovered in rates. The total increases in
annual operating revenues resulting from these Stipulations are $.39 million
for Elizabethtown and $.02 million for Mount Holly.

In accordance with the terms of the pending Merger Agreement with Thames
Water, Elizabethtown will postpone filing for rate relief to recover
additional construction and financing costs incurred since base rates were
last established in October 1996 until at least August 2000.

Mount Holly
In 1998, Mount Holly commenced a construction project, called the Mansfield
Project, to comply with New Jersey legislative restrictions to obtain
alternative water supplies, thereby reducing its water pumpage from an
aquifer, which had been subject to over-pumping by Mount Holly and various
local purveyors in a portion of southern New Jersey. A portion of this
project was placed into service in the third quarter of 1998 and the
remaining portion of the project was placed into service in late December
1999.

To settle an appeal initiated by another water purveyor in 1995 concerning
the diversion rights for the Mansfield Project, Mount Holly signed a
Stipulation in 1997 with the purveyor, the DEP and other parties, requiring
Mount Holly to purchase one million gallons per day from the other purveyor
during the two-year period that the Mansfield Project was being constructed.
Purchases began during March of 1998, after completion of an interconnection
and ended in January 2000 shortly after the Mansfield Project went into service.

In September 1997 Mount Holly filed a petition with the BPU to establish a
Purchased Water Adjustment Clause (PWAC) to reflect the cost of water
purchased from the other purveyor under the aforementioned Stipulation
Agreement. In May 1998, the BPU adopted a Stipulation signed by the parties
to the PWAC case for an increase in annual revenues under Mount Holly's PWAC
of $1.3 million or 38.9%.
-5-
<PAGE>

Effective January 1, 2000, Mount Holly received an increase in annual rates
of $1.9 million. This increase included costs for Mount Holly's Mansfield
Project that was placed in service at the end of December 1999. The rate
decision also reflected the elimination of the PWAC. After the elimination of
the PWAC the net rate increase was $.5 million. This increase also reflects
additional construction and financing costs, as well as increases in
operating costs, since base rates were last established in January 1996.

REAL ESTATE MATTERS
Financing and Investment Segment
E'town is in the process of selling its remaining parcels of undeveloped
land. Several parcels have been sold and the proceeds are being invested into
water and wastewater projects. The eventual sale of these parcels is
contingent upon the purchaser obtaining various approvals for development.
This process could take up to several years. As of December 31, 1999, all the
remaining properties are under contract to be sold.

Contract Operations Segment
In July 1998 E'town, through Liberty, entered into a contract with the City
of Elizabeth (Elizabeth), New Jersey to operate its water system under a
40-year contract serving approximately 17,600 customers. Under the contract,
Liberty made payments to Elizabeth of $19.7 million in 1998 and $12 million
in 1999 and is obligated to make a payment of $19 million in June 2000. Also
under the terms of the contract, Liberty will deposit  $57.8 million from
customer collections over the 40-year contract into a fund administered by
Elizabeth (Fund Deposits), of which $52.3 million is due after 2012, to be
used by Elizabeth to pay for capital improvements or for other water system
purposes. Liberty is responsible for $7.45 million of construction
expenditures, primarily for meter replacements, over the life of the
contract. Of these total commitments, approximately $2.5 million is expected
to be expended in the next three years. Over the life of the contract,
E'town  will receive all water revenues from billing the customers of the
water system in accordance with rate increases set forth in the contract
except for the Fund Deposits discussed above. E'town is also responsible for
all operating expenses as well as the capital expenditures discussed above.
Performance by Liberty of the contract provisions is guaranteed by E'town.

In 1997 E'town, through Edison, entered into a contract  with the Township
of Edison, New Jersey to operate its water system under a 20-year contract
serving approximately 11,500 customers. Edison bills and receives all water
revenues generated as a result of operating the water system and pays: (i)
all operating and maintenance expenses for the water system, (ii) certain
annual payments to the Township of Edison and (iii) costs of specific capital
improvements. Aggregate annual payments and the estimated costs of capital
improvements are expected to be approximately $25 million during the 20-year
life of the contract of which $12.5 million has been spent as of December 31,
1999. Of the total, approximately $2.9 million is expected to be expended in
the next three years. An initial payment of $5.7 million was made upon the
closing in June 1997. Performance by Edison of the contract provisions is
guaranteed by E'town.

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

Engineering/ Operations and Construction Segment
In June 1998 the Corporation purchased AWM which provides "one-stop shopping"
for water and wastewater services to residential and commercial developers.
These services include the design, construction and operation of water and
wastewater facilities and, in some instances, purchase of such utilities from
developers at project build-out by AWWM, thereby adding to E'town's regulated
utility customer base.  AWM expects to incur capital expenditures of $2.0
million during the next three years. These expenditures consist primarily of
vehicles and equipment used in the construction and waste hauling operations.
In 1999, AWM acquired a septic services business for $.7 million and a group
of small, non-regulated wastewater treatment facilities for $1.0 million.
-6-
<PAGE>

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

In September 1999, Elizabethtown withdrew its primary water treatment plant,
the Raritan-Millstone Water Treatment Plant, from service as a result of
flooding from Tropical Storm Floyd. For several days, Elizabethtown had
difficulty maintaining adequate water pressure in portions of its
distribution system because overall system production levels were
substantially less than normal. Customers in portions of a few municipalities
were without water service for approximately 3 days. Costs incurred
to repair and replace equipment damaged by the flood and to respond to
inquiries by customers, regulatory bodies and the media have been deferred
and are expected to be recoverable through insurance. The Company has
incurred $7.0 million of flood-related expenditures and has received an
advanced reimbursement of $2.0 million from its insurance carrier. The
remaining $5.0 million of flood-related expenditures is reported on the
Consolidated Balance Sheets as a deferred charge at December 31, 1999. The
loss of revenues due to below normal water consumption is not recoverable
through insurance.

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



Executive Officers of the Corporation and Elizabethtown

See Item 10 for disclosure of the executive officers of E'town and
Elizabethtown.
-7-
<PAGE>

Item 2. Properties

All principal plants and other materially important units of property of the
Corporation are owned in fee. The Corporation considers such property to be
in good operating condition.

Item 3. Legal Proceedings

On September 23, 1999, two parties filed separate class action lawsuits for
compensatory damages and related fees on behalf of themselves and similarly
situated residential and commercial customers against Elizabethtown Water
Company, Edison Water Company and Liberty Water Company. The lawsuit alleges
negligence regarding the quantity and quality of water services provided by
the Corporation during the period in September 1999 when Elizabethtown's
primary water treatment plant was flooded from Tropical Storm Floyd and was
withdrawn from service for approximately 3 days. Elizabethtown has notified
its insurance carrier of the lawsuit and has filed a motion for summary
judgment to dismiss the lawsuit as a class action proceeding prior to
answering the allegations.  In March 2000, the New Jersey Superior Court
(NJSC) ruled that in the event the lawsuit is not dismissed, the case be
referred to the BPU for purposes of investigating the matter and reporting
its findings to the NJSC. The NJSC, in view of the BPU's findings, will then
determine what, if any, damages were suffered by the plaintiffs and what
liability, if any, rests with Elizabethtown. E'town Corporation maintains
that such allegations are without merit and believes that the plaintiffs'
chances of prevailing are not significant.


The Corporation, in the ordinary course of business, periodically becomes
involved in litigation. There is currently no litigation in progress, other
than the items discussed above, regarding environmental or other issues in
which an outcome adverse to the Corporation could have a material impact on
the financial statements.

Item 4. Submission of Matters to a Vote of Security Holders

                   None

                             PART II

Item 5. Market for the Corporation's Common Stock and Related Stockholder
         Matters

      This information is included in Exhibit 13, filed herewith, and is
      incorporated herein by reference.  All of the common stock of
      Elizabethtown Water Company is owned by E'town.
-8-
<PAGE>

Item 6.  Selected Financial Data
                               E'town Corporation

This information is included in Exhibit 13, filed herewith, and is
incorporated herein by reference.

                           Elizabethtown Water Company

                                   1999      1998      1997      1996      1995
--------------------------------------------------------------------------------
Utility Plant (Thousands)
 Utility Plant - net          $ 650,771 $ 604,899 $ 572,785 $ 560,024 $ 507,858
 Construction Expenditures
  (excluding AFUDC)              56,635    43,500    24,612    55,125    73,789
Total Assets                    741,187   683,328   646,318   640,779   580,808
Capitalization (Thousands)
 Shareholder's Equity           220,461   208,573   193,354   182,293   176,685
 Preferred Stock                 12,000    12,000    12,000    12,000    12,000
 Debt (1)                       296,823   267,178   249,974   250,963   208,952
 Total Capitalization         $ 529,284 $ 487,751 $ 455,328 $ 445,256 $ 397,637
Capitalization Ratios
 Common Stock                       42%       43%       42%       41%       44%
 Preferred Stock                     2%        2%        3%        3%        3%
 Debt (1)                           56%       55%       55%       56%       53%
Earnings to Fixed Charges
 Ratio                             2.94      3.33      2.91      2.40      2.77
Earnings to Fixed Charges and
 Preferred Dividends               2.73      3.09      2.71      2.22      2.54
Earnings Applicable to
 Common Stock (Thousands)     $  20,592 $  23,955 $  20,092 $  15,942 $  16,512

Operating Statistics
 Revenues (Thousands)
 General Customers            $  92,111 $  87,698 $  85,195 $  68,797 $  67,455
 Other Water Systems             21,597    22,181    21,900    18,929    18,720
 Industrial Wholesale             7,531     8,148     8,451     7,869     7,947
 Fire Service/Miscellaneous      17,067    16,820    16,242    14,763    14,276
 Total Revenues               $ 138,306 $ 134,847 $ 131,788 $ 110,358 $ 108,398

Water Sales - Millions of
 Gallons (mg)
  General Customers              25,842    24,609    24,333    22,890    23,999
  Other Water Systems            13,806    14,397    14,504    15,049    15,569
  Industrial Wholesale            3,270     3,482     3,533     3,567     3,673
  System Use and
   Unaccounted For                7,717     6,933     6,948     6,444     6,402
  Total Water Sales              50,635    49,421    49,318    47,950    49,643
System Delivery by Source - mg
  Surface                        44,520    48,067    42,585    41,485    42,646
  Wells                           5,729     1,072     6,689     6,328     6,764
  Purchased                         386       282        44       137       233
  Total System Delivery          50,635    49,421    49,318    47,950    49,643
Millions of Gallons Pumped:
  Average Day                       139       135       135       131       136
  Maximum Day                       230       196       205       170       183
General Information
  Customers                     203,711   200,251   197,663   195,482   192,617
  Miles of Main                   2,998     2,953     2,926     2,899     2,869
  Fire Hydrants Served           17,644    16,402    16,228    16,012    15,650

================================================================================
(1) Includes long-term debt, notes payable and long-term debt-current portion.

See Management's Discussion and Analysis of Consolidated Financial Condition
and Results of Operations and Notes to Consolidated Financial Statements
appearing elsewhere in this report.
-9-
<PAGE>

Item 7.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                          E'town Corporation

This information is included in Exhibit 13, filed herewith, and is
incorporated by reference.

                Elizabethtown Water Company and Subsidiary

The water utility operations of Elizabethtown Water Company (Elizabethtown)
and its subsidiary, The Mount Holly Water Company (Mount Holly), presently
constitute the major portion of E'town Corporation (E'town or Corporation),
assets and earnings.  Elizabethtown and Mount Holly are regulated water
companies which, as a consolidated entity are referred to herein as
Elizabethtown Water Company (Company).  Mount Holly contributed about 4% of
the Company's consolidated operating revenues for 1999. The following
analysis sets forth significant events affecting the financial condition of
Elizabethtown at December 31, 1999, and the results of operations for the
years ended December 31, 1999 and 1998.

LIQUIDITY AND CAPITAL RESOURCES
Capital Expenditures Program
Elizabethtown
In 1999 net capital expenditures were $55.2 million, primarily for water utility
plant.  Elizabethtown's three-year capital program includes $62.0 million for
routine projects (services, hydrants, system rehabilitation and main
extensions not funded by developers) and $73.1 million for transmission
system upgrades, a new operations center, expansion of the Canal Road Water
Treatment Plant (Canal Road) and other projects. Canal Road will be expanded
to provide for enhanced system reliability and to accomodate customer growth.
Canal Road was designed as a 40 million gallon per day (MGD) plant,
expandable to 200 MGD.

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

In 1998 Mount Holly commenced a construction project, called the Mansfield
Project, to comply with New Jersey legislative restrictions to obtain
alternative water supplies, thereby reducing its water pumpage from an
aquifer, which had been subject to over-pumping by Mount Holly and various
local purveyors in a portion of southern New Jersey. A portion of this
project was placed into service in the third quarter of 1998 and the
remaining portion of the project was placed into service in late December
1999.

To settle an appeal initiated by another water purveyor in 1995 concerning
the diversion rights for the Mansfield Project, Mount Holly signed a
Stipulation in 1997 with the purveyor, the New Jersey Department of
Environmental Protection (DEP) and other parties, requiring Mount Holly to
purchase one million gallons per day from the other purveyor during the
two-year period that the Mansfield Project was being constructed. Purchases
began during March of 1998, after completion of an interconnection and ended
in January 2000 shortly after the Mansfield Project went into service.

In September 1997 Mount Holly filed a petition with the BPU to establish a
Purchased Water Adjustment Clause (PWAC) to reflect the cost of water
purchased from the other purveyor under the aforementioned Stipulation
agreement. In May 1998, the BPU adopted a Stipulation signed by the parties
to the PWAC case for an increase in annual revenues under Mount Holly's PWAC
of $1.3 million or 38.9%.
-10-
<PAGE>

Effective January 1, 2000, Mount Holly received an increase in annual rates
of $1.9 million. This increase included costs for Mount Holly's Mansfield
Project that was placed in service at the end of December 1999. The rate
decision also reflected the elimination of the PWAC. After the elimination of
the PWAC the net rate increase was $.5 million. This increase also reflects
additional construction and financing costs, as well as increases in
operating costs, since base rates were last established in January 1996.

Capital Resources
During 1999 Elizabethtown financed 38.2% of its capital expenditures from
internally generated funds (after payment of common stock dividends). The
balance was financed with a combination of  short-term borrowings under lines
of credit and proceeds from capital contributions from E'town (funded by
issuances of Common Stock under the Corporation's Dividend Reinvestment and
Stock Purchase Plan).

