FORM 10-Q


               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549


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

                               OR

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

       For the transition period from January 1, 1997 to March 31, 1997

                  Commission file number 1-3571


                  LONG ISLAND LIGHTING COMPANY

       Incorporated pursuant to the Laws of New York State


Internal Revenue Service - Employer Identification No. 11-1019782


      175 East Old Country Road, Hicksville, New York 11801
                         (516) 755-6650

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


The total  number of shares of the  registrant's  Common  Stock,  $5 par  value,
outstanding on March 31, 1997, was 120,987,330.




<PAGE>




                    LONG ISLAND LIGHTING COMPANY






                                                                  Page No.

Part I - FINANCIAL INFORMATION

     Item 1.  Financial Statements

                   Statement of Income                                   3

                   Balance Sheet                                         4

                   Statement of Cash Flows                               6

                   Notes to Financial Statements                         7

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


Part II - OTHER INFORMATION

     Item 1.  Legal Proceedings                                         23

     Item 2.  Changes in Securities                                     23

     Item 3.  Defaults Upon Senior Securities                           23

     Item 4.  Submission of Matters to a Vote
              of Security Holders                                       23

     Item 5.  Other Information                                         23

     Item 6.  Exhibits and Reports on Form 8-K                          24

     Signature                                                          25






                                      -2-



<PAGE>
<TABLE>
<CAPTION>

                          LONG ISLAND LIGHTING COMPANY
                               STATEMENT OF INCOME
                                   (UNAUDITED)
                (Thousands of Dollars - except per share amounts)

                                                          Three Months Ended
                                                               March 31
                                                      ---------------------------
                                                           1997           1996
                                                      ---------------------------
<S>                                                      <C>            <C>
REVENUES
Electric                                                 $557,791       $559,268
Gas                                                       293,391        304,946
                                                      ------------   ------------
Total Revenues                                            851,182        864,214
                                                      ------------   ------------

EXPENSES
Operations - fuel and purchased power                     301,867        310,269
Operations - other                                         95,673        103,869
Maintenance                                                29,340         30,488
Depreciation and amortization                              38,561         37,565
Base financial component amortization                      25,243         25,243
Rate moderation component amortization                      5,907        (15,326)
Regulatory liability component amortization               (22,143)       (22,143)
Other regulatory amortization                              12,218         27,212
Operating taxes                                           117,513        120,028
Federal income tax - current                               23,378         12,838
Federal income tax - deferred and other                    33,624         43,750
                                                      ------------   ------------
Total Expenses                                            661,181        673,793
                                                      ------------   ------------
OPERATING INCOME                                          190,001        190,421
                                                      ------------   ------------

OTHER INCOME AND (DEDUCTIONS)
Rate moderation component carrying charges                  5,919          5,900
Class Settlement                                           (4,496)        (5,372)
Other income and deductions, net                              645          5,920
Allowance for other funds used during construction            717            719
Federal income tax - deferred and other                       789          2,451
                                                      ------------   ------------
Total Other Income and (Deductions)                         3,574          9,618
                                                      ------------   ------------
INCOME BEFORE INTEREST CHARGES                            193,575        200,039
                                                      ------------   ------------

INTEREST CHARGES AND (CREDITS)
Interest on long-term debt                                 90,168        102,256
Other interest                                             16,659         16,971
Allowance for borrowed funds used during construction        (949)          (941)
                                                      ------------   ------------
Total Interest Charges and (Credits)                      105,878        118,286
                                                      ------------   ------------

NET INCOME                                                 87,697         81,753
Preferred stock dividend requirements                      12,969         13,071
                                                      ------------   ------------
EARNINGS FOR COMMON STOCK                                 $74,728        $68,682
                                                      ============   ============
AVERAGE COMMON SHARES OUTSTANDING (000)                   120,995        119,944

EARNINGS PER COMMON SHARE                                   $0.62          $0.57

DIVIDENDS DECLARED PER COMMON SHARE                        $0.445         $0.445
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.


                                     - 3 -






<PAGE>
<TABLE>
<CAPTION>



                          LONG ISLAND LIGHTING COMPANY
                                  BALANCE SHEET
                             (Thousands of Dollars)

                                                        March 31           December 31
                                                          1997                 1996
ASSETS                                                 (unaudited)          (audited)
                                                      --------------      ---------------
<S>                                                     <C>                  <C>  
UTILITY PLANT
Electric                                                 $3,900,264           $3,882,297
Gas                                                       1,171,183            1,154,543
Common                                                      263,267              260,268
Construction work in progress                               108,850              112,184
Nuclear fuel in process and in reactor                       15,503               15,454
                                                      --------------      ---------------
                                                          5,459,067            5,424,746
                                                      --------------      ---------------
Less - Accumulated depreciation and
  amortization                                            1,759,110            1,729,576
                                                      --------------      ---------------
Total Net Utility Plant                                   3,699,957            3,695,170
                                                      --------------      ---------------

REGULATORY ASSETS
Base financial component (less accumulated
  amortization of $782,525 and $757,282)                  3,256,305            3,281,548
Rate moderation component                                   409,512              402,213
Shoreham post-settlement costs                              996,270              991,795
Shoreham nuclear fuel                                        68,581               69,113
Unamortized cost of issuing securities                      187,309              194,151
Postretirement benefits other than pensions                 357,668              360,842
Regulatory tax asset                                      1,767,164            1,772,778
Other                                                       200,137              199,879
                                                      --------------      ---------------
Total Regulatory Assets                                   7,242,946            7,272,319
                                                      --------------      ---------------