For the three-year period ending December 31, 2002, Elizabethtown estimates
that 52% of its currently projected capital expenditures are expected to be
financed with internally generated funds (after payment of common stock
dividends). The balance will be financed with a combination of proceeds from
the sale of E'town common stock or capital contributions from Thames Water
after the pending Merger, long-term debt, proceeds of tax-exempt New Jersey
Economic Development Authority (NJEDA) bonds and short-term borrowings.
Elizabethtown expects to pursue additional tax-exempt financing to the extent
that final allocations are granted by the NJEDA.

In November 1998 Mount Holly closed on loan agreements that will make
available up to $13.2 million in proceeds from the issuance of unsecured
notes through the New Jersey Environmental Infrastructure Trust Financing
Program. This program provides financing through two loans. The first loan,
in the amount of $7.3 million, is through the New Jersey Environmental
Infrastructure Trust (Trust), which issued tax-exempt bonds with average
interest rates of 4.7%. The second loan, in the amount of $5.9 million, is
from the State of New Jersey, acting through the New Jersey Department of
Environmental Protection. The State is participating in the Safe Drinking
Water State Revolving Fund authorized by the Safe Drinking Water Act
amendments of 1996 whereby the federal government is funding the state loan
at no interest cost. The effective interest rate for the combined notes is
approximately 2.6%. The proceeds of the loans will be used to repay
short-term debt incurred to finance a portion of the Mansfield Project. The
Company expects to request these funds from the Trust in the second quarter
of 2000.

Interest Rate Risk
The Company is subject to the risk of fluctuating interest rates in the
normal course of business. The Company manages interest rates through the use
of fixed and, to a lesser extent, variable rate debt. As of December 31,
1999, a hypothetical single percentage point change in interest rates would
result in a $.5 million change in interest costs and earnings before tax
related to short-term and variable rate debt.

RESULTS OF OPERATIONS
Earnings Applicable to Common Stock for 1999  was $20.6 million as compared
to $24.0 million for 1998. The 1999 decrease of $3.4 million in net income is
comprised of (i) a decrease of $.7 million for lost revenues net of expenses
from reduced consumption as a result of New Jersey State-imposed water
restrictions in August for drought conditions, (ii) a decrease of $.4 million
from flooding in September of Elizabethtown's Raritan-Millstone Plant caused
by Tropical Storm Floyd (Floyd) (see Other Matters), (iii) a decrease of $2.5
million from additional operating expenses, primarily labor and benefits and
(iv) a decrease of $1.6  million from higher interest costs and depreciation.
These decreases were partially mitigated by the favorable impact of an
increase of $1.8 million in revenues, net of related expenses for higher
water consumption related to an extended dry period in the spring and early
summer of 1999.
 -11-
<PAGE>

Earnings Applicable to Common Stock for 1998  was $24.0 million as compared
to $20.1 million for 1997. Net income increased by $3.9 million, primarily
comprised of (i) $.6 million due to an extended dry period in the summer of
1998 resulting in higher water consumption than in 1997 (ii) $1.3 million
from lower operating expenses due to a combination of a mild winter in 1998,
more efficient use of our work force, lower employee benefit costs and
success with our ongoing cost control efforts (iii) $.7 million as a result
of new customers and (iv) $.5 million related to refinancing short-term debt
at lower interest rates. Capitalized construction interest accounted for an
increase in net income of $.5 million.

Operating Revenues increased $3.5 million or 2.6% in 1999 over the comparable
1998 amount.Revenues  increased  $4.2 million due to higher water
consumption related to an extended dry period in the spring and early summer
of 1999. This favorable factor was somewhat offset by $1.6 million of lower
water consumption resulting from State-mandated water restrictions in August
and by $1.0 million from flooding in September caused by Floyd. New customers
and the PWAC rate increase for Mount Holly contributed the remaining $1.9
million to the increase in revenues.

Operating Revenues increased $3.1 million or 2.3% in 1998 over the comparable
1997 amount. The increase is primarily comprised of $1.4 million from water
service to residential and wholesale customers attributable to increased
water consumption as a result of warmer, drier weather in the summer of 1998
than in 1997. New customers accounted for $.7 million of the increase. The
PWAC rate increase for Mount Holly accounted for the remainder of the
increase.

Operation Expenses increased $5.0 million or 11.1% in 1999 over 1998. The
increase consists of (i) an increase of $2.7 million in labor, including $.8
million attributable to raises, an increase of $.7 million due to overtime
because of the weather conditions, and an increase of $.3 million due to an
increased number of employees, (ii) an increase of $.7 million for power, of
which $.1 million was attributable to the weather conditions while the
remainder was due to adverse operating conditions resulting from flooding by
Floyd, (iii) an increase of $.6 million in leasing costs as conversion
continues from ownership to leasing of all vehicles, (iv) an increase of $.3
million in purchased water by Mount Holly while the Mansfield Project was
being constructed  and (iv) an increase of $.7 million from various other
operating expenses.

Operation Expenses decreased $.2 million or .4% in 1998  from 1997. The
Company experienced a decrease of $1.0 million from lower operating costs due
to a mild winter, greater work force utilization, ongoing cost control
efforts and decreased employee benefit costs. These decreases were partially
offset by an increased  cost of labor, purchased water for Mount Holly and
variable costs for the higher water sales.

Maintenance Expenses increased $.6 million or 11.4% in 1999 as compared to
1998 primarily due to additional waste residual removal costs.

Maintenance Expenses decreased $.9 million or 13.3% in 1998, as compared to
1997 due to improved procurement procedures and preventative maintenance
programs.

Depreciation Expense increased $.9 million or 7.4% in 1999 and $.2 million or
1.7% in 1998 due to depreciation on utility plant additions in both years.

Revenue Taxes increased $.5 million or 2.9% in 1999 and $.2 million or 1.1%
in 1998 due to the taxes on increases in operating revenues discussed above.

Real Estate, Payroll and Other Taxes increased $.5 million or 19.4% in 1999
primarily due to increased payroll taxes as a result of payrol taxes on
higher labor costs.

Real Estate, Payroll and Other Taxes decreased $.5 million or 14.7% in 1998.
This overall decrease was comprised of additional payroll taxes due to
additional labor costs, which were offset by decreases from lower than
anticipated property taxes on the Canal Road Plant.
-12-
<PAGE>

Federal Income Taxes as a component of operating expenses decreased $1.6
million or 12.3% in 1999 as compared to 1998 and increased $1.7 million or
15.0% in 1998 over 1997 due to changes in the components of taxable operating
income discussed herein.

Other Income (Expense) increased $.1 million or 8.5% in 1999 compared to
1998.

Other Income (Expense) increased $.3 million or 70.5% in 1998 over 1997 due
to a $.4 million increase in Allowance for Funds Used During Construction
(AFUDC), primarily for Elizabethtown's western operations center. Federal
income taxes increased $.1 million for the taxes on the AFUDC.

Total Interest Charges increased $.9 million or 5.7% in 1999. The increase
consists of $.4 million for Mount Holly's issuance of long-term notes in
November 1998 through the New Jersey Environmental Infrastructure Trust
Financing Program to finance a portion of the construction of its Mansfield
Project and $.5 million for increased short-term borrowings to finance
Elizabethtown's construction program.

Total Interest Charges decreased $1.0 million or 6.1% in 1998 due primarily
to refinancing short-term debt at lower interest rates. In addition, the debt
component of AFUDC increased $.3 million, resulting in lower interest
expense, as a result of higher construction expenditures, primarily for
Elizabethtown's new western operations center.

OTHER MATTERS
In August 1999 the Governor of the State of New Jersey declared a "Water
Emergency" for the entire state and issued mandatory restrictions on outdoor,
nonessential water use. Due to unusually low levels of rainfall during June and
July the Governor deemed these measures necessary to preserve the integrity of
several of the states reservoir and well supplies. Customers of Elizabethtown
and Mount Holly were subject to these restrictions. The water systems operated
by E'town's subsidiaries had and continue to have adequate supplies of water to
meet the needs of their customers. These restrictions affected the amount of
water consumed by a substantial number of the Corporation's customers and
reduced net income in 1999 by approximately $.68 million. The restrictions were
lifted in October 1999.

In September 1999 Elizabethtown took its primary water treatment plant, the
Raritan-Millstone Water Treatment Plant, out of service as a result of
flooding from Floyd. For several days, Elizabethtown had difficulty
maintaining adequate water pressure in portions of its distribution system as
the Canal Road Plant, Elizabethtown's secondary water treatment plant, was
supplying the predominant portion of the water needs of Elizabethtown's
customers. Overall system production levels were substantially less than
normal. Customers in portions of a few municipalities were without water
service for a period of approximately 3 days. Costs incurred to repair and
replace equipment damaged by the flood and to respond to inquiries by
customers, regulatory bodies and the media are being deferred and are
expected to be recoverable through insurance. The loss of revenues
due to below normal water consumption is not recoverable through insurance
and adversely affected net income by approximately $.39 million for 1999.

ECONOMIC OUTLOOK
Forward Looking Information
Information in this report includes certain forward looking statements within
the meaning of the federal securities laws. Any forward looking statements are
based upon information currently available and are subject to future events,
risks and uncertainties that could cause actual results to differ materially
from those expressed in the statements. Such events, risks and uncertainties
include, without limitation, actions of regulators, the effects of weather on
water consumption, changes in historical patterns of water consumption and
demand, including changes through increased use of water-conserving devices,
conditions in capital markets, increases in operating expenses due to factors
beyond the Company's control, the closing of the pending merger with Thames
Water, changes in environmental regulation and associated costs of compliance
and other claims or assessments made upon the Company.
-13-
<PAGE>
Elizabethtown
In accordance with the terms of the pending Merger Agreement, Elizabethtown
will postpone filing for rate relief needed to recover additional construction
and financing costs incurred since base rates were last established in October
1996 until at least August 2000. Therefore, earnings from Elizabethtown will be
substantially lower in 2000 than in 1999 due to an assumed return to normal
weather conditions and postponement of the rate filing.

Mount Holly
Mount Holly had a negative rate of return on common equity of 2.6% in 1999,
compared to an authorized rate of return of 11.25%, established in its 1996
base rate case. Mount Holly earned significantly below its authorized return
in 1999 and 1998 as the Company was precluded from filing for needed rate
relief due to recently settled litigation with another purveyor. Management
expects Mount Holly to contribute positively to Elizabethtown's net income as
a result of a Stipulation Agreement approved by the BPU whereby a rate
increase of $1.9 million, or a net increase of $.5 million after elimination
of the PWAC, was effective January 1, 2000.

New Accounting Pronouncements
See Note 3 of Elizabethtown's Notes to Consolidated Financial Statements for
a discussion of new accounting standards that were effective in 1999.

Year 2000
State of Readiness
The Company assessed its significant business systems, as well as
non-critical, peripheral support systems for compliance with the Year 2000
computer challenge. The assessment concluded that all significant business
systems (i.e. customer billing and service, financial, water treatment
operating and control, water quality laboratory information and telemetric
data acquisition systems) are Year 2000 compliant. The assessment also
included inquiries as to the state of readiness of significant vendors whose
services to the Company could have an impact on the Company's ability to
deliver service to its customers. Management concluded that the delivery of
electric power as well as chemicals used in the water treatment process are
two areas of significant importance and received documentation from the
vendors who provide these services that indicates their ability to provide
service. The assessment had identified certain modifications to peripheral
support systems that have since been implemented.

The Costs To Address The Corporation's Year 2000 Issues
The significant business systems of the Company defined above are Year 2000
compliant and have been operational for up to several years. Therefore, no
further costs are expected to be incurred in connection with bringing these
systems into compliance. The peripheral support systems required the Company
to incur costs of approximately $.4 million to bring them into compliance.

At the turn of the century and to-date, the Company experienced no disruption
in the services it provides to its customers and processed transactions in
its financial, customer billing and customer services systems in the normal
course of business. Management is not currently aware of any Year
2000-related problems associated with its internal business systems or
software or with the systems or software of its vendors.

Item 8. Financial Statements and Supplementary Data

The information for E'town is included in Exhibit 13, filed herewith, and is
incorporated herein by reference.

The information for Elizabethtown Water Company is contained in Appendix I
hereto, incorporated by reference herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

                               None
-14-
<PAGE>

                                   PART III
Item 10.  Directors and Executive Officers of the Registrant


                           Director    Term
       Name            Age  Since     Expires  Position
-------------------------------------------------------------------------------
Gail P. Brady           54   N/A        N/A    Treasurer; Senior Vice President,
                                               Chief Financial Officer and
                                               Treasurer of Elizabethtown
Walter M. Braswell      50   N/A        N/A    Secretary; Vice President,
                                               General Counsel and Secretary of
                                               Elizabethtown
Thomas J. Cawley        69   1992       2002   Director
Andrew M. Chapman       44   1995       2001   Director,President; President,
                                               Elizabethtown
Anthony S. Cicatiello   52   1996       2002   Director
Edward A. Clerico       45   See Note Below    Director; President, Applied
                                               Water Management, Inc.
Dennis W. Doll          41   N/A        N/A    Controller; Vice President and
                                               Controller of Elizabethtown
Anne Evans Estabrook    55   1982       2001   Director, Chairman of the Board,
                                               E'town Corporation and
                                               Elizabethtown
James W. Hughes         56   1997       2000   Director
John Kean               70   1957       2002   Director
Robert W. Kean, III     52   1989       2001   Director, Vice President
Barry T. Parker         67   1983       2001   Director
Hugo M. Pfaltz          68   1980       2000   Director
Chester A. Ring, 3rd    72   1982       2002   Director
Joan Verplanck          53   1997       2000   Director
Norbert Wagner          64   N/A        N/A    Senior Vice President-Operations
                                               of Elizabethtown

Family Relationships. Robert W. Kean, Jr., (Director Emeritus) is
a cousin of John Kean, Director and father of Robert W. Kean,
III, Director.

Gail P. Brady has been Treasurer of the Corporation since 1997,
Senior Vice President, Chief Financial Officer and Treasurer of
Elizabethtown since 1998 and Vice President-Finance, Regulatory
Affairs and Treasurer of Elizabethtown since 1994.  She is a
trustee of Ramapo College.  She has been with Elizabethtown since
1971.

Thomas J. Cawley was Vice Chairman of Elizabethtown until his
retirement in December 1996. From August 1992 to January 1996 he
served as President of Elizabethtown. He joined Elizabethtown in
1969 and served in a variety of operating positions until elected
President in 1992.

Andrew M. Chapman has been President of the Corporation since May 1997,
Chief Financial Officer of the Corporation from August
1989 until May 1997 and Treasurer of the Corporation from
November 1990 until May 1997. He has been President of
Elizabethtown since January 1996, Executive Vice
President of Elizabethtown from May 1994 to December 1995, Senior
Vice President of Elizabethtown from April 1993 to May 1994,
Chief Financial Officer of Elizabethtown from November 1990 to
December 1995, and Treasurer of Elizabethtown from August 1989 to
May 1994. He is a member of the Regional Advisory Board of PNC
Bank, N.A., New Jersey and is a member of the Board of Directors
of the Damon G.Douglas Company, a general construction company.
-15-
<PAGE>

Anthony S. Cicatiello is the Chairman of CN Communications
International, Inc., a public relations and advertising firm, a
firm he founded in 1977.