                                                      --------------      ---------------
NONUTILITY PROPERTY AND OTHER INVESTMENTS                    18,870               18,597
                                                      --------------      ---------------

CURRENT ASSETS
Cash and cash equivalents                                    64,539              279,993
Special deposits                                             37,631               38,266
Customer accounts receivable (less allowance
  for doubtful accounts of $23,675 and $25,000)             305,436              255,801
Other accounts receivable                                    42,946               65,764
Accrued unbilled revenues                                   141,389              169,712
Materials and supplies at average cost                       55,454               55,789
Fuel oil at average cost                                     49,703               53,941
Gas in storage at average cost                               10,893               73,562
Deferred tax asset                                           93,349              145,205
Prepayments and other current assets                          8,805                8,569
                                                      --------------      ---------------
Total Current Assets                                        810,145            1,146,602
                                                      --------------      ---------------

                                                      --------------      ---------------
DEFERRED CHARGES                                             77,656               76,991
                                                      --------------      ---------------

TOTAL ASSETS                                            $11,849,574          $12,209,679
                                                      ==============      ===============

</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.




                                                             - 4 -


<PAGE>
                          LONG ISLAND LIGHTING COMPANY
                                  BALANCE SHEET
                             (Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                   March 31           December 31
                                                                     1997                 1996
CAPITALIZATION AND LIABILITIES                                    (unaudited)          (audited)
                                                                 --------------      ---------------

<S>                                                                <C>                  <C>
CAPITALIZATION
Long-term debt                                                      $4,471,675           $4,471,675
Unamortized discount on debt                                           (14,628)             (14,903)
                                                                 --------------      ---------------
                                                                     4,457,047            4,456,772
                                                                 --------------      ---------------

Preferred stock - redemption required                                  638,500              638,500
Preferred stock - no redemption required                                63,598               63,664
                                                                 --------------      ---------------
Total Preferred Stock                                                  702,098              702,164
                                                                 --------------      ---------------

Common stock                                                           605,022              603,921
Premium on capital stock                                             1,131,576            1,127,971
Capital stock expense                                                  (48,915)             (49,330)
Retained earnings                                                      861,751              840,867
Treasury stock, at cost                                                   (385)                 (60)
                                                                 --------------      ---------------
Total Common Shareowners' Equity                                     2,549,049            2,523,369
                                                                 --------------      ---------------

                                                                 --------------      ---------------
Total Capitalization                                                 7,708,194            7,682,305
                                                                 --------------      ---------------

REGULATORY LIABILITIES
Regulatory liability component                                         178,558              198,398
1989 Settlement credits                                                125,138              127,442
Regulatory tax liability                                               100,377              102,887
Other                                                                  158,660              139,510
                                                                 --------------      ---------------
Total Regulatory Liabilities                                           562,733              568,237
                                                                 --------------      ---------------

CURRENT LIABILITIES
Current maturities of long-term debt                                     1,000              251,000
Current redemption requirements of preferred stock                       1,050                1,050
Accounts payable and accrued expenses                                  230,189              289,141
LRPP payable                                                            40,499               40,499
Accrued taxes (including federal income tax of $49,262 and $25,884)     51,157               63,640
Accrued interest                                                       143,983              160,615
Dividends payable                                                       58,474               58,378
Class Settlement                                                        58,333               55,833
Customer deposits                                                       29,173               29,471
                                                                 --------------      ---------------
Total Current Liabilities                                              613,858              949,627
                                                                 --------------      ---------------

DEFERRED CREDITS
Deferred federal income tax                                          2,420,443            2,442,606
Class Settlement                                                        89,487               98,497
Other                                                                   20,889               39,447
                                                                 --------------      ---------------
Total Deferred Credits                                               2,530,819            2,580,550
                                                                 --------------      ---------------

OPERATING RESERVES
Pensions and other postretirement benefits                             387,048              381,996
Claims and damages                                                      46,922               46,964
                                                                 --------------      ---------------
Total Operating Reserves                                               433,970              428,960
                                                                 --------------      ---------------

COMMITMENTS AND CONTINGENCIES                                          -                   -
                                                                 --------------      ---------------

TOTAL CAPITALIZATION AND LIABILITIES                               $11,849,574          $12,209,679
                                                                 ==============      ===============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.
                                                             - 5 -



<PAGE>

<TABLE>
<CAPTION>

                          LONG ISLAND LIGHTING COMPANY
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                             (Thousands of Dollars)

                                                       Three Months Ended
                                                            March 31
                                                    -------------------------
                                                          1997         1996
                                                    -------------------------
<S>                                                    <C>          <C>
OPERATING ACTIVITIES

Net Income                                              $87,697      $81,753
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
      CASH PROVIDED BY OPERATING ACTIVITIES
  Provision for doubtful accounts                         4,821        4,828
  Depreciation and amortization                          38,561       37,565
  Base financial component amortization                  25,243       25,243
  Rate moderation component amortization                  5,907      (15,326)
  Regulatory liability component amortization           (22,143)     (22,143)
  Other regulatory amortization                          12,218       27,212
  Rate moderation component carrying charges             (5,919)      (5,900)
  Class Settlement                                        4,496        5,372
  Amortization of cost of issuing and redeeming 
      securities                                          8,087        9,486
  Federal income tax - deferred and other                32,835       41,299
  Allowance for other funds used during construction       (717)        (719)
  Gas Cost Adjustment                                    (7,891)      19,190
  Other                                                  24,485       15,542
CHANGES IN OPERATING ASSETS AND LIABILITIES
  Accounts receivable                                   (31,638)      (3,992)
  Accrued unbilled revenues                              28,323       35,772
  Materials and supplies, fuel oil and gas in storage    67,242       43,702
  Accounts payable and accrued expenses                 (58,952)     (31,997)
  Accrued taxes                                         (12,483)     (10,249)
  Class Settlement                                      (11,006)      (5,366)
  Other                                                 (29,599)     (12,241)
                                                    ------------ ------------
Net Cash Provided by Operating Activities               159,567      239,031
                                                    ------------ ------------

INVESTING ACTIVITIES

Construction and nuclear fuel expenditures              (50,375)     (44,189)
Shoreham post-settlement costs                          (12,104)     (15,798)
Other                                                       160       (1,206)
                                                    ------------ ------------
Net Cash Used in Investing Activities                   (62,319)     (61,193)
                                                    ------------ ------------

FINANCING ACTIVITIES

Proceeds from sale of common stock                        4,640        4,672
Redemption of long-term debt                           (250,000)           0
Preferred stock dividends paid                          (12,969)     (13,072)
Common stock dividends paid                             (53,749)     (53,247)
Other                                                      (624)        (359)
                                                    ------------ ------------
Net Cash Used in Financing Activities                  (312,702)     (62,006)
                                                    ------------ ------------
Net (Decrease) Increase in Cash and Cash Equivalents  ($215,454)    $115,832
                                                    ============ ============
Cash and cash equivalents at January 1                 $279,993     $351,453
Net (Decrease) Increase in Cash and Cash Equivalents   (215,454)     115,832
                                                    ------------ ------------
Cash and Cash Equivalents at March 31                   $64,539     $467,285
                                                    ============ ============

SUPPLEMENTARY INFORMATION
   Interest paid, before reduction for the allowance
      for borrowed funds used during construction      $112,981     $115,711
   Federal income tax - paid                                 $0          $50

</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS.


                                      - 6-



<PAGE>



                         NOTES TO FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED MARCH 31, 1997
                                  (UNAUDITED)


NOTE 1. BASIS OF PRESENTATION

These Notes to Financial  Statements  reflect  events  subsequent to January 31,
1997,  the date of the most recent Report of Independent  Auditors,  through the
date of this Transition Report on Form 10-Q for the three months ended March 31,
1997.  These Notes to Financial  Statements  should be read in conjunction  with
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations for the three months ended March 31, 1997,  and the Company's  Annual
Report on Form 10-K/A, for the Year Ended December 31, 1996, incorporated herein
by reference.

The financial  statements  furnished are unaudited.  However,  in the opinion of
management,  the financial  statements  include all  adjustments,  consisting of
normal recurring  accruals,  necessary for a fair  presentation of the financial
statements for the three month period presented. Operating results for the three
month  period are not  necessarily  indicative  of results to be expected for an
entire year, due to seasonal, operating and other factors.

Certain prior year amounts have been  reclassified to be consistent with current
year presentation.

NOTE 2.  LONG ISLAND POWER AUTHORITY PROPOSED TRANSACTION

On April 30, 1997, the Long Island Power Authority  (LIPA)  submitted to the New
York State Public Authorities  Control Board for approval,  unexecuted copies of
agreements  related to LIPA's  proposed  acquisition  (via the  purchase  of the
Company's common stock) of the Company's  transmission  and distribution  system
and certain other assets and  liabilities  (LIPA  Transaction).  Prior to LIPA's
acquisition of the common stock, the Company's gas assets,  electric  generating
facility assets and certain other assets and liabilities  will be transferred to
affiliates of the holding  company to be formed in  connection  with the binding
share exchange with Brooklyn Union Gas Company (Brooklyn Union).

While the specific allocation of assets and liabilities has not yet been finally
determined, it is currently contemplated that the holding company would, subject
to obtaining all required  consents,  assume the Company's (i) 7.30%  Debentures
due July 15, 1999; (ii) 8.20% Debentures due March 15, 2023; and (iii) Preferred
Stock,  7.95%,  Series  AA.  It  is  also  contemplated  that  each  issued  and
outstanding  share of preferred stock of the Company that is subject to optional
redemption at or before the closing of the LIPA  Transaction  will be called for
redemption by the Company no later than the date of the closing. Each issued

                                   - 7 -

<PAGE>



and outstanding  share of preferred stock of the Company not subject to optional
redemption  (other than the Series AA) will,  subject to obtaining  all required
consents,  be acquired by the Company for cash pursuant to the terms of the LIPA
Transaction agreements.

The Company is unable to determine when or if the agreements related to the LIPA
Transaction  will be  executed  by the  parties or when or if all  consents  and
approvals  required to consummate  the LIPA  Transaction  will be obtained.  For
additional  information concerning the LIPA Transaction and the proposed binding
share exchange with Brooklyn Union, see the Company's Form 8-K/A dated March 24,
1997 and Form 8-K dated December 30, 1996, respectively.

NOTE 3. RATE MATTERS

During  1996,  the  Public  Service  Commission  of the State of New York  (PSC)
instituted numerous initiatives intended to lower electric rates on Long Island,
including:

      An Order to Show  Cause,  issued in  February  1996,  to  examine  various
      opportunities to reduce the Company's electric rates;

      An Order  issued in April 1996,  expanding  the scope of the Order to Show
      Cause  proceeding in an effort to provide  "immediate and substantial rate
      relief."