Edward A. Clerico was appointed Director of the Corporation in
August 1998.  He was not nominated for election as Director in
May 1999.  In July 1999 he was reappointed as Director of the
Corporation and will remain as such until the next election of
Directors.  He is President of Applied Wastewater Management,
Inc. and was the owner and founder since 1984 .  The Applied
Group of companies was purchased by E'town in June 1998.

Dennis W. Doll has been Controller of the Corporation since 1997,
Vice President and Controller of Elizabethtown since 1998 and
Controller of Elizabethtown since 1994.  He joined the company in
1985.

Anne Evans Estabrook has been the owner of Elberon Development
Co. (a real estate holding company) since 1984 and is President
of David O. Evans, Inc. (a construction management company). She
is a Director of Summit Bancorp and its subsidiary, Summit Bank.
She is a Public Member of the Governing Board, New Jersey
Economic Development Authority. She is a Trustee Emeritus of Cornell
University.

James W. Hughes  has been Dean of the Edward J. Bloustein School
of Planning and Public Policy at Rutgers University. He has been
the Director of the Rutgers Regional Report since 1988, and has
been a member of the Rutgers University Faculty since 1971.

John Kean is Chairman of the Board and a Director of NUI
Corporation. He was President and Chief Executive Officer of NUI
Corporation until his retirement in April 1995, and until October
1994, Chairman of the Board and Director of Elizabethtown Gas
Company, which was previously a subsidiary of NUI Corporation. He
is also an Honorary President of the International Gas Union.

Robert W. Kean, III has been Vice President of the Corporation since 1997 and
Executive Vice President of Properties since July 1987.

Barry T. Parker is of counsel to the law firm of Parker, McCay &
Criscuolo, P.C. since December 1997, where he had been a partner
since 1967.

Hugo M. Pfaltz has been a principal of the law firm of Pfaltz &
Woller, P.A. since 1976.

Chester A. Ring, 3rd,  was President of Elizabethtown until his
retirement in August 1992.  He served as President of
Elizabethtown since June 1987.

Joan Verplanck  has been President of the New Jersey Chamber of
Commerce since 1994.  Prior to that she served as President of
the Morris County Chamber of Commerce.


Norbert Wagner has been Senior Vice President-Operations of
Elizabethtown since 1992 and has been with Elizabethtown since
1963.

The Directors of E'town also serve as Directors of Elizabethtown.

      Section 16(a) Beneficial Ownership Reporting Compliance. None.
-16-
<PAGE>

Item 11. Executive Compensation

                    Summary Compensation Table

      The following table provides certain summary information
concerning the compensation for the past three years of the
Chairman of the Board and each of the other four most highly
compensated executive officers of the Corporation (the "named
executive officers").
<TABLE>
<CAPTION>

                                                            Annual Compensation              Long-Term
                                                                                        Compensation Awards

                                           Fiscal      Salary      Bonus   Other Annual Restricted  Securities       All Other
             Name & Principal Position      Year        ($)         ($)    Compensation   Stock     Underlying     Compensation
                                                     (1) & (2)                          Awards (3)   Options
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>        <C>               <C>     <C>        <C>        <C>     <C>
Anne Evans Estabrook
Chairman of the Board,                      1999        $141,727   $ 7,500            0          $0     20,000     $10,354 (4)(5)(6)
E'town Corporation and                      1998         114,612         0            0      30,000                  8,982 (4)(5)(6)
Elizabethtown Water Company                 1997          75,612         0            0      24,999     25,000      12,430 (4)(5)(6)

Andrew M. Chapman                           1999        $240,323   $95,000           $0          $0     20,000     $11,544 (4)(5)(6)
President, E'town Corporation and           1998         210,996         0            0      73,171                 10,944 (4)(5)(6)
Elizabethtown Water Company                 1997         196,054         0            0      20,953                 10,176 (4)(5)(6)

Edward A. Clerico (7)                       1999        $177,989        $0           $0          $0                $ 8,825 (4)(5)(6)
President, Applied Water Management, Inc.   1998         141,522         0            0           0                  6,613 (4)(5)(6)

Norbert Wagner                              1999        $157,458   $24,300           $0          $0                $ 6,872   (4)(5)
Senior Vice President,                      1998         145,024    10,350            0      10,334                  6,329   (4)(5)
Elizabethtown Water Company                 1997         135,774         0            0       8,997                  5,794   (4)(5)

Gail P. Brady
Treasurer, E'town Corporation
Senior Vice President, Chief Financial      1999        $135,658   $26,700           $0          $0                $ 5,844   (4)(5)
Officer and Treasurer,                      1998         129,443     8,800            0       8,779                  5,854   (4)(5)
Elizabethtown Water Company                 1997         120,239         0            0       5,978                  5,452   (4)(5)


(1)  All salaries are paid by Elizabethtown, the Corporation's principal subsidiary, except for Edward A. Clerico.  Salaries are
     reallocated to the Corporation as appropriate.  Edward A. Clerico is paid by Applied Water Management, Inc.

(2)  Includes pretax contributions to the 401(k) Plan.

(3)  Represents the value as of grant date of restricted stock awards granted in 1998 and 1997, respectively, under the E'town
     Corporation 1990 Performance Stock Program.  The number of shares of restricted stock awarded to executive officers during
     1998 and 1997 and the value of such restricted stock based on the closing price of Common Stock, of $47.375 and $40.19,
     respectively, as reported on the New York Stock Exchange on December 31, 1998 and 1997 is as follows:  A.E. Estabrook
     868 shares, $41,122 and 823 shares, $33,076; A.M. Chapman 2,025 shares, $95,934 and 687 shares, $27,611; N. Wagner
     299 shares, $14,165 and 295 shares, $11,856 and G.P. Brady 254 shares, $12,033 and 196 shares, $7,877.

(4)  Includes 401(k) Plan matching contributions by Elizabethtown for 1999, 1998 and 1997, respectively, as follows:
     A.E. Estabrook $4,810, $3,738, $2,952; A.M. Chapman $6,000, $6,000, $5,700; E.A. Clerico $5,000, $5,000 (for 1999 and
     1998-contribution made by AWM); N. Wagner $5,663, $5,215, $4,882 and G.P. Brady $4,500, $4,510, $4,276.

(5)  Includes premiums for life insurance by Elizabethtown for 1999, 1998 and 1997, respectively, as follows:  A.E. Estabrook
     $1,344, $1,344, $828; A.M. Chapman $1,344, $1,344, $1,176; E.A. Clerico $225, $113 (for 1999 and 1998-paid
     by AWM); N. Wagner $1,209, $1,114, $912 and G.P. Brady $1,344, $1,344, $1,176.

(6)  Includes Director's fees for 1999, 1998 and 1997, respectively, as follows: A.E. Estabrook $4,200, $3,900, $8,650;
     A.M. Chapman $4,200, $3,600, $3,300 and E.A. Clerico $3,600, $1,500 (for 1999 and 1998).

(7)  The Applied Group, of which E.A. Clerico was the founder and majority owner, was purchased by E'town Corporation on
      June 12, 1998.  The information in the summary compensation table has been provided for the entire year 1998.
-17-
</TABLE>
<PAGE>
                Option/SAR Grants in Last Fiscal Year

      The following table provides information regarding
individual grants of stock options and stock appreciation  rights
made during 1999 to the persons named in the Summary Compensation
Table, above.
<TABLE>
<CAPTION>

                                                                                                            Potential
                             Individual Grants                                                         Realizable Value at
                               Number of                                                                  Assumed Annual
                                 Shares        % of Total                                              Rates of Stock Price
                               Underlying     Options/SARs       Exercise                                 Appreciation for
                                Options/       Granted to        or Base                                  Option Term (2)
                                  SARs        Employees in        Price         Expiration
            Name              Granted (1)      Fiscal Year        ($/Sh)           Date                5%               10%
-----------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>               <C>            <C>             <C>              <C>               <C>

  Anne Evans Estabrook           20,000            50%            $44.00          04/15/09         $1,364,880        $2,075,040

  Andrew M. Chapman              20,000            50%            $44.00          04/15/09         $1,364,880        $2,075,040

  Edward A. Clerico                --              --               --              --                 --                --

  Norbert Wagner                   --              --               --              --                 --                --

  Gail P. Brady                    --              --               --              --                 --                --



(1)    The options granted in 1999 are exercisable as of April 15, 2000.  To date, no Stock Appreciation Rights were granted
       under the 1987 Stock Option Plans, which expired in 1997.
(2)    These values are not predictions of what the Corporation believes the market value of its Common Stock will be in
       the next 10 years.  They are merely assumed values required to be calculated in accordance with SEC rules.
</TABLE>


      Aggregated Option/SAR Exercises in Last Fiscal Year and
                    Year-End Option/SAR Values

The following table provides information regarding the pre-tax value realized
from the exercise of options and stock appreciation rights during 1999 and the
value of unexercised in-the-money options and stock appreciation rights held at
December 31, 1999 by the persons named in the Summary Compensation Table, above.

<TABLE>
<CAPTION>
                                                                                 Value of All
                                                    Number of                     Outstanding
                       Shares                     All Outstanding                 In-the-Money
                      Acquired   Aggregate       Options/SARs at                 Options/SARs at
                         On        Value             12/31/99                       12/31/99
                      Exercise    Realized     Exercisable/Unexercisable     Exercisable/Unexercisable
                         #          ($)                (1)                           (1) (2)
 -----------------------------------------------------------------------------------------------------
<S>                    <C>        <C>             <C>                           <C>
Anne Evans Estabrook   32,500     $947,188             0/20,000                       $0/$365,000

Andrew M. Chapman       2,200     $ 54,274        19,500/20,000                 $688,350/$365,000

Edward A. Clerico        --           --                 --                             --

Norbert Wagner           --           --           8,000/0                      $281,000/0

Gail P. Brady           1,000     $ 27,125               --                             --

</TABLE>

(1) No Stock Appreciation Rights were granted under the 1987 Stock Option Plan,
which expired in 1997.

(2) Based on the price of $62.25 per share, the closing price of the Common
Stock on the New York Stock Exchange, Inc. on December 31, 1999.
-18-
<PAGE>

Pensions

      The following table shows, for the salary levels and years
of service indicated, the annual pension benefits payable to
employees, including officers, upon retirement at age 65,  under
Elizabethtown's non-contributory defined benefit retirement
plan.  The compensation taken into account under a tax-qualified
plan is subject to a maximum annual limit under the Internal
Revenue Code of 1986, as amended, adjusted annually for cost of
living increases ($160,000 in 1997, 1998 and 1999, and  $170,000
in 2000).

  Highest
Consecutive
 Four Year
  Average
Compensation      Annual Benefits for Years of Service Indicated
--------------------------------------------------------------------------------
             10      15       20       25       30       35       40       45
            years   years    years    years    years    years    years    years
--------------------------------------------------------------------------------
$ 75,000  $12,000  $18,000  $24,000  $30,000  $36,000  $42,000  $48,000  $54,000
 100,000   16,000   24,000   32,000   40,000   48,000   56,000   64,000   72,000
 125,000   20,000   30,000   40,000   50,000   60,000   70,000   80,000   90,000
 150,000   24,000   36,000   48,000   60,000   72,000   84,000   96,000  108,000
 175,000   28,000   42,000   56,000   70,000   84,000   98,000  112,000  126,000
 200,000   32,000   48,000   64,000   80,000   96,000  112,000  128,000  144,000
 225,000   36,000   54,000   72,000   90,000  108,000  126,000  144,000  162,000
 250,000   40,000   60,000   80,000  100,000  120,000  140,000  160,000  180,000


Elizabethtown's non-contributory defined benefit retirement plan provides that a
participant will receive an annual retirement benefit equal in amount to 1.6% of
the participant's final average compensation for the highest four consecutive
calendar years multiplied by the number of years of credited service (up to a
maximum of 45). Remuneration covered under the retirement plan includes base
wages only. Compensation covered by the plan for Anne Evans Estabrook, Andrew M.
Chapman, Norbert Wagner and Gail P. Brady, are approximately equal to the
amounts set forth under the caption "Salary" in the Summary Compensation Table
above. Edward A. Clerico does not participate in this plan and neither do
Directors who are not also officers or employees of the Corporation.

The annual benefit amounts shown above are not subject to any deduction for
Social Security benefits or other offset amounts. The number of years of service
now credited under the retirement plan (and the supplemental plans described
below) are as indicated for the following officers: Anne Evans Estabrook,
12 years; Andrew M. Chapman, 10 years; Norbert Wagner, 36 years and Gail P.
Brady, 28 years.

The named executive officers, with the exception of Anne Evans Estabrook
and Edward A. Clerico, are entitled to either a Supplemental Executive
Retirement Plan ("SERP") benefit upon the attainment of the normal retirement
age of 65, or a 1995 ("1995 SERP") benefit upon the attainment of the age of 62
with a minimum of 20 years service. The benefit payable under each of these
plans is an amount equal to the difference between 60% for retirement at age 65
or 55% for retirement at age 62 of the average of annual base salary and
incentive compensation payments as shown in the Salary, Bonus and Restricted
Stock Awards Columns in the Summary Compensation Table above plus other taxable
amounts for the thirty-six months prior to retirement. The SERP provides that in
the event of termination due to a change in control, a participant is credited
with an additional 10 years of service for purposes of qualifying for the 1995
SERP. The 1995 SERP also provides life insurance equal to two times compensation
if death occurs before age 55.

The estimated annual benefits payable upon retirement at age 65 for each named
executive officer entitled to SERP or 1995 SERP benefits are as follows: Andrew
M. Chapman $148,387; Norbert Wagner $17,855, and Gail P. Brady $32,824.
-19-
<PAGE>
Compensation of Directors
(1)  Standard Arrangements

Directors' Fees. Directors of the Corporation who are not officers of the
Corporation are paid by Elizabethtown an annual retainer of $15,000 which is
paid in the form of E'town Corporation common stock, and a fee of $600 for each
meeting of the Board of Directors of Elizabethtown which they attend. Such
Directors also receive the per-meeting attendance fee for each meeting of the
Board of the Corporation held on a day when there is not also a meeting of the
Board of Elizabethtown. Properties Directors receive a $1,000 annual retainer
and a fee of $600 for a Board Meeting held on days not coincident with Board
meetings of Elizabethtown. Directors who are officers of the Corporation are
paid a fee of $300 for each Board meeting of Elizabethtown they attend.