      An Order,  issued in July 1996, to institute an expedited  temporary  rate
      phase in the Order to Show Cause  proceeding  to be  conducted in parallel
      with the ongoing phase concerning permanent rates.

As a result of the Order issued in April 1996, the Company,  in September  1996,
filed  financial and other  information  sufficient to provide a legal basis for
the PSC to set new rates for both the single rate year (1997) and the three-year
rate period 1997 through 1999.

As of the date of this report,  the PSC has yet to render a decision or take any
action with respect to this filing.

BROOKLYN UNION TRANSACTION

On March 14, 1997,  the Company and Brooklyn  Union filed a joint  petition with
the PSC  requesting  approval of the proposed  merger of the two  companies  and
certain related matters. The petition proposes, among other matters, that 93% or
$1.0 billion of the estimated total efficiency savings attributable to operating
synergies that are expected to be realized over the 10 year period following the
merger, be allocated to ratepayers and the

                                   - 8 -

<PAGE>



remaining  7% or $73  million be  allocated  to  shareholders.  The  ratepayers'
portion  will be  allocated to both  utilities'  customers  and will reduce both
electric and gas rates by an estimated 2% for the 10 year period  following  the
closing of the merger.  To  accomplish  this,  the base rates of both  utilities
would be reduced  immediately  following  the closing to reflect  the  levelized
annual amount of the non-fuel related synergy savings  forecasted to materialize
over this  period.  Fuel  related  synergy  savings  will be passed  back to the
ratepayers through a reduction in the respective fuel adjustment clauses as they
are  achieved.  The Company will be required to amend its petition to the PSC in
order to reflect certain aspects of the transaction currently  contemplated with
LIPA. The petition also requests the PSC's approval of the following:

            o     The formation of a holding  company and the exchange of shares
                  of common  stock  between  the two  utilities  and the holding
                  company in order to effectuate the merger.

            o     Continuation of the Brooklyn Union holding company
                  agreement previously approved by the PSC but
                  modified to include LILCO under its terms and
                  elimination of certain restrictions on dividend
                  payments, debt-to-equity ratio maintenance levels,
                  the level of investment in unregulated businesses,
                  and relationships between the utilities and their
                  unregulated affiliates.

            o     The formation of an unregulated  corporate services subsidiary
                  to  perform  functions  common  to both  utilities  and  their
                  affiliates such as accounting and finance, human resources and
                  corporate planning to attain synergy savings.

            o     LILCO's multi-year electric rate plan as filed in
                  September 1996.

            o     The continuation of Brooklyn Union's currently
                  approved multi-year gas rate plan without
                  modification.

            o     The proposal to establish a synergy savings  balancing account
                  to enable the utilities to reduce rates immediately for future
                  non-fuel synergy savings without adversely affecting earnings.

            o     LILCO's proposed multi-year gas rate plan for
                  freezing base rates through the year 2001.


                                   - 9 -

<PAGE>



THE FEDERAL ENERGY REGULATORY COMMISSION FILING

In March 1997, in connection with the proposed Brooklyn Union merger the Company
filed an  application  with the  Federal  Energy  Regulatory  Commission  (FERC)
seeking  approval of the  transfer of the  Company's  common  equity and certain
FERC-jurisdictional  assets to the holding company  contemplated to be formed to
effectuate the merger with Brooklyn Union. The Company's  application  explained
how the proposal  meets the three major  concerns of the FERC merger  guidelines
which are that the transfer  must have no adverse  effect on rates,  competition
and regulation.

All  interested  parties will have sixty days from  publication of notice in the
Federal Register to intervene and/or protest.  Thereafter,  the FERC will decide
on the need for evidentiary  hearings  (beginning with settlement  negotiations)
and a procedural schedule.

The  Company  will be  required  to amend its  petition  to the FERC in order to
reflect certain aspects of the transaction currently contemplated with LIPA.

NOTE 4.  CAPITALIZATION

In February  1997,  the Company  retired $250  million of General and  Refunding
Bonds at maturity.  The Company  satisfied this obligation with cash on hand and
by utilizing  interim  financing of $30 million  obtained  through its Revolving
Credit  Agreement  (RCA).  The Company  repaid this  short-term RCA borrowing in
March 1997. Accordingly,  no amounts were outstanding under the RCA at March 31,
1997.

NOTE 5. RETIREMENT BENEFIT PLANS

PENSION PLANS

The Company maintains a defined benefit pension plan which covers  substantially
all employees (Primary Plan).

PRIMARY PLAN

The Company's  funding  policy is to  contribute  annually to the Primary Plan a
minimum  amount  consistent  with the  requirements  of the Employee  Retirement
Income Security Act of 1974 plus such additional amounts, if any, as the Company
may determine to be appropriate  from time to time.  Pension  benefits are based
upon years of participation in the Primary Plan and compensation.


                                   - 10 -

<PAGE>


<TABLE>
<CAPTION>

The Primary Plan's funded status and amounts  recognized on the Balance Sheet at
March 31, 1997 and December 31, 1996 were as follows:

                                                       (In thousands of dollars)
--------------------------------------------------------------------------------
                                                           1997          1996
--------------------------------------------------------------------------------
<S>                                                    <C>            <C>
Actuarial present value of benefit obligation
  Vested benefits                                      $ 642,392      $ 547,002
  Nonvested benefits                                      57,960         55,157
--------------------------------------------------------------------------------
Accumulated Benefit Obligation                         $ 700,352      $ 602,159
================================================================================
Plan assets at fair value                              $ 744,400      $ 746,400
Actuarial present value of projected
  benefit obligation                                     807,703        689,661
--------------------------------------------------------------------------------
Projected benefit obligation less
  than plan assets                                       (63,303)        56,739
Unrecognized net obligation                               69,399         71,085
Unrecognized net gain                                     (1,605)      (123,759)
--------------------------------------------------------------------------------
Net Prepaid Pension Cost                               $   4,491      $   4,065
================================================================================
</TABLE>

<TABLE>
<CAPTION>
Periodic  pension  cost for the Primary Plan for the period ended March 31, 1997
and  Year  Ended  December  31,  1996,  respectively,   included  the  following
components:

                                                       (In thousands of dollars)
--------------------------------------------------------------------------------
                                                             1997        1996
--------------------------------------------------------------------------------
<S>                                                      <C>          <C>
Service cost - benefits
  earned during the period                               $  4,645     $  17,384
Interest cost on projected benefit
  obligation and service cost                              12,494        47,927
Actual return on plan assets                               (3,694)      (81,165)
Net amortization and deferral                              (9,446)       33,541
--------------------------------------------------------------------------------
Net Periodic Pension Cost                                $  3,999     $  17,687
================================================================================
</TABLE>


<TABLE>
<CAPTION>
Assumptions used in accounting for the Primary Plan were as follows:

--------------------------------------------------------------------------------
                                                               1997       1996
--------------------------------------------------------------------------------
<S>                                                            <C>        <C>  
Discount rate                                                  7.25%      7.25%
Rate of future compensation increases                          5.00%      5.00%
Long-term rate of return on assets                             7.50%      7.50%
--------------------------------------------------------------------------------
</TABLE>

The Primary Plan assets at fair value  include  cash,  cash  equivalents,  group
annuity contracts, bonds and equity securities.

As of March 31, 1997,  the Company  revised  actuarial  assumptions  relating to
mortality and the use of a 7.00% discount rate,  which changed the present value
of the accrued benefit. In accordance with the PSC Order,

                                   - 11 -

<PAGE>



which was  effective  in 1993,  "Statement  of Policy and Order  Concerning  the
Accounting and  Ratemaking  Treatment for Pensions and  Postretirement  Benefits
Other than  Pensions"  these  assumption  changes are amortized  over a ten-year
period and will be reflected ratably in pension expense during that period.

As of April 1, 1997, the Company  intends to change the long-term rate of return
on assets to 7.00%.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

In addition to providing pension benefits,  the Company provides certain medical
and life  insurance  benefits for retired  employees.  Substantially  all of the
Company's  employees  may  become  eligible  for these  benefits  if they  reach
retirement age after working for the Company for a minimum of five years.  These
and similar  benefits  for active  employees  are  provided by the Company or by
insurance  companies  whose  premiums are based on the benefits  paid during the
year. In addition,  the Company is required to recognize any net gains or losses
over a ten-year period.

Accumulated  postretirement  benefit obligation other than pensions at March 31,
1997 and December 31, 1996 were as follows:
<TABLE>
<CAPTION>
                                                         (In thousands of dollars)
--------------------------------------------------------------------------------
                                                        1997               1996
--------------------------------------------------------------------------------
<S>                                               <C>                <C>        
Retirees                                          $   169,655        $   156,181
Fully eligible plan participants                       62,491             56,950
Other active plan participants                        183,526            152,627
--------------------------------------------------------------------------------
Accumulated postretirement
  benefit obligation                              $   415,672        $   365,758
Plan assets                                            80,533             74,692
--------------------------------------------------------------------------------
Accumulated postretirement benefit
  obligation in excess of plan assets                 335,139            291,066
Unrecognized prior service cost                          (185)              (188)
Unrecognized net gain                                  28,563             75,309
--------------------------------------------------------------------------------
Accrued Postretirement Benefit Cost               $   363,517        $   366,187
================================================================================
</TABLE>

At March 31, 1997 and December 31, 1996, the Plan assets,  which are recorded at
fair value,  include cash and cash  equivalents,  fixed income  investments  and
approximately $100,000 of listed equity securities of the Company.


                                   - 12 -

<PAGE>



<TABLE>
<CAPTION>

Periodic  postretirement  benefit cost other than  pensions for the period ended
March 31, 1997 and Year Ended December 31, 1996, respectively, were as follows:

                                                 (In thousands of dollars)
--------------------------------------------------------------------------------
                                                  1997               1996
--------------------------------------------------------------------------------
<S>                                            <C>               <C>
Service cost-benefits
   earned during the period                    $  2,821          $  10,690
Interest cost on projected
   benefit obligation and
   service cost                                   6,642             25,030
Actual return on plan assets                      ( 591)            (3,046)
 Net Amortization
   and deferral                                  (3,446)           (12,175)
--------------------------------------------------------------------------------
Periodic Postretirement
Benefit Cost                                   $  5,426          $  20,499
================================================================================
</TABLE>

<TABLE>
<CAPTION>
Assumptions  used to determine the  postretirement  benefit  obligation  were as
follows:
--------------------------------------------------------------------------------
                                                    1997          1996
--------------------------------------------------------------------------------
<S>                                                <C>           <C>  
Discount rate                                      7.25%         7.25%
Rate of future compensation increases              5.00%         5.00%
Long-term rate of return on assets                 7.50%         7.50%
--------------------------------------------------------------------------------
</TABLE>

As of March 31, 1997,  the Company  revised  actuarial  assumptions  relating to
mortality and the use of a 7.00% discount rate,  which changed the present value
of the accrued benefit. In accordance with the PSC Order, which was effective in
1993,  "Statement of Policy and Order  Concerning  the Accounting and Ratemaking
Treatment for Pensions and  Postretirement  Benefits Other than Pensions"  these
assumption  changes are amortized  over a ten-year  period and will be reflected
ratably in periodic postretirement benefit cost during that period.