Members of committees who are not officers of the Corporation are paid a fee of
$400 for participation at committee meetings on the same day as board meetings
and a fee of $600 for committee meetings held on days other than board meetings.
No fees are paid to members of the Executive Management Committee for attendance
at meetings of that committee.

A Director cannot stand for re-election after his or her 72nd birthday. A
retired Director with 10 or more years' service on the Board of Directors (of
the Corporation or Elizabethtown) becomes eligible at age 72 to receive a
pension for life equal to the annual retainer in effect at the date the Director
becomes eligible for the pension. A retired Director with 5 to 9 years of
service will receive a pension equal to the annual retainer in effect at the
date the Director becomes eligible to receive the pension, payable for the same
number of years that the Director served on the Board.

(2) Other Arrangements

Effective May 1997, Robert W. Kean, Jr. was appointed Chairman of the Board -
Emeritus and Director Emeritus and Brendan T. Byrne and Henry S. Patterson, II
were appointed Directors Emeriti. For the two year period after their
appointment, which expired in May 1999, Directors Emeriti received the
per-meeting Directors' fee of $600 for each Board meeting which they attended.

The Corporation and Elizabethtown have consulting agreements with Robert W.
Kean, Jr. whereby he serves as Chairman Emeritus of the Boards of both companies
and Chairman of the Executive Management Committee as described above, and
renders such other consulting services as the Chairman may reasonably request.
Robert W. Kean, Jr. was paid $75,000 in consulting fees in 1999 in addition to
his pension. The Corporation also provided Mr. Kean with the use of an
automobile for 1999, with a taxable value of $13,750 to Mr. Kean in that year.

Employment Agreements

E'town and Elizabethtown have each entered into an employment agreement
with Anne Evans Estabrook effective May 15, 1997. The agreements continue
until the earliest of (i) mutual agreement of termination, (ii)
resignation, and (iii) any date on which Mrs. Estabrook no longer stands
for re-election as a Director. In addition, the respective companies may
terminate Mrs. Estabrook's employment for reasons of disability or cause
(each as defined in the agreements).

E'town has entered into an employment agreement with Andrew M. Chapman, its
current President and the President of Elizabethtown. Upon the consummation
of the merger contemplated by the Merger Agreement dated as of November 21,
1999 among the Corporation, Thames Water Plc ("Thames") and Edward
Acquisition Corp., as described on Form 8-K dated November 21, 1999, this
new employment agreement with Mr. Chapman will become effective and will
replace Mr. Chapman's existing change in control agreement with E'town,
described below.
-20-
<PAGE>
Under the terms of the new employment agreement, Mr. Chapman will be
employed as President and Chief Executive Officer of both E'town and
Elizabethtown after the merger on terms that include the following: (i)
term of at least three years with subsequent automatic one-year renewals;
(ii) a seat on the boards of E'town, Thames Water North America, Inc. and
Elizabethtown, and, if Thames establishes a board of directors for its
businesses in the Americas, a seat on that board; (iii) initial annual base
salary of $270,000; (iv) annual bonus consisting of: (x) a
performance-related bonus equal to at least 10% of Mr. Chapman's salary;
(y) a bonus equal to 12 1/2% of Mr. Chapman's salary for each net increase
of 7,500 customer metered connections to E'town's base customer level in
the prior year; and (z) annual grant of restricted shares of the stock of
Thames having a value of up to 20% of Mr. Chapman's salary with each grant
vesting over a four-year period upon the attainment of certain performance
goals; (v) special retention bonus, payable at the commencement of the
employment agreement, equal to 20% of Mr. Chapman's salary; entitlement to
participate in all benefit plans made available for senior executive
officers; insurance and indemnification by E'town against expenses and
liabilities incurred by Mr. Chapman; and certain non-competition and
confidentiality provisions.

The agreement also provides that Mr. Chapman will receive continued salary
and benefits for a period of 24 months if he voluntarily terminates his
employment within a six-month period commencing on the earlier of (i) the
date the first rate order is received by Elizabethtown from the New Jersey
Board of Public Utilities after the merger, and (ii) the date that is 18
months after the merger. Upon termination of employment by Mr. Chapman for
good reason (as defined in the agreement) or E'town terminates his
employment other than for death, disability or cause (as defined in the
agreement), Mr. Chapman will receive salary, incentive compensation and
benefits for a period of 30 months; unvested restricted stock and stock
options will immediately vest and all restrictions on any restricted stock
or stock options held by him will be voided; and all retirement benefits
under the SERP will fully vest if he has not attained age 65, he will be
granted an additional 15 years of service for purposes of benefit accrual,
and he will become entitled to make an early payout election under the SERP
if he has completed 25 years of service.

If the amounts payable by E'town to Mr. Chapman under the agreement are
subject to the excise tax applicable to "parachute payments" under Sections
280G and 4999 of the Internal Revenue Code, E'town will pay Mr. Chapman an
additional amount so that, after payment of such excise tax, he receives a
sum equal to the original pre-tax severance payment.

Change in Control Agreements

E'town has entered into a Change in Control Agreement with each of the
named executive officers (other than Edward A. Clerico) to ensure
continuity in the management of E'town's operations in the event of a
change in control (as defined in the agreements). The agreements provide
that the named officers are entitled to a severance payment if their
employment is terminated: (i) within three years of a change in control for
a reason other than death, cause, or, in the case of all named officers
other than Andrew M. Chapman, disability; (ii) in the case of Andrew M.
Chapman only, voluntarily by Mr. Chapman within one year of a change in
control; or (iii) within three years of a change in control following a
material change in job duties, significant increase in travel, diminution
in status, position or responsibilities, reduction in compensation and
benefits or certain job relocations.

If his or her employment is terminated under those circumstances, the named
officer's severance includes: continued salary, incentive compensation and
benefits for a period of 18 to 30 months; payment on the date of
termination of an amount equal to the greater of (i) all incentive
compensation due prior to the change in control but not yet paid and (ii)
all incentive compensation due prior to termination of employment and not
yet paid or, in the case of Andrew M. Chapman and Anne Evans Estabrook, the
sum of such incentive compensation amounts; immediate vesting of any
unvested restricted stock and stock options and the voiding of all
restrictions on any restricted stock or stock options held by them; and,
with respect to the SERP (other than for Anne Evans Estabrook), full and
immediate vesting of all retirement benefits, for any officer younger than
65, the grant of an additional 10 to 15 years of service for purposes of
benefit accrual, and early payout elections in certain circumstances. With
respect to the named officers other than Andrew M. Chapman and Anne Evans
Estabrook, the officers are required to mitigate the amounts they would
receive under these agreements by seeking other employment.

With respect to Andrew M. Chapman and Anne Evans Estabrook, if the amounts
payable by E'town will be subject to the excise tax applicable to
"parachute payments" under the federal tax laws, E'town will pay the named
officer an additional amount so that, after payment of such excise tax, he
or she receives a sum equal to the original pre-tax severance payment. For
all other named officers, the amounts payable to them will be reduced, if
desired by the officer, to avoid such excise tax.

 Compensation Committee Interlocks and Insider Participation.  None.
-21-
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following information pertains to the common stock of the Corporation
that, to the knowledge of the Corporation, is beneficially owned, directly
or indirectly, individually and as a group, by all Directors and Executive
Officers of the Corporation and its subsidiaries, Elizabethtown Water
Company ("Elizabethtown") and E'town Properties, Inc. ("Properties"), as of
March 24, 2000. No shareholder has reported beneficial ownership of 5% or
more of the outstanding common stock.


Title of     Name of Beneficial Owner             No. of   Percent of
Class                                           Shares (1)   Class
---------------------------------------------------------------------
Common Stock Gail P. Brady ...................     6,123        0.07
             Thomas J. Cawley ................    11,787        0.13
             Andrew M. Chapman ...............    41,977 (2)    0.48
             Anthony S. Cicatiello ...........     1,640        0.02
             Edward A. Clerico ...............   112,388        1.28
             Anne Evans Estabrook ............   101,963 (3)    1.16
             James W. Hughes .................     1,790        0.02
             John Kean .......................   189,988 (4)    2.17
             Robert W. Kean, Jr. .............   217,148 (5)    2.48
             Robert W. Kean, III .............     1,389        0.02
             Barry T. Parker .................     3,734        0.04
             Hugo M. Pfaltz ..................    10,458 (6)    0.12
             Chester A. Ring, 3rd ............    18,552        0.21
             Joan Verplanck ..................     1,456        0.02
             Norbert Wagner ..................    22,298 (7)    0.25
             Directors and Officers as a group   785,675        8.96


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

(1)  Includes  shares  held  under  the  Elizabethtown  Savings  and  Investment
     Plan-401  (k) (the  "401(k)Plan")  for the  Executive  Officers  and  those
     directors who retired as Executive Officers.

(2)  Includes 32,000 shares subject to options which were granted to Andrew
     M. Chapman, of which 20,000 are not presently exercisable, under the
     Corporation's 1987 and 1997 Stock Option Plan.

(3)  Includes  20,000 shares subject to options which were granted to Anne Evans
     Estabrook, and are not presently exercisable, under the Corporation's 1997
     Stock Option Plan.

(4)  Includes  119,532  shares  held  under two  trusts for which John Kean is a
     co-trustee and John Kean shares voting and investment power with respect to
     these shares.

(5)  Mr. Kean is not a voting member of the board of directors.  Figure includes
     197,567  shares  held  under a trust for which  Robert  W.  Kean,  Jr. is a
     co-trustee and Robert W. Kean, Jr. shares voting and investment  power with
     respect to these shares.

(6)  Includes  1,250  shares  of  Common  Stock  issuable  upon   conversion  of
     debentures  held by a  partnership  of which  Hugo M.  Pfaltz  is a general
     partner.

(7)  Includes  8,000  shares  subject to options  which were  granted to Norbert
     Wagner and are presently  exercisable  under the  Corporation's  1987 Stock
     Option Plan.
-22-
<PAGE>

Item 13.  Certain Relationships and Related Transactions

Certain  Transactions.

Utility Billing Services, Inc., a subsidiary of NUI
Corporation, of which John Kean is Chairman of the Board and a Director,
provides data processing and related services to Elizabethtown and other
subsidiaries of the Corporation. Certain of these services rendered to
Elizabethtown are pursuant to a contract which expires December 31, 2000.
The charges for all services totaled $1,044,732 for the year ended December
31, 1999.

Elizabethtown had a line of credit with Summit Bank, of which Anne Evans
Estabrook is a Director, in the amount of $10 million. At December 31,
1999, E'town had $7 million in outstanding loans from Summit Bank. Interest
charges paid to Summit Bank totaled $298,611 during 1999. Summit Bank also
serves as bond trustee for Elizabethtown for which it was paid fees of
$22,000 in 1999.

Elizabethtown has a line of credit with PNC Bank, N.A., New Jersey in the
amount of $30 million. Andrew M. Chapman serves on the Regional Advisory
Board of this bank. At December 31, 1999, there were $30 million in
outstanding loans from PNC Bank. Interest charges paid to PNC Bank totaled
$1,351,868 during 1999. PNC Bank also serves as trustee and recordkeeper
for Elizabethtown's benefit plans for which it was paid fees of $68,515 in
1999.

The law firm of Parker, McCay & Criscuolo, P.C., of which Barry T. Parker
was a partner and is now of counsel, provided legal services to the
Corporation and its subsidiaries which resulted in $35,131 in legal fees
being paid to the firm in 1999.

The law firm of Lindabury, McCormick & Estabrook, of which the husband of
Anne Evans Estabrook is of counsel, provided legal services to the
Corporation and its subsidiaries that resulted in $17,617 in legal fees
being paid to the firm in 1999.

Edward A. Clerico owns land and buildings leased by a subsidiary of E'town.
Mr. Clerico received total payments in 1999 of $216,530 under this lease.

It is the opinion of management that the amounts charged for these services
were as favorable as those that would be charged for such services by
comparable unaffiliated sources. Management periodically reviews the terms
of these arrangements to ensure that the costs for these services are
comparable to those that would be charged in the general market.

                             PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

The following documents are filed as part of this report:

     1. Financial Statements:
                          Elizabethtown Water Company

      Statements of Consolidated Income for the years ended December 31, 1999,
      1998 and 1997.

      Consolidated Balance Sheets as of December 31, 1999 and 1998.

      Statements of Consolidated Capitalization as of December 31, 1999 and
      1998.

      Statement of Consolidated Shareholder's Equity for the years ended
      December 31, 1999, 1998 and 1997.

      Statements of Consolidated Cash Flows for the years ended December 31,
      1999, 1998 and 1997.

      Notes to Consolidated Financial Statements.
-23-
<PAGE>

                              E'town Corporation

A portion of the 1999 Annual Report to Shareholders which includes
Management's Discussion and Analysis of Consolidated Financial Condition and
Results of Operations, Consolidated Financial Statements, Notes to
Consolidated Financial Statements, Independent Auditors' Report and Other
Financial and Statistical Data is filed herewith as Exhibit 13 and is herein
incorporated by reference.

                            Elizabethtown Water Company

The Independent Auditors' Report and Elizabethtown Water Company's
consolidated financial statements and notes thereto are contained in Appendix
I hereto, incorporated by reference herein.

     2.  Financial Statement Schedules:

                             E'town Corporation
                          Elizabethtown Water Company

Schedule II - Valuation and Qualifying Accounts for the Years Ended December
31, 1999, 1998 and 1997.

Other schedules are omitted because of the absence of  the conditions under
which they are required or because the required information is included in
the financial statements or the notes accompanying each Company's financial
statements.

     3. Exhibits

      (a) Exhibits for E'town and Elizabethtown Water Company are listed
          in the Exhibit Index, which is incorporated by reference herein.

      (b) Reports on Form 8-K:

          (1) A report on Form 8-K was filed on November 24, 1999 . The
              report included an Agreement of Merger dated November 21, 1999
              among E'town Corporation, Thames Water Plc and Edward
              Acquisition Corp.

          (2) A report on Form 8-K was filed on December 17, 1999. The
              report included an amendment dated November 21, 1999 to the
              Rights Agreement dated as of February 4, 1991 between E'town
              Corporation and The Bank of New York as Rights Agent.


-24-
<PAGE>

                                  SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.


                                                 E'TOWN CORPORATION
  March 30, 2000
                                          By:   /s/ Anne Evans Estabrook
                                                Chairman and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 30, 2000.

  Chairman and Director                         /s/ Anne Evans Estabrook


  President and Director                        /s/ Andrew M Chapman


  Director                                      /s/ Thomas J. Cawley


  Director                                      /s/ Anthony S. Cicatiello


  Director                                      /s/ James W. Hughes


  Director                                      /s/ John Kean


  Director                                      /s/ Barry T. Parker


  Director                                      /s/ Hugo M. Pfaltz, Jr.


  Director                                      /s/ Chester A. Ring III


  Director                                      /s/ Joan Verplanck


  Director                                      /s/ Robert W. Kean III


  Director                                      /s/ Edward A. Clerico


  Treasurer                                     /s/ Gail P. Brady
  (Principal Financial Officer)

  Controller                                    /s/ Dennis W. Doll
  (Principal Accounting Officer)

-25-
<PAGE>

                          SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.


                                               ELIZABETHTOWN WATER COMPANY
March 30, 2000
                                          By:   /s/ Anne Evans Estabrook
                                                Chairman and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 30, 2000.

   Chairman and Director                        /s/ Anne Evans Estabrook


   President and Director                       /s/ Andrew M. Chapman

   Director                                     /s/ Thomas J. Cawley


   Director                                     /s/ Anthony S. Cicatiello


   Director                                     /s/ James W. Hughes


   Director                                     /s/ John Kean


   Director                                     /s/ Barry T. Parker


   Director                                     /s/ Hugo M. Pfaltz, Jr.


   Director                                     /s/ Chester A. Ring III


   Director                                     /s/ Joan Verplanck


   Director                                     /s/ Robert W. Kean III


   Director                                     /s/ Edward A. Clerico


   Senior Vice President , Chief Financial
    Officer & Treasurer                         /s/ Gail P. Brady
   (Principal Financial Officer)

   Vice President & Controller                  /s/ Dennis W. Doll
   (Principal Accounting Officer)

-26-
<PAGE>



INDEPENDENT AUDITORS' REPORT

E'TOWN CORPORATION:

We have audited the  consolidated  financial  statements of E'town  Corporation
and its  subsidiaries  as of December  31,  1999 and 1998,  and for each of the
three years in the period ended  December 31, 1999,  and have issued our report
thereon  dated  March 9,  2000;  such  consolidated  financial  statements  and
report  are  included  in your  1999  Annual  Report  to  Shareholders  and are
incorporated  herein by  reference.  Our audits  also  included  the  financial
statement  schedules  of E'town  Corporation  and its  subsidiaries,  listed in
Item 14. These  financial  statement  schedules are the  responsibility  of the
Company's  management.  Our  responsibility  is to express an opinion  based on
our  audits.  In  our  opinion,   such  financial  statement  schedules,   when
considered in relation to the basic  consolidated  financial  statements  taken
as a whole,  present fairly in all material  respects the information set forth
therein.


/s/ Deloitte & Touche LLP
March 9, 2000
Parsippany, New Jersey

-27-
<PAGE>

                                                                   Schedule II
             E'TOWN CORPORATION AND SUBSIDIARIES
             VALUATION AND QUALIFYING ACCOUNTS




Column A                Column B       Column C      Column D      Column E

                                      Additions
                       Balance at     Charged to                   Balance at
                       Beginning of   Costs and     Deductions      End of
Description:             Period        Expenses        (A)          Period

Reserve for
Uncollectible Accounts:

Year Ended 12/31/99    $1,065,000       $823,569      $573,069    $1,315,500

Year Ended 12/31/98      $612,000       $995,940 (B)  $542,940    $1,065,000

Year Ended 12/31/97      $566,000       $607,929      $561,929      $612,000


(A)  Write-off of uncollectible accounts, net of recoveries.

(B)  Includes reserves established for Liberty Water Company, ($39,970)
     and Applied Water Management, Inc., ($344,630), acquired in 1998 and
     Edison Water Company ($37,400) acquired in 1997.




               ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
                   VALUATION AND QUALIFYING ACCOUNTS


Column A                Column B       Column C      Column D      Column E

                                      Additions
                       Balance at     Charged to                   Balance at
                       Beginning of   Costs and     Deductions      End of
Description:             Period        Expenses        (A)          Period

Reserve for
Uncollectible Accounts:

Year Ended 12/31/99      $643,000       $603,939      $573,439      $673,500

Year Ended 12/31/98      $612,000       $573,940      $542,940      $643,000

Year Ended 12/31/97      $566,000       $607,929      $561,929      $612,000


(A)  Write-off of uncollectible accounts, net of recoveries.

-28-
<PAGE>



                                 EXHIBIT INDEX

Certain of the following exhibits, designated with an asterisk(*), are filed
herewith.  The exhibits not so designated have heretofore been filed with the
Commission and are incorporated herein by reference to the documents
indicated in brackets following the description of such exhibits. Exhibits
designated with a (1) are management contracts or compensatory plans or
arrangements.

                                  E'town Corporation

          Exhibit
          No.                          Description


           2      Agreement and Plan of Merger, dated as of November 21, 1999,
                  among E'town Corporation, Thames Water Plc and Edward
                  Acquisition Corp.[Form 8-K, filed November 24, 1999,
                  Exhibit 2.1]

           3(a) - Certificate of Incorporation of E'town Corp.
                  [Registration Statement No. 33-42509, Exhibit 4(a)]

           3(b) - By-Laws of E'town Corporation [Form 10-K for the year 1998,
                  Exhibit 3(c)]

           3(c) - Certificate of Incorporation of E'town Properties, Inc.
                  [Registration Statement No. 33-32143, Exhibit 4(j)]

           3(d) - By-laws of E'town Properties, Inc. [Registration Statement
                  No. 33-32143, Exhibit 4(n)]

           4(a) - Rights Agreement dated as of February 4, 1991 between
                  E'town and the Rights Agent [Registration Statement
                  No. 33-38566, Exhibit 4(n)]

           4(b) - Amendment dated as of November 21, 1999 to the Rights
                  Agreement dated as of February 4, 1991 between E'town
                  Corporation and The Bank of New York, as Rights Agent
                  [Form 8-K, filed December 17, 1999, Exhibit 4]

           4(c) - Indenture dated as of January 1, 1987 from E'town
                  Corporation to Boatmen's Trust, Trustee, relating to the
                  6 3/4% Convertible Subordinated Debentures due 2012
                  [Registration Statement No. 33-32143, Exhibit 4(a)]

           4(d) - Note Purchase Agreement relating to the 6.79% Senior Notes
                  due December 15, 2007 [Form 10-K for the year 1997,
                  Exhibit 4(c)]

          10(a) - Incentive Stock Option Plan [Registration Statement
                  No. 2-99602, Exhibit 28(a)] (1)

          10(b) - Savings and Investment Plan - 401(k) [Form 10-K for the year
                  1994, Exhibit 10(b)]

          10(c) - E'town's 1987 Stock Option Plan [Registration Statement No.
                  33-42509, Exhibit 28] (1)

          10(d) - Management Incentive Plan [Registration Statement No.
                  33-38566, Exhibit 10(i)] (1)

          10(e) - E'town's 1998 Stock Option Plan [Definitive Proxy Statement
                  for 1998 Annual Meeting of Stockholders, filed pursuant to
                  Rule 14a-6(b)] (1)

          10(f) - E'town's 1998  Directors Stock Plan [Definitive Proxy
                  Statement for 1998 Annual  Meeting of Stockholders,
                  filed pursuant to Rule 14a-6(b)] (1)
-29-
<PAGE>
          10(g) - E'town's 1990 Performance Stock Program [Registration
                  Statement No. 33-46532, Exhibit 10(k)] (1)

          10(h) - E'town's Dividend Reinvestment and Stock Purchase Plan
                  [Registration No. 333-69549, Dated December 23, 1998]

          10(i) - Change in Control Agreement for Andrew M. Chapman [Form 10-Q
                  for the quarter ended March 31, 1995, Exhibit 10] (1)

          10(j) - Contract Between Edison Water Company, E'town Corporation
                  and the Township of Edison to Operate the Water System of the
                  Township of Edison, New Jersey dated as of June 25, 1997
                  [Form 10-Q for the quarter ended June 30, 1997, Exhibit 10(a)]

          10(k) - Employment Contract Between E'town Corporation and Anne Evans
                  Estabrook [Form 10-K for the year 1997, Exhibit 10(k)] (1)

          10(l) - Change in Control Agreement for Anne Evans Estabrook
                  [Form 10-K for the year 1997, Exhibit 10(k)] (1)

          10(m) - Contract with the City of Elizabeth, New Jersey for the
                  Operation by E'town Corporation of the City's Water
                  System [Form 10-Q for the quarter ended September 30, 1998,
                  Exhibit 10(m)]

          10(n) - Employment Agreement between Applied Water Management, Inc.
                  And Edward A. Clerico [Form 10-Q for the quarter ended
                  September 30, 1998, Exhibit 10(n)](1)

          10(o) - Change in Control Agreement for certain officers [Form 10-K
                  for the year 1998, Exhibit 10(o)](1)

          10(p) - E'town Corporation & Subsidiaries - Form of Amended and
                  Restated Change in Control Agreement for certain officers of
                  E'town Corporation and Affiliated Companies [Form 10-Q for
                  the quarter ended March 31, 1999, Exhibit 10(o)](1)

         10(q) -  E'town Corporation & Subsidiaries - Amendments to Change in
                  Control Agreement For Andrew M. Chapman [Form 10-Q for the
                  quarter ended March 31, 1999, Exhibit 10(p)](1)

         10(r) -  E'town Corporation & Subsidiaries - Amendments to Change in
                  Control Agreement For Anne E. Estabrook [Form 10-Q for the
                  quarter ended March 31, 1999, Exhibit 10(q)](1)

        *10(s) -  Employment Contract Between E'town Corporation and Andrew M.
                  Chapman dated November 21, 1999 (1)

        *10(t) -  Amended and Restated Change in Control Agreement for Certain
                  Officers of Affiliates of E'town Corporation dated
                  November 20, 1999 (1)

          *12  -  Computation of Ratio of Earnings to Fixed Charges

          *13  -  Portion of the 1999 Annual Report to Shareholders which
                  includes Management's Discussion and Analysis of Consolidated
                  Financial Condition and Results of Operations, Consolidated
                  Financial Statements, Notes to Consolidated Financial
                  Statements, Independent Auditors' Report and Other Financial
                  and Statistical Data and is herein incorporated by reference.

          *21  -  Subsidiaries of the Corporation

          *23  -  Consent of Deloitte & Touche LLP, Independent Auditors

          *27  -  Financial Data Schedule

-30-
<PAGE>
                            Elizabethtown Water Company

          Exhibit
          No.                       Description

          3(a) -  Form of Restated Certificate of Incorporation of
                  Elizabethtown Water Company [Form 10-K for the year ended
                  December 31, 1994, Exhibit 3(a)]

          3(b) -  By-laws of Elizabethtown Water Company [Form 10-K for the
                  year 1998, Exhibit 3(b)]

          4(a) -  Indenture dated as of November 1, 1994 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 7 1/4% Debentures due 2028 [Form 10-K for year ended
                  December 31, 1994, Exhibit 4(a)]

          4(b) -  Indenture dated as of September 1, 1992 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 8% Debentures due 2022 [Form 10-K for year ended
                  December 31, 1993, Exhibit 4(a)]

          4(c) -  Indenture dated as of October 1, 1991 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 8 3/4% Debentures due 2021 [Registration Statement No.
                  33-46532, Exhibit 4(f)]

          4(d) -  Indenture dated as of August 1, 1991 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 6.60% Debentures due 2021 [Registration Statement
                  No. 33-46532, Exhibit 4(g)]

          4(e) -  Indenture dated as of August 1, 1991 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 6.70% Debentures due 2021 [Registration Statement
                  No. 33-46532, Exhibit 4(h)]

          4(f) -  Indenture dated as of October 1, 1990 from Elizabethtown
                  Water Company to Citibank, N.A., Trustee, relating to the
                  7 1/2% Debentures due 2020 [Registration Statement No.
                  33-38566, Exhibit 4(e)]

          4(g) -  Indenture dated as of December 1, 1989 from Elizabethtown
                  Water Company to Citibank, N.A., Trustee, relating to the
                  7.20% Debentures due 2019 [Registration Statement No.
                  33-38566, Exhibit 4(f)]

          4(h) -  Indenture dated as of December 1, 1995 from Elizabethtown
                  Water Company to The Bank of New York, Trustee, relating to
                  the 5.60% Debentures due 2025 [Form 10-K for the year 1995,
                  Exhibit 4(h)]

          4(i) -  Indenture dated as of June 1, 1997 from Elizabethtown Water
                  Company to The Bank of New York, Trustee, relating to
                  Variable Rate Demand Debentures, due 2027 (Series B)
                  [Form 10-Q for the quarter ended September 30, 1997,
                  Exhibit 4(i)]

          4(j) -  Indenture dated as of June 1, 1997 from Elizabethtown Water
                  Company to The Bank of New York, Trustee, relating to
                  Variable Rate Demand Debentures, due 2027 (Series A)
                  [Form 10-Q for the quarter ended September 30, 1997,
                  Exhibit 4(j)]

          4(k) -  Loan Agreement Dated November 1, 1998 Between the State of
                  New Jersey, Acting Through the New Jersey Department of
                  Environmental Protection, and The Mount Holly Water Company
                  [Form 10-K for the year 1998, Exhibit 4(k)]
-31-
<PAGE>
          4(l) -  Loan Agreement Dated November 1, 1998 Between the New
                  Jersey Environmental Infrastructure Trust and The Mount Holly
                  Water Company [Form 10-K for the year 1998, Exhibit 4(l)]

         10(a) -  Contract for service to Middlesex Water Company.[Registration
                  Statement No. 33-38566, Exhibit 10(a)]

         10(b) -  Contract for service to Edison Township. [Form 10-Q for the
                  quarter ended June 30, 1997, Exhibit 10(b)

         10(c) -  Contract for service to New Jersey-American Water Company.
                  [Form 10-K for the year ended December 31, 1993,
                  Exhibit 10(c)]

         10(d) -  Contract for service to City of Elizabeth. [Form 10-K for the
                  year ended December 31, 1992, Exhibit 10(d)]

         10(e) -  Contract for service to Franklin Township.[Registration
                  Statement No. 33-46532, Exhibit 10(e)]

         10(f) -  Contract with the New Jersey Water Supply Authority for the
                  purchase of water from the Raritan Basin. [Registration
                  Statement No. 33-32143, Exhibit 10(e)]

         10(g) -  Supplemental Executive Retirement Plan of Elizabethtown
                  Water Company [Form 10-K for the year ended December 31,
                  1992, Exhibit 10(g)] (1)

         10(h) -  Medical Reimbursement Plan of Elizabethtown Water Company
                  [Form 10-K for the year 1992, Exhibit 10(h)] (1)

         10(i) -  Supplemental Executive Retirement Plan of Elizabethtown
                  Water Company [Form 10-Q for the quarter ended September 30,
                  1995, Exhibit 10](1)

         10(k) -  Employment Contract Between Elizabethtown Water Company and
                  Anne Evans Estabrook [Form 10-K for the year 1997, Exhibit
                  10(k)] (1)

         10(l) -  Amendment to Supplemental Executive Retirement Plan of
                  Elizabethtown Water Company [Form 10-K for the year 1998,
                  Exhibit 10(l)](1)

        *10(m) -  Amendment to Supplemental Executive Retirement Plan of
                  Elizabethtown Water Company dated November 1, 1999 (1)

        *12(a) -  Computation of Ratio of Earnings to Fixed Charges

        *12(b) -  Computation of Ratio of Earnings to Fixed Charges and
                  Preferred Dividends

           *21 -  Subsidiaries of the Company

           *23 -  Consent of Deloitte & Touche LLP, Independent
                  Auditors

           *27 -  Financial Data Schedule.
-32-
<PAGE>
                                                                APPENDIX I

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDER AND BOARD OF DIRECTORS OF ELIZABETHTOWN WATER COMPANY:

We have audited the  accompanying  consolidated  balance  sheets and statements
of  consolidated   capitalization  of  Elizabethtown   Water  Company  and  its
subsidiary  as of December  31, 1999 and 1998,  and the related  statements  of
consolidated  income,  shareholder's  equity,  and cash  flows  for each of the
three years in the period ended  December 31,  1999.  Our audits also  included
the  financial  statement  schedules  listed  in the  Index at Item  14.  These
financial  statements and financial  statement schedules are the responsibility
of the Company's  management.  Our  responsibility  is to express an opinion on
these  financial  statements  and financial  statement  schedules  based on our
audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that we plan and  perform  the  audit to
obtain  reasonable  assurance  about whether the financial  statements are free
of  material  misstatement.  An  audit  includes  examining,  on a test  basis,
evidence   supporting   the   amounts   and   disclosures   in  the   financial
statements.  An audit also includes  assessing the accounting  principles  used
and  significant  estimates  made by  management,  as well  as  evaluating  the
overall financial  statement  presentation.  We believe that our audits provide
a reasonable basis for our opinion.