As of April 1, 1997, the Company  intends to change the long-term rate of return
on assets to 7.00%.

The  assumed  health  care cost trend rates used in  measuring  the  accumulated
postretirement  benefit  obligation at both March 31, 1997 and December 31, 1996
were 8.0%, gradually declining to 6.0% in 2001 and thereafter.  A one percentage
point increase in the health care cost trend rate would increase the accumulated
postretirement  benefit obligation as of March 31, 1997 and December 31, 1996 by
approximately  $59 million  and $43  million,  respectively,  and the sum of the
service  and  interest  costs  in 1997 and 1996 by $1  million  and $5  million,
respectively.


                                   - 13 -

<PAGE>



MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

EARNINGS

Earnings for common stock for the three months ended March 31, 1997,  were $74.7
million or $0.62 per common share compared with $68.7 million or $0.57 per share
for the same period last year.

The Company  experienced  higher earnings for both its electric and gas business
units.

Gas business earnings increased for the three month period ended March 31, 1997,
compared  to  the  same  period  last  year,  primarily  as  the  result  of the
recognition of revenues  relating to an independent  power producer contract for
the period 1989-1996,  which increased earnings by approximately $.03 per share.
Absent this amount,  earnings per share for the gas system are comparable to the
same 1996 period.

Electric business earnings  increased for the three month period ended March 31,
1997,  compared  to the same  period  last year.  Factors  contributing  to this
increase  include the  Company's  continuing  efforts to reduce  operations  and
maintenance  expenses and the efficient  use of cash  generated by operations to
retire maturing debt.

REVENUES

Total  revenues for the three  months ended March 31, 1997 were $851.2  million,
representing  a decrease of  approximately  $13.0  million when  compared to the
three months ended March 31, 1996.  Electric revenues  decreased by $1.5 million
and gas revenues  decreased by $11.5 million when compared to the same period in
1996.

The decrease in gas  revenues  for the three  months ended March 31, 1997,  when
compared  to the same  period in 1996,  was  primarily  the result of lower fuel
expense  recoveries  driven in part by lower sales volumes  associated  with the
warmer than normal winter  experienced in the Company's service territory during
1997.  Variations in weather have a limited  impact on revenues as the Company's
current  gas rate  structure  includes  a  weather  normalization  clause  which
mitigates  the impact on  revenues  of  experiencing  weather  that is warmer or
colder than normal.

The slight decrease in electric revenues during the three months ended March 31,
1997, when compared to the same period in 1996, was primarily due to lower sales
volumes caused by the warmer weather experienced in the region during the winter
of 1997.  The  decrease in  revenues  resulting  from these lower sales  volumes
however, had no effect on earnings due to the Company's current

                                   - 14 -

<PAGE>



electric rate structure which includes a revenue  reconciliation  mechanism that
eliminates  the  impact on  earnings  of sales  volumes  that are above or below
adjudicated levels.

FUEL AND PURCHASED POWER


<TABLE>
<CAPTION>

Fuel and purchased  power expenses for the three months ended March 31, 1997 and
1996 were as follows:

                                                 Three Months Ended
                                                 3/31/97    3/31/96
                                                 -------    -------
                                                    (In Millions)
<S>                                               <C>          <C>
      ELECTRIC SYSTEM
        Oil                                       $ 37         $ 67
        Gas                                         39            7
        Nuclear                                      4            4
        Purchased Power                             85           81
                                                    --           --
      Total Electric Fuel Costs                    165          159

      GAS SYSTEM                                   137          151
                                                   ---          ---
      Total                                       $302         $310
                                                  ====         ====

</TABLE>


For the three months ended March 31, 1997,  electric fuel costs were higher when
compared to the same period last year primarily as a result of higher  purchased
power  prices.  Also  contributing  to the  increase  was a reduction in credits
generated by electric off-system gas sales. Profits from off-system gas sales by
the  electric  business  are  used to  offset  the  cost of  fuel  for  electric
generation,  thereby  supporting the Company's goal of providing electric energy
to customers at the lowest cost possible.  Electric off-system gas sales in 1997
were significantly below those of the same period last year due to a decrease in
the demand for gas resulting from the warmer winter.

Gas fuel costs for  operating  the gas business  decreased  for the three months
ended  March 31,  1997,  when  compared  to the same  period  last year due to a
decrease in gas prices  coupled with a refinement  in the method of  recognizing
gas fuel  expenses.  Also  contributing  to the decrease was lower sales volumes
resulting from the warmer winter.



                                   - 15 -

<PAGE>


<TABLE>
<CAPTION>

The percentages of total electric energy  available by type of fuel for electric
operations for the three months ended March 31, 1997 and 1996 were as follows:

                                                 Three Months Ended
                                                 3/31/97     3/31/96
                                                 -------     -------
      <S>                                         <C>           <C>
      Oil                                          22%           42%
      Gas                                          30             8
      Nuclear                                      10            10
      Purchases                                    38            40
                                                   --            --
      Total                                       100%          100%
                                                  ===           === 
</TABLE>


The use of oil for  electric  generation  decreased  in 1997 as oil became  less
economical than gas. The Company also experienced lower electric  off-system gas
sales in 1997, making more gas available for use in generating electricity.