In our opinion,  such consolidated  financial statements present fairly, in all
material respects,  the financial  position of Elizabethtown  Water Company and
its  subsidiary  at  December  31,  1999 and  1998,  and the  results  of their
operations  and their  cash  flows for each of the  three  years in the  period
ended  December  31, 1999 in  conformity  with  generally  accepted  accounting
principles.  Also, in our opinion,  such financial  statement  schedules,  when
considered in relation to the basic  consolidated  financial  statements  taken
as a whole,  present fairly in all material  respects the information set forth
therein.



/s/ Deloitte & Touche LLP

March 9, 2000
Parsippany, New Jersey

-1-
<PAGE>


ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY                           APPENDIX I
STATEMENTS OF CONSOLIDATED INCOME
(In Thousands)
                                                       Year Ended December 31,
                                                     1999       1998      1997
--------------------------------------------------------------------------------
Operating Revenues                              $ 138,306  $ 134,847  $ 131,788
--------------------------------------------------------------------------------
Operating Expenses:
  Operation                                        50,135     45,117     45,301
  Maintenance                                       6,321      5,674      6,548
  Depreciation                                     13,354     12,439     12,233
  Revenue taxes                                    17,207     16,728     16,550
  Real estate, payroll and other taxes              3,119      2,613      3,064
  Federal income taxes (Note 4)                    11,116     12,678     11,026
--------------------------------------------------------------------------------
        Total operating expenses                  101,252     95,249     94,722
--------------------------------------------------------------------------------
Operating Income                                   37,054     39,598     37,066
--------------------------------------------------------------------------------
Other Income (Expense):
  Allowance for equity funds used during
    construction (Note 3)                             323        597        215
  Other - net                                         990        612        494
  Federal income taxes (Note 4)                      (460)      (423)      (248)
--------------------------------------------------------------------------------
        Total other income (expense)                  853        786        461
--------------------------------------------------------------------------------
Total Operating and Other Income                   37,907     40,384     37,527
--------------------------------------------------------------------------------
Interest Charges:
  Interest on long-term debt                       14,661     14,721     14,030
  Other interest expense - net                      1,780        960      2,382
  Allowance for funds used during construction       (338)      (456)      (166)
  Amortization of debt discount and expense-net       399        391        376
--------------------------------------------------------------------------------
        Total interest charges                     16,502     15,616     16,622
--------------------------------------------------------------------------------
Net Income                                         21,405     24,768     20,905
Preferred Stock Dividends                             813        813        813
--------------------------------------------------------------------------------
Earnings Applicable To Common Stock             $  20,592  $  23,955  $  20,092
================================================================================

See Notes to Consolidated Financial Statements.
-2-
<PAGE>

ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY                           APPENDIX I
CONSOLIDATED BALANCE SHEETS
(In Thousands)
                                                                  December 31,
Assets                                                          1999       1998
--------------------------------------------------------------------------------

Utility Plant-At Original Cost:
  Utility plant in service                                 $ 770,251  $ 714,301
  Construction work in progress                               17,495     15,694
--------------------------------------------------------------------------------
        Total utility plant                                  787,746    729,995
  Less accumulated depreciation and amortization             136,975    125,096
--------------------------------------------------------------------------------
        Utility plant-net                                    650,771    604,899
--------------------------------------------------------------------------------

Non-utility Property (Note 5)                                  7,337      7,315
--------------------------------------------------------------------------------


Current Assets:
  Cash and cash equivalents                                    1,342      3,598
  Customer and other accounts receivable
   (less reserve: 1999, $674, 1998, $643)                     19,341     16,952
  Unbilled revenues                                           10,578     10,091
  Infrastructure loan funds receivable (Note 5)                5,657      5,895
  Materials and supplies-at average cost                       4,069      2,538
  Prepaid federal income taxes                                 5,807        687
  Prepaid insurance, other taxes, other                        3,229      1,746
--------------------------------------------------------------------------------
        Total current assets                                  50,023     41,507
--------------------------------------------------------------------------------


Deferred Charges:
  Waste residual management (Note 8)                           1,538      1,371
  Unamortized debt and preferred stock expenses (Note 8)       8,900      9,368
  Taxes recoverable through future rates (Notes 4 and 8)      13,466     14,226
  Postretirement benefit expense (Notes 8 and 12 )             3,145      3,490
  Flood expenditures (Note 10)                                 5,000
  Other unamortized expenses (Note 8)                          1,007      1,152
--------------------------------------------------------------------------------
        Total deferred charges                                33,056     29,607
--------------------------------------------------------------------------------
            Total                                          $ 741,187  $ 683,328
================================================================================

See Notes to Consolidated Financial Statements.
-3-
<PAGE>

ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY                           APPENDIX I
CONSOLIDATED BALANCE SHEETS
(In Thousands)
                                                                  December 31,
Capitalization and Liabilities                                  1999       1998
--------------------------------------------------------------------------------


Capitalization (Note 5):
  Common shareholder's equity                              $ 220,461  $ 208,573
  Mandatory redeemable cumulative preferred stock             12,000     12,000
  Long-term debt - net                                       244,842    245,148
--------------------------------------------------------------------------------
        Total capitalization                                 477,303    465,721
--------------------------------------------------------------------------------


Current Liabilities:
  Notes payable - banks (Note 6)                              51,500     22,000
  Long-term debt - current portion (Note 5)                      481         30
  Accounts payable and other liabilities                      19,989     12,457
  Customers' deposits                                            197        248
  Municipal and state taxes accrued                           17,592     16,776
  Interest accrued                                             3,745      3,228
  Preferred stock dividends accrued                               59         59
--------------------------------------------------------------------------------
        Total current liabilities                             93,563     54,798
--------------------------------------------------------------------------------


Deferred Credits:
  Customers' advances for construction                        40,019     40,874
  Federal income taxes (Note 4)                               69,570     64,696
  Unamortized investment tax credits                           7,636      7,839
  Accumulated postretirement benefits (Note 12)                3,399      3,947
--------------------------------------------------------------------------------
        Total deferred credits                               120,624    117,356
--------------------------------------------------------------------------------


Contributions in Aid of Construction                          49,697     45,453
--------------------------------------------------------------------------------


Commitments and Contingent Liabilities (Note 11)
--------------------------------------------------------------------------------
                Total                                      $ 741,187  $ 683,328
================================================================================

See Notes to Consolidated Financial Statements.
-4-
<PAGE>

ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY                           APPENDIX I
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(In Thousands Except Share Amounts)
                                                                  December 31,
                                                                1999       1998
--------------------------------------------------------------------------------

Common Shareholder's Equity (Note 5):
  Common stock without par value, authorized, 15,000,000
   shares, issued 1999 and 1998, 1,974,902 shares           $ 15,741   $ 15,741
  Paid-in capital                                            141,575    132,753
  Capital stock expense                                         (485)      (485)
  Retained earnings                                           63,630     60,564
--------------------------------------------------------------------------------
      Total common shareholder's equity                      220,461    208,573
--------------------------------------------------------------------------------

Preferred Shareholders' Equity: (Note 5)
 Mandatory Redeemable Cumulative Preferred Stock
   $100 par value, authorized, 200,000 shares; $5.90
    series, issued and outstanding, 120,000 shares            12,000     12,000

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

 Long-Term Debt (Notes 5 and 7) :
  Elizabethtown Water Company:
    7.20% Debentures, due 2019                                10,000     10,000
    7 1/2% Debentures, due 2020                               15,000     15,000
    6.60% Debentures, due 2021                                10,500     10,500
    6.70% Debentures, due 2021                                15,000     15,000
    8 3/4% Debentures, due 2021                               27,500     27,500
    8% Debentures, due 2022                                   15,000     15,000
    5.60% Debentures, due 2025                                40,000     40,000
    7 1/4% Debentures, due 2028                               50,000     50,000
   Variable Rate Debentures, due 2027                         50,000     50,000

  The Mount Holly Water Company:
    New Jersey Environmental Infrastructure Trust Notes
    (due serially through 2018)                                7,040      7,295
    New Jersey Department of Environmental Protection
     Notes (due serially through 2018)                         5,677      5,895
    9.65% Mortgage Note Payable (due 2001)                       156
    Note Payable (due 2000)                                                  30
--------------------------------------------------------------------------------
        Total long-term debt                                 245,873    246,220
    Unamortized discount-net                                  (1,031)    (1,072)
--------------------------------------------------------------------------------
        Total long-term debt-net                             244,842    245,148
--------------------------------------------------------------------------------
           Total Capitalization                            $ 477,303  $ 465,721
================================================================================

See Notes to Consolidated Financial Statements.
-5-
<PAGE>

ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY                           APPENDIX I
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(In Thousands)



                                                       Year Ended December 31,
                                                     1999       1998       1997
--------------------------------------------------------------------------------


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

Paid-in Capital:
 Balance at Beginning of Period                   132,753    124,560    117,457
  Capital contributed by parent company from:
   Common Stock issued under Dividend
    Reinvestment and Stock Purchase Plan            8,702      7,861      6,980
   Issuance of restricted and unrestricted stock
    stock under compensation programs                 120        332        123
--------------------------------------------------------------------------------
       Balance at End of Period                   141,575    132,753    124,560
--------------------------------------------------------------------------------

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

Retained Earnings:
 Balance at Beginning of Period                    60,564     53,538     49,580
 Net income                                        21,405     24,768     20,905
Dividends on common stock                         (17,526)   (16,929)   (16,134)
 Dividends on preferred stock                        (813)      (813)      (813)
--------------------------------------------------------------------------------
       Balance at End of Period                    63,630     60,564     53,538
--------------------------------------------------------------------------------

          Total Common Shareholder's Equity     $ 220,461  $ 208,573  $ 193,354
================================================================================

See Notes to Consolidated Financial Statements.
-6-
<PAGE>
                                                                 APPENDIX I
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In Thousands)

                                                      Year Ended December 31,
                                                    1999       1998       1997
--------------------------------------------------------------------------------
Cash Flows from Operating Activities:
 Net income                                     $  21,405  $  24,768  $  20,905
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization                  13,354     12,439     12,233
    Increase in deferred charges                   (5,022)      (501)       690
    Deferred income taxes and investment tax
      credits-net                                   4,671      3,855      2,693
    Allowance for funds used during construction     (661)    (1,053)      (381)
    Other operating activities-net                    726        252        485
 Change in current assets and current liabilities
   excluding cash, short-term investments and
   current portion of debt
      Customer and other accounts receivable       (2,086)       331       (558)
      Unbilled revenues                              (487)      (428)      (307)
      Accounts payable and other liabilities        7,459      1,807     (6,495)
      Accrued/prepaid interest and taxes           (5,287)     1,095      3,173
      Other                                        (1,493)      (572)        78
--------------------------------------------------------------------------------
      Net cash provided by operating activities    32,579     41,993     32,516
--------------------------------------------------------------------------------

Cash Flows Provided (Used) by Financing Activities:
 Capital contributed by parent company              8,702      7,861      6,980
 Proceeds from issuance of debentures                                    50,000
 Funds held in Trust by others                        (30)    (7,234)
 Proceeds from issuances of other long-term debt               7,295
 Debt and preferred stock issuance and
   amortization costs                                 474        288       (667)
 Repayment of long-term debt                          (32)       (27)       (30)
 Repayment of current portion of long-term debt       (30)
 Contributions and advances for construction        5,206     10,908      7,275
 Refunds of advances for construction              (2,896)    (4,575)    (2,516)
 Net increase (decrease) in notes payable - banks  29,500      4,000    (51,000)
 Dividends paid on common stock and
  preferred stock                                 (18,234)   (17,637)   (16,842)
--------------------------------------------------------------------------------
     Net cash provided (used) by
     financing activities                          22,660        879     (6,800)
--------------------------------------------------------------------------------
Cash Flows Used for Investing Activities:
 Utility plant expenditures (excluding allowance
  for funds used during construction)             (56,635)   (43,500)   (24,612)
Purchase of company                                  (860)
--------------------------------------------------------------------------------
    Cash used for investing activities            (57,495)   (43,500)   (24,612)
--------------------------------------------------------------------------------
Net (Decrease) Increase in Cash and
  Cash Equivalents                                 (2,256)      (628)     1,104
Cash and Cash Equivalents at
  Beginning of Period                               3,598      4,226      3,122
--------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period      $   1,342  $   3,598  $   4,226
================================================================================
Supplemental Disclosures of Cash Flow Information:
 Cash paid during the year for:
  Interest (net of amount capitalized)           $ 16,377  $  14,459  $  16,063
  Income taxes                                   $  9,700  $   7,723  $   5,981
  Preferred stock dividends                      $    708  $     708  $     708
  Noncash capital contribution by parent company $    120  $     332  $     123

See Notes to Consolidated Financial Statements.
-7-
<PAGE>
ELIZABETHTOWN WATER COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     APPENDIX I

1. Organization
Elizabethtown Water Company (Elizabethtown or Company) and its wholly owned
subsidiary, The Mount Holly Water Company (Mount Holly), is a  wholly owned
subsidiary of  E'town Corporation (E'town or Corporation). Elizabethtown and
Mount Holly are regulated water companies in the State of New Jersey. E'town
is also the parent of E'town Properties, Inc. (Properties), Edison Water
Company (Edison), Liberty Water Company, (Liberty), Applied Water Management,
Inc. (AWM) and Applied Wastewater Management, Inc. (AWWM).

2. Pending  Merger
On November 21, 1999, E'town entered into an agreement (Merger Agreement)
with Thames Water Plc (Thames Water) under which Thames Water has agreed,
subject to certain conditions, to acquire E'town for $68 per share in cash or
approximately $607 million. Thames Water will also assume the debt of E'town.
The acquisition will take the form of a merger (Merger) of E'town with a
newly formed subsidiary of Thames Water and E'town will be the surviving
company.

A special meeting of E'town shareholders is expected to be held during the
second quarter of 2000 to seek shareholder approval of the transaction. The
acquisition is also subject to approval by the New Jersey Board of Public
Utilities (BPU), the Federal Trade Commission and the Department of Justice
under the Hart-Scott-Rodino antitrust Improvement Act of 1976. Certain
clearances must also be obtained from the New Jersey environmental
regulators. The transaction is expected to close prior to the end of 2000.

3. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include Elizabethtown and its
subsidiary, Mount Holly. Significant intercompany accounts and transactions
have been eliminated. Elizabethtown and Mount Holly are regulated water
utilities and follow the Uniform System of Accounts, as adopted by the BPU.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and
expenses during the reporting period.

Utility Plant and Depreciation
Income is charged with the cost of labor, materials and other expenses
incurred in making repairs and minor replacements, and in maintaining the
properties. Utility plant accounts are charged with the cost of improvements
and major replacements of property. When depreciable property is retired or
otherwise disposed of, the cost thereof, plus the cost of removal net of
salvage, is charged to accumulated depreciation.

Depreciation is generally computed on a straight-line basis at functional
rates for various classes of assets based on the estimated useful lives of
the assets. The balances of significant classes of assets and their
respective depreciable lives at December 31, 1999 and 1998 are as follows:

                                                                  Annual
                                                               Depreciation
(Thousands of Dollars)                  1999         1998          Rate
-------------------------------------------------------------------------------
Asset Class :
Transmission and Distribution Mains $ 337,408    $ 318,363          0.99 %
Water Treatment Equipment             111,961      106,787          2.35
Services                               67,154       62,213          2.77
Structures and Improvements            88,147       75,736   2.08 - 2.74
Pumping Equipment                      42,704       41,082   2.59 - 3.38
Meters                                 27,589       23,415          2.77
Water Storage Tanks                    23,658       21,232          1.37
Other                                  71,630       65,473     0 - 15.73
-------------------------------------------------------------------------------
Total utility plant in service      $ 770,251    $ 714,301
===============================================================================
-8-
<PAGE>
The provision for depreciation, as a percentage of average depreciable
property, on a composite basis, was 1.82% for 1999, 1.81% for 1998 and 1.85%
for 1997.

Allowance for Funds Used During Construction
Elizabethtown and Mount Holly capitalize, as an appropriate cost of utility
plant, an Allowance for Funds Used During Construction (AFUDC), which
represents the cost of financing major projects during construction. AFUDC, a
non-cash credit on the Statements of Consolidated Income, is added to the
construction cost of the project and included in rate base and then recovered
through depreciation charges in rates during the assets' useful lives. AFUDC
is comprised of a debt component (credited to Interest Charges), and an
equity component (credited to Other Income) in the Statements of Consolidated
Income. AFUDC totaled $.66 million, $1.05 million and $.38 million for 1999,
1998 and 1997, respectively.

Revenues
Water revenues are recorded based on the amounts of water delivered to
customers through the end of each accounting period. This includes an accrual
for unbilled revenues for water delivered from the time meters were last read
to the end of the respective accounting periods.

Federal Income Taxes
Elizabethtown files a consolidated tax return with E'town. Income taxes are
allocated to Elizabethtown based upon the Company's taxable income. Deferred
income taxes are provided for temporary differences in the recognition of
revenues and expenses for tax and financial statement purposes to the extent
permitted by the BPU. Elizabethtown and Mount Holly account for prior years'
investment tax credits by the deferral method, which amortizes the credits
over the lives of the respective assets.

Customers'  Advances for Construction and Contributions in Aid of Construction
Customers' Advances for Construction (CAC) and Contributions in Aid of
Construction (CIAC) represent capital provided by developers, under a
contract, for main extensions to new real estate developments. CAC is
refundable to developers based upon amounts for each type and quantity of
unit constructed by the developer when the units are metered. Such contracts
have a ten-year life.  CIAC represents CAC that, under the terms of
individual main extension agreements, are no longer subject to refund.

Cash Equivalents
Elizabethtown Water Company considers all highly liquid debt instruments
purchased with maturities of three months or less to be cash equivalents.

New Accounting Pronouncements
In 1998, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activity". In June 1999, the FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activity - Deferral
of the Effective Date of SFAS No. 133" to defer the effective date of SFAS
No. 133 for one year. Consequently, SFAS No. 133 will now be effective for
all fiscal quarters of all fiscal years beginning after June 15, 2000. The
Company does not believe this Statement will have an impact on its financial
condition and results of operations.

Reclassification
Certain prior year amounts have been reclassified to conform to the current
year's presentation.

Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and
expenses during the reporting period.
-9-
<PAGE>
4. Federal Income Taxes
The computation of federal income taxes and the reconciliation of the tax
provision computed at the federal statutory rate (35%) with the amount
reported in the Statements of Consolidated Income follow:

(Thousands of Dollars)                      1999      1998      1997
-------------------------------------------------------------------------------
Tax expense at statutory rate          $   11,543  $ 13,255  $ 11,262
Items for which deferred taxes are
   not provided:
     Difference between book
       and tax depreciation                   147        63        58
     Other                                     89       (14)      157
Investment tax credits                       (203)     (203)     (203)
-------------------------------------------------------------------------------
Provision for federal income taxes     $   11,576  $ 13,101  $ 11,274
===============================================================================

The provision for federal income
 taxes is comprised of the following:
Current                                $    5,727  $  8,902  $  7,212
Tax on main extension refunds                 416       525     1,369
Deferred:
   Tax depreciation                         3,166     3,131     2,716
   Capitalized interest                        56        91        19
   Main cleaning and lining                   758       796       612
   Flood expenditures                       1,750
   Other                                      (94)       40      (451)
Investment tax credits - net                 (203)     (203)     (203)
Refund from IRS                                        (181)
-------------------------------------------------------------------------------
Total provision                        $   11,576  $ 13,101  $ 11,274
===============================================================================

Elizabethtown and Mount Holly provide deferred taxes at the enacted
statutory rate for all temporary differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities
irrespective of the treatment for rate-making purposes. Management believes it
is probable that the accumulated tax benefits that previously have been treated
as a flow-through item to Elizabethtown and Mount Holly's customers will be
recovered from utility customers in the future. Accordingly, offsetting
regulatory assets were established. At December 31, 1999, Elizabethtown and
Mount Holly had deferred tax liabilities of $67.0 million and $2.6 million.
There were also, at December 31, 1999, offsetting regulatory assets of $12.7
million and $.8 million for Elizabethtown and Mount Holly, respectively,
representing the future revenue expected to be recovered through rates based
upon established regulatory practices which permit recovery of current taxes
payable. These amounts were determined using the enacted Federal income tax rate
of 35% and were calculated in accordance with SFAS No. 109.

The tax effect of significant temporary differences representing deferred
income tax assets and liabilities as of December 31, 1999 and 1998 is as
follows:

(Thousands of Dollars)                           1999       1998
-------------------------------------------------------------------------------
Water utility plant - net                   $  (51,508) $ (47,538)
Taxes recoverable through future rates         (13,466)   (14,226)
Prepaid pension expense                           (123)       (29)
Capitalized interest                            (2,739)    (2,683)
Waste residuals                                   (539)      (480)
Flood expenditures                              (1,750)
Other assets                                       720        541
Other liabilities                                 (165)      (281)
-------------------------------------------------------------------------------
Net deferred income tax liabilities         $  (69,570) $ (64,696)
===============================================================================
-10-
<PAGE>
5. Capitalization
E'town routinely makes equity contributions to Elizabethtown which represent
the proceeds of common stock issued under E'town's Dividend Reinvestment and
Stock Purchase Plan (DRP). Such equity contributions amounted to $8.70
million, $7.86 million and $6.98 million for the years ended December 31, 1999,
1998 and 1997, respectively.

Preferred Stock
Elizabethtown's $5.90 Mandatory Redeemable Cumulative Preferred Stock is not
redeemable at the option of the Company. Elizabethtown is required to redeem
the entire issue at $100 per share on March 1, 2004.

Long-term Debt
Elizabethtown's long-term debt indentures restrict the amount of retained
earnings available to Elizabethtown to pay cash dividends (which is the
primary source of funds available to the Corporation for payment of dividends
on its common stock) or acquire Elizabethtown's common stock, all of which is
held by E'town. At December 31, 1999, $7.52 million of Elizabethtown's
retained earnings were restricted under the most restrictive indenture
provision.

In November 1998 Mount Holly closed on loan agreements that will make
available up to $13.19 million in proceeds from the issuance of unsecured
notes through the New Jersey Environmental Infrastructure Trust Financing
Program. This program provides financing through two loans. The first loan,
in the amount of $7.30 million, is through the New Jersey Environmental
Infrastructure Trust (Trust), which issued tax-exempt bonds with average
interest rates of 4.7%. Non-utility Property includes $7.2 million of funds
held in trust by others relating to this financing. The second loan, in the
amount of $5.89 million, is from the State of New Jersey, acting through the
New Jersey Department of Environmental Protection. The State is participating
in the Drinking Water State Revolving Fund authorized by the Safe Drinking
Water Act amendments of 1996 whereby the federal government is funding the
state loan at no interest cost. The effective interest rate for the combined
notes is approximately 2.59%. The proceeds of the loans will finance a
portion of  the Mansfield Project (see Note 9).

In June 1997 Elizabethtown issued a total of $50 million of 30-year Variable
Rate Debentures due December 2027, $25 million of Series A and $25 million of
Series B, to evidence a like amount of Variable Rate Notes issued through the
New Jersey Economic Development Authority (NJEDA). The proceeds were used to
repay $50 million of balances outstanding under Elizabethtown's revolving
credit agreement. The NJEDA Notes are remarketed on a weekly basis, at which
time the interest rates on each issue are subject to change. The rates in
effect as of December 31, 1999, were 5.20% for Series A and 5.10% for
Series B.

6. Lines of Credit
Elizabethtown has $90 million in lines of credit with several banks as of
December 31, 1999. Of this amount, $10 million represents a committed line of
credit. These lines, together with internal funds and proceeds of future
issuances of debt and preferred stock, and capital contributions from
proceeds from sales of common stock by E'town, are expected to be sufficient
to finance  Elizabethtown's capital needs.

Information relating to bank borrowings for 1999, 1998 and 1997 is as follows:


(Thousands of Dollars)                   1999           1998          1997
-------------------------------------------------------------------------------
Maximum amount outstanding          $  51,500       $ 22,000      $ 69,500

Average monthly amount
   outstanding                      $  29,955       $ 14,983      $ 40,886

Average interest rate at year end         6.9%           5.9%          6.0%

Weighted average interest rate
   based on average daily balances        5.9%           5.8%          5.8%

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

There were no compensating balances as of December 31, 1999, 1998 and 1997.
-11-
<PAGE>
7. Financial Instruments
The carrying amounts and the estimated fair values, as of December 31, 1999
and 1998, of financial instruments issued or held by the Company are as
follows:


(Thousands of dollars)                  1999        1998
-------------------------------------------------------------------------------
Cumulative preferred stock:
   Carrying amount                $    12,000  $   12,000
   Estimated fair value                11,850      13,020

Long - term debt
   Carrying amount                $   244,842  $  245,148
   Estimated fair value               236,431     255,087
-------------------------------------------------------------------------------

Estimated fair values are based upon quoted market prices for these or
similar securities.

8. Regulatory Assets and Liabilities
Certain costs incurred by Elizabethtown and Mount Holly have been deferred as
regulatory assets and are being amortized over various periods, as set forth
below:

(Thousands of dollars)                             1999          1998
-------------------------------------------------------------------------------
Waste residual management                       $  1,538      $  1,371
Unamortized debt and preferred stock expense       8,900         9,368
Taxes recoverable through future rates (Note 4)   13,466        14,226
Postretirement benefit expense (Notes 9 and 12)    3,145         3,490
Safety management expense                            158           245
Business process redesign                            136           210
Rate case expenses                                    23             7
PWAC underrecovery                                   480           305
-------------------------------------------------------------------------------
Total                                          $  27,846     $  29,222
===============================================================================

Waste Residual Management
The costs of disposing of the byproducts generated by Elizabethtown's and
Mount Holly's water treatment plants are being amortized and recovered in
rates over 3- and 5-year periods, respectively, for ratemaking and financial
statement purposes. No return is being earned on the deferred balances
related to these programs.

Unamortized Debt and Preferred Stock Expenses
Costs incurred in connection with the issuance or redemption of long-term
debt have been deferred and are being amortized and recovered in rates over
the lives of the respective issues for ratemaking and financial statement
purposes. Costs incurred in connection with the issuance and redemption of
preferred stock have been deferred and are being amortized and recovered in
rates over a 10-year period for ratemaking and financial statement purposes.

Other
Safety management expenses and business process redesign expenses relate to
studies undertaken by the Company and are being amortized and recovered in
rates over five years. Rate case expenses are being substantially recovered
in rates during two-year periods.

Purchased Water Adjustment Clause
In 1994 Elizabethtown established a Purchased Water Adjustment Clause
(PWAC), to reflect the cost of water purchased from the New Jersey Water
Supply Authority (NJWSA). The current rate for the PWAC is zero since the
costs of purchased water were reflected in the 1996 rate case; however,
because of the high pumpage in the summers of 1999 and 1998, Elizabethtown
has under-recovered its purchased water costs and therefore, has deferred
$.44 million as of December 31, 1999. As of December 31, 1999, Mount Holly
has deferred $.04 million of PWAC costs (see Note 9).