In an effort to maximize the  Company's  operating  flexibility,  the Company is
continuing to convert its oil-fired steam  generating units to dual fired units.
Of the Company's  eight steam  generation  units capable of burning natural gas,
six are dual-  fired,  providing  the Company  with the ability to burn the most
cost  efficient  fuel   available,   consistent   with  seasonal   environmental
requirements, thereby providing customers with the lowest cost energy possible.

OPERATIONS AND MAINTENANCE EXPENSES

Operations and maintenance  (O&M) expenses,  excluding fuel and purchased power,
amounted to $125.0  million for the three months ended March 31, 1997,  compared
to $134.4  million for the three months ended March 31, 1996.  This  decrease of
$9.4 million or 7.0%,  is primarily  attributable  to the  Company's  continuing
efforts to control costs.

RATE MODERATION COMPONENT

The  Rate  Moderation  Component  (RMC)  reflects  the  difference  between  the
Company's revenue  requirements under  conventional  ratemaking and the revenues
provided by its electric  rate  structure.  The RMC is adjusted  monthly for the
operation of the Company's Fuel Moderation Component (FMC) mechanism and for any
differences  between the Company's share of actual costs for O&M, property taxes
and payroll taxes  incurred for the Nine Mile Point Nuclear Power Station Unit 2
(NMP2) and amounts provided for in electric rates.

For the three  months  ended March 31,  1997,  the  Company  recorded a non-cash
charge  to income of  approximately  $5.9  million,  including  adjustments  for
expenses for NMP2 and amounts generated

                                   - 16 -

<PAGE>



by the FMC mechanism,  as operating  income  generated by the Company's  current
electric rate structure  exceeded that required under a conventional  ratemaking
calculation.  For the three months ended March 31, 1996, the Company  recorded a
non-cash  credit to income of  approximately  $15.3 million as operating  income
generated by the  Company's  current  electric rate  structure  were below those
required under a conventional ratemaking calculation.

The Company  continues to believe that the full amortization of the RMC balance,
which at March 31, 1997, was approximately $410 million,  will take place within
the time frame established by the Rate Moderation Agreement (RMA).

For a  further  discussion  of the RMC and RMA see  Notes 1, 2 and 3 of Notes to
Financial Statements in the Company's Annual Report on Form 10-K/A, for the Year
Ended December 31, 1996 and for a further discussion of the FMC see Management's
Discussion and Analysis  included in the Company's Annual Report on Form 10-K/A,
for the Year Ended December 31, 1996.

OTHER REGULATORY AMORTIZATION

For  the  three  months  ended  March  31,  1997,  and  1996,  other  regulatory
amortization was a non-cash charge to income of $12.2 million and $27.2 million,
respectively.  This  decrease  has no impact on earnings  since it reflects  the
deferral of income or expense  resulting from the Company's  various  ratemaking
mechanisms, as explained below.

The electric revenue  reconciliation  mechanism,  as established under the LILCO
Ratemaking  and  Performance  Plan (LRPP),  eliminates the impact on earnings of
experiencing  sales that are above or below  adjudicated  levels by  providing a
fixed annual net margin level (defined as sales  revenue,  net of fuel and gross
receipts  taxes).  Variations in electric  revenue  resulting  from  differences
between actual and adjudicated net margin sales levels are deferred on a monthly
basis  during  the rate year  through  a charge  or  credit to other  regulatory
amortization.  Since  actual net margin  sales levels for the three months ended
March 31,  1997 and 1996 were  lower  than the  adjudicated  sales  levels,  the
Company  recorded  non-cash credits to income of $10.2 million and $2.0 million,
respectively.

Included in other  regulatory  amortization for the three months ended March 31,
1996 is $16.3 million of non-cash  charges to income related to the amortization
of the  deferred  LRPP balance for the rate year ended  November  30, 1994.  The
Company is awaiting PSC  permission to begin  amortization  of the deferred LRPP
balance  for the rate  year  ended  November  30,  1995.  As such  there  was no
corresponding amortization in 1997.


                                   - 17 -

<PAGE>



For a  further  discussion  of the  LRPP,  see  Note  3 of  Notes  to  Financial
Statements  included in the Company's Annual Report on Form 10-K/A, for the Year
Ended December 31, 1996.

In the first quarter of 1997 the Company recorded  approximately $1.6 million of
gas excess earnings  related to the 1994, 1995 and 1996 rate years that were not
previously recognized.  The Company recognized approximately $2.5 million of gas
excess earnings for the quarter ended March 31, 1996.

Partially offsetting the decreases in other regulatory amortization between 1997
and 1996 was the recognition of electric  earnings in excess of the allowed rate
of return on common equity.  The Company earned $10.8 million of Electric excess
earnings for the three months ended March 31, 1997. The Company did not earn any
electric excess earnings for the three months ended March 31, 1996.

OPERATING TAXES

For the three  months  ended March 31,  1997,  operating  taxes  totaled  $117.5
million,  a decrease  of $2.5  million or 2.1%  compared to the same period last
year.  The  decrease in  operating  taxes was  primarily  attributable  to lower
revenue taxes and the expiration of the corporate tax surcharge.

FEDERAL INCOME TAX

For the three  months  ended March 31, 1997,  federal  income tax totaled  $56.2
million,  an increase of $2.1  million or 3.8%  compared to the same period last
year. The increase in federal income tax was primarily the result of an increase
in pre-tax book income.

The Alternative  Minimum Tax liability for the three months ended March 31, 1997
totaled $23.4 million,  an increase of $10.6 million over the comparable  period
last year.  The year to year change in the current and  deferred  components  is
primarily a result of the full  utilization of the  Alternative  Minimum Tax Net
Operating Loss carryforward during 1996.

OTHER INCOME AND DEDUCTIONS

Other income net of  deductions,  for the three months ended March 31, 1997, was
$3.6  million,  a decrease of $6.0 million  when  compared to the same period in
1996. This decrease resulted from a reduction in interest income from short term
investments as the Company  utilized  available cash balances to retire maturing
debt of $250  million in  February  1997 and a reduction  in  non-cash  carrying
charge income.


                                   - 18 -

<PAGE>



INTEREST EXPENSE

Interest  expense for the three months ended March 31, 1997, was $106.8 million,
a decrease of $12.4  million or 10.4% when  compared to the same period of 1996.
This  decrease was due to lower debt levels  resulting  from the  retirement  of
maturing debt of $250 million in February 1997 and $415 million in May 1996.

LIQUIDITY AND CAPITAL RESOURCES

At  March  31,  1997,  the  Company's  cash  and cash  equivalents  amounted  to
approximately  $65 million,  compared to $280 million at December 31, 1996.  The
decrease in cash at March 31,  1997,  primarily  reflects  the  satisfaction  at
maturity  of $250  million  of the  Company's  General  and  Refunding  Bonds on
February  15,  1997,  with  cash on hand.  The  Company  also  utilized  interim
financing of $30 million  obtained through its Revolving Credit Agreement (RCA).
The Company repaid this short-term borrowing under the RCA in March 1997.

The Company's debt ratio  decreased from 59.3% at December 31, 1996, to 57.8% at
March 31, 1997 primarily as a result of the debt redemption noted above. The use
of cash  generated  from  operations  to  satisfy  maturing  debt is part of the
Company's continuing commitment to improve its capital structure.

The Company has available,  through October 1, 1997, $250 million revolving line
of credit under its RCA. This line of credit is secured by a first lien upon the
Company's accounts receivable and fuel oil inventories.  The Company delivered a
written request to the Co-Agent,  for acceptance by the lending banks, to extend
the RCA for a one-year  period.  The Company is currently  awaiting a reply from
the banks,  however, the Company does not envision any problems in being granted
the extension.

The  Company  has no current  plans to access  the  public  markets as cash from
operations  should be sufficient  to meet  operating  requirements  and the debt
maturities through 1998. However,  if necessary,  the Company would borrow under
the RCA to satisfy short-term cash requirements.  Also, the Company would access
the public  securities  markets to refinance  existing  debt or preferred  stock
should market conditions prove favorable,  subject to any restrictions contained
in the  merger  agreement  with  Brooklyn  Union.  The  Company  would also take
advantage  of any  tax-exempt  financing  made  available  by the New York State
Energy Research and Development Authority.



                                   - 19 -

<PAGE>



CAPITAL REQUIREMENTS AND CAPITAL PROVIDED

<TABLE>
<CAPTION>

Capital  requirements  and capital provided for the three months ended March 31,
1997, were as follows:
                                                (In Millions of Dollars)
--------------------------------------------------------------------------------
                                                   Three Months Ended
                                                     March 31, 1997
--------------------------------------------------------------------------------
<S>                                                      <C>
CAPITAL REQUIREMENTS

Total Construction                                       $   50
--------------------------------------------------------------------------------
Redemptions and Dividends
  Long-term debt                                            250
  Preferred stock dividends                                  13
  Common stock dividends                                     54
--------------------------------------------------------------------------------
Total Redemptions and Dividends                             317
--------------------------------------------------------------------------------
Shoreham post-settlement costs                               12
--------------------------------------------------------------------------------
Total Capital Requirements                               $  379
================================================================================

CAPITAL PROVIDED

Cash generation from operations                          $ 160
Decrease in cash balances                                  215
Common stock issued                                          5
Other investing and financing activities                    (1)
--------------------------------------------------------------------------------
Total Capital Provided                                   $ 379
================================================================================
</TABLE>

For further information, see the Statement of Cash Flows.



                                   - 20 -

<PAGE>



INVESTMENT RATING

The Company's securities are rated by Standard & Poor's (S&P), Moody's Investors
Service, Inc. (Moody's), Fitch Investors Service,  L.P.(Fitch) and Duff & Phelps
Credit Rating Co. (D&P). The credit ratings for each of the Company's  principal
securities remain unchanged since December 31, 1996.

In response to the March 1997 announcement that the Company reached an agreement
in principle with LIPA, the rating agencies took the following actions:

o     Moody's placed the securities of the Company under review for
      potential upgrade.

o     S&P announced  that the Company's  corporate  credit rating will remain on
      CreditWatch  with  positive  implications,  but  revised  the  CreditWatch
      implications  on  the  Company's   senior  debt  and  preferred  stock  to
      "Developing" from "Positive".

o     D&P announced they will retain the Company's ratings on Rating
      Watch - Uncertain.

o     Fitch  maintained  the  Company's  fixed income  securities  on FitchAlert
      "Positive",  indicating  the  rating  is  likely  to be  either  raised or
      affirmed.

For a further  discussion of the Company's credit ratings see Investment  Rating
in the  Company's  Annual  Report Form 10-K/A,  for the Year Ended  December 31,
1996.

RATE MATTERS

For a discussion of Rate Matters see, Note 3 of Notes to Financial Statements.

LONG ISLAND POWER AUTHORITY PROPOSED TRANSACTION

On April 30, 1997, the Long Island Power Authority  (LIPA)  submitted to the New
York State Public Authorities  Control