There were no regulatory liabilities at December 31, 1999 or 1998.
-12-
<PAGE>
9. Regulatory Matters
Elizabethtown
In December 1997 the BPU adopted a Stipulation for rate increases for
Elizabethtown and Mount Holly, effective January 1, 1998, for the full
recovery of costs associated with SFAS No. 106 "Accounting for Employer's
Postretirement Benefits" on an accrual basis less the costs associated with
SFAS No. 106 expenses previously recovered in rates. The total increases in
annual operating revenues resulting from these Stipulations were $.39 million
for Elizabethtown and $.02 million for Mount Holly.

In accordance with the terms of the pending Merger Agreement, Elizabethtown
will postpone filing for rate relief until at least August 2000.

Mount Holly
In 1998 Mount Holly commenced a construction project, called the Mansfield
Project, to comply with New Jersey legislative restrictions to obtain
alternative water supplies, thereby reducing its water pumpage from an
aquifer, which had been subject to over-pumping by Mount Holly and various
local purveyors in a portion of southern New Jersey. A portion of this
project was placed into service in the third quarter of 1998 and the
remaining portion of the project was placed into service in late December
1999.

To settle an appeal initiated by another water purveyor in 1995 concerning
the diversion rights for the Mansfield Project, Mount Holly signed a
Stipulation in 1997 with the purveyor, the New Jersey Department of
Environmental Protection (DEP) and other parties, requiring Mount Holly to
purchase one million gallons per day from the other purveyor during the
two-year period that the Mansfield Project was being constructed. Purchases
began during March of 1998, after completion of an interconnection and ended
in January 2000 shortly after the Mansfield Project went into service.

In September 1997 Mount Holly filed a petition with the BPU to establish a
Purchased Water Adjustment Clause (PWAC) to reflect the cost of  water
purchased from the other purveyor under the aforementioned agreement.  In May
1998 the BPU adopted a Stipulation signed by the parties to the PWAC case
for an increase in annual revenues under Mount Holly's PWAC of $1.3 million
or 38.9%.

Effective January 1, 2000, Mount Holly received an increase in annual rates
of $1.88 million. This increase included costs for Mount Holly's Mansfield
Project that was placed in service at the end of December 1999. The rate
decision also reflected the elimination of the PWAC. After the elimination of
the PWAC the net rate increase was $.51 million. This increase also reflects
additional construction and financing costs, as well as increases in
operating costs since base rates were last established in January 1996.

In June 1999 Mount Holly purchased Homestead Water Utility, Inc. for a cash
price of $.9 million. The entity provides water services to approximately 800
customers of the Homestead community in southern New Jersey. The transaction
was accounted for as a purchase. Had the acquisition been consummated as of
January 1, 1997, the pro-forma effect on revenues and net income for the
years ended December 31, 1999, 1998 and 1997 would be immaterial.

10. Other Events
In August 1999 the Governor of the State of New Jersey declared a  "Water
Emergency" for the entire state and issued mandatory restrictions on outdoor,
nonessential water use. Due to unusually low levels of rainfall during June
and July the Governor deemed these measures necessary to preserve the
integrity of several of the state's reservoir and well supplies. Customers of
Elizabethtown and Mount Holly were subject to these restrictions. The water
systems at all times had, and continue to have, adequate supplies of water to
meet the needs of their customers. These restrictions affected the amount of
water consumed by a substantial number of Elizabethtown's customers and
reduced net income by approximately $.68 million. The restrictions were
lifted in October 1999.
-13-
<PAGE>
In September 1999, Elizabethtown  withdrew its primary water treatment plant,
the Raritan-Millstone Water Treatment Plant (Plant), from service as a result
of flooding from Tropical Storm Floyd (Floyd). For several days,
Elizabethtown had difficulty maintaining adequate water pressure in portions
of its distribution system because overall system production levels were
substantially less than normal. Customers in portions of a few municipalities
were without water service for a period of up to three days. Costs incurred
to repair and replace equipment damaged by the flood and to respond to
inquiries by customers, regulatory bodies and the media have been deferred
and are expected to be recoverable through insurance. The Company has
incurred $7.0 million of flood-related expenditures and has received an
advanced reimbursement of $2.0 million from its insurance carrier. The
remaining $5.0 million of flood-related expenditures is reported on the
Consolidated Balance Sheets as a deferred charge at December 31, 1999. The
loss of revenues due to below normal water consumption is not recoverable
through insurance (see Note 11 for legal matters related to Floyd).  The loss
of revenues decreased net income by $.39 million.

11. Commitments and  Contingent Liabilities
Elizabethtown is obligated, under a contract that expires in 2013, to
purchase from the New Jersey Water Supply Authority (NJWSA) a minimum of 37
billion gallons of water annually. Effective July 1, 1999, the annual cost of
water under contract is $7.63 million. The Company purchases additional water
from the NJWSA on an as-needed basis. The total cost of water purchased from
the NJWSA was $9.03 million for 1999.

Mount Holly was obligated, under a contract, to purchase water from another
purveyor, at a rate of 1 million gallons per day until such time as the
Mansfield Project was completely in service. In mid-January 2000, Mount Holly
ceased purchasing water from the other purveyor. The annual cost of the
purchased water was $1.16 million.

Capital expenditures of Elizabethtown and Mount Holly are estimated to be
$135.14 million and $4.69 million, respectively, through 2002.

Expected future minimum rental payments required under noncancelable leases
with terms in excess of one year at December 31 of each of the years 2000
through 2004 are: 2000, $.77 million; 2001, $.81 million; 2002 $.82 million;
2003, $.62 million and 2004, none. Rent expense totaled $.77 million, $.73
million and $.72 million in 1999, 1998 and 1997, respectively.

Elizabethtown leases vehicles and certain office equipment. The minimum
payments required under noncancelable leases with terms in excess of one year
at December 31 of each of the years 2000 through 2004 are: $1.64 million per
year. The lease expense was $1.37 million and $.26 million for 1999 and 1998,
respectively. There were no lease expenses for 1997 as vehicles were not
leased during that year.

Environmental, Legal and Other Matters
On September 23, 1999, two parties filed separate class action lawsuits for
compensatory damages and related fees on behalf of themselves and similarly
situated residential and commercial customers against Elizabethtown Water
Company and certain other subsidiaries of E'town. The lawsuit alleges negligence
regarding the quantity and quality of water services during the period in
September 1999 when Elizabethtown's main water treatment plant was flooded from
Tropical Storm Floyd and was withdrawn from service for approximately 3 days.
Elizabethtown has notified its insurance carrier of the lawsuit and has filed a
motion for summary judgment to dismiss the lawsuit as a class action proceeding
prior to answering the allegations. In March 2000, the New Jersey Superior Court
(NJSC) ruled that in the event the lawsuit is not dismissed, the case be
referred to the New Jersey Board of Public Utilities (BPU) for purposes of
investigating the matter and reporting its findings to the NJSC. The NJSC, in
view of the BPU's findings, will then determine what, if any, damages were
suffered by the plaintiffs and what liability, if any, rests with Elizabethtown.
The Company maintains that such allegations are without merit and believes that
the plaintiffs'chances of prevailing are not significant.

There are environmental matters that are inherent in the production,
transmission and distribution of water as well as in the treatment of
wastewater. Elizabethtown and Mount Holly are sensitive to these issues and
mitigate the environmental impact of these activities to the extent required
by the laws and regulations under which these activities are governed  and
make efforts to exceed the regulatory requirements where practical.

The Company, in the ordinary course of business, periodically becomes
involved in litigation. There is currently no litigation in progress, other
than the items discussed above, regarding environmental or other issues in
which an outcome adverse to the Company could have a material impact on the
financial statements.
-14-
<PAGE>
12. Pension Plan and Other Postretirement Benefits
Pension Plan
Elizabethtown has a trusteed, noncontributory Retirement Plan (Plan), which
covers most employees of Elizabethtown and Mount Holly. The Plan provides for
annual benefits at retirement equal to 1.6% of the average compensation for
the highest four consecutive years, multiplied by the number of years of
credited service.

Supplemental Pension Plan
The Company also has a supplemental retirement plan for certain management
employees that is not funded. Eligibility for the designated employees is
based upon their completion of twenty years of service. Payments are based
upon 60% of the average compensation of an eligible management employee's
last three years of service, net of the amount earned under the Plan.
Benefits are payable for a period of 15 years and payments are made directly
by the Company. In 1999, the supplemental compensation plan was amended to
change the definition of compensation to include incentive compensation and
other taxable benefits. The unfunded benefit obligation at December 31, 1999
and 1998 was $2.1 million and $1.5 million, respectively.

Other Postretirement Benefits
The Company provides certain health care and life insurance benefits for
substantially all of its retired employees. As a result of a contract
negotiated in February 1996 with the Company's bargaining unit, all union and
non-union employees retiring after January 1, 1997, pay 25% of future
increases in the premiums the Company pays for postretirement medical
benefits.

Under SFAS No. 106, the costs of postretirement benefits are accrued for each
year the employee renders service, based on the expected cost of providing
such benefits to the employee and the employee's beneficiaries and covered
dependents, rather than expensing these benefits on a pay-as-you-go basis.

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation as of December 31, 1999, and for 1999 was
9%. This rate decreases linearly each successive year until it reaches 3.8% in
2008, after which the rate remains constant.

The rate increases effective January 1, 1998 allow for the full recovery of
costs associated with the implementation of SFAS No. 106, including an
amortization over 15 years of amounts previously deferred which were in
excess of amounts previously being recovered in rates. As of December 31,
1999, the unamortized amounts that remain deferred are $3.02 million and $.13
million for Elizabethtown and Mount Holly, respectively.

                                                            Other Postretirement
                                             Pension Plans          Benefits
(Thousands of Dollars)                      1999      1998       1999      1998
-------------------------------------------------------------------------------
Funded Status
Change in benefit obligation during year:
 Benefit obligation at beginning of year $ 45,538  $ 40,172  $  7,877  $  6,556
   Service cost                             1,653     1,391       238       387
   Interest cost                            3,083     2,836       426       482
   Benefit payments                        (2,255)   (2,092)     (238)     (247)
   Actuarial (gain) or loss                (5,539)    3,231    (2,345)      699
   Plan amendments                            650
-------------------------------------------------------------------------------
Benefit obligation at end of year          43,130    45,538     5,958     7,877
-------------------------------------------------------------------------------
Change in plan assets during year:
 Fair value of plan assets at
  beginning of year                        51,844    46,537     2,171     1,331
   Employer contributions                     161       174       879       978
   Benefit payments                        (2,255)   (2,092)     (238)     (247)
   Actual return on plan assets             9,751     7,225       286       109
-------------------------------------------------------------------------------
Fair value of plan assets at end of year   59,501    51,844     3,098     2,171
-------------------------------------------------------------------------------
Reconciliation of funded status
 at end of year:
  Funded status                            16,371     6,306    (2,860)   (5,706)
  Unrecognized net transition (asset)
   or obligation                           (1,091)   (1,358)    4,699     5,061
  Unrecognized prior service cost           2,708     2,391
  Unrecognized net (gain) or loss         (18,227)   (7,577)   (4,999)   (3,064)
-------------------------------------------------------------------------------
 Accumulated postretirement benefits*    $   (239) $   (238) $ (3,160) $ (3,709)
-------------------------------------------------------------------------------
* Recognized in the Consolidated Balance Sheets

-15-
<PAGE>
<TABLE>
<CAPTION>
                                                                                Other Postretirement
                                                         Pension Plans                  Benefits
(Thousands of Dollars)                              1999      1998      1997      1999    1998     1997
-------------------------------------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>        <C>      <C>     <C>
Net periodic benefit cost recognized for year
 Service cost                                   $  1,653  $  1,391  $  1,302   $   238  $  387  $   383
 Interest cost                                     3,083     2,836     2,713       426     482      444
 Expected return on plan assets                   (4,564)   (4,101)   (3,520)     (186)   (109)     (57)
 Net amortization and deferral                       (12)     (155)       65       164     157      138
 Deferral/amortization of regulated companies                                      249     247     (273)
-------------------------------------------------------------------------------------------------------
   Net periodic benefit cost                         160       (29)      560       891   1,164      635
-------------------------------------------------------------------------------------------------------
Weighted - average assumptions for year
 Discount rate                                      6.75%     7.25%     7.50%     6.75%    7.25%   7.50%
 Rate of compensation increases                     3.50%     4.00%     4.00%
 Expected long-term rate of return on plan assets   9.00%     9.00%     9.00%     9.00%    9.00%   9.00%
Weighted - average assumptions at end of year
 Discount rate                                      7.75%     6.75%     7.25%     7.75%    6.75%   7.25%
 Rate of compensation increases                     3.50%     4.00%     4.00%
------------------------------------------------------------------------------------------------------
</TABLE>

13.  Related Party Transactions
Utility Billing Services, Inc., a subsidiary of NUI Corporation, of which a
Director of Elizabethtown is Chairman of the Board and a Director, provides data
processing and related services to Elizabethtown and Mount Holly. The charges
for all services totaled $.86 million, $.72 million, and $.67 million, for 1999,
1998 and 1997, respectively. The current contract expires December 31, 2000.

A Director of Elizabethtown is also a Director of Summit Bank. Elizabethtown
paid Summit Bank to serve as a bond trustee for Elizabethtown for fees of
less than $.10 million in 1999, 1998 and 1997.

14. Quarterly Financial Data (Unaudited)
A summary of financial data for each quarter of 1999 and 1998 follows:

                                                           Earnings
                                                          Applicable
               Operating     Operating       Net          to Common
Ouarter         Revenues      Income       Income           Stock
-------------------------------------------------------------------------------
                          (Thousands of Dollars)
1999
1st             $  31,066     $  8,017     $  4,283     $    4,080
2nd                35,509        9,967        6,343          6,140
3rd                39,204       11,772        7,880          7,677
4th                32,527        7,298        2,899          2,695
-------------------------------------------------------------------------------
Total           $ 138,306     $ 37,054     $ 21,405     $   20,592
===============================================================================

1998
1st             $  30,507     $  8,402     $  4,645     $    4,442
2nd                32,739        9,334        5,687          5,484
3rd                38,821       12,226        8,689          8,486
4th                32,780        9,636        5,747          5,543
-------------------------------------------------------------------------------
Total           $ 134,847     $ 39,598     $ 24,768     $   23,955
===============================================================================

Water utility revenues are subject to seasonal fluctuation due to normal
increased water consumption during the third quarter of each year.

Net income in the fourth quarter of 1999 was impacted by certain significant
operation costs, including labor and power costs indirectly attributable to a
major flood at Elizabethtown's primary water treatment plant.
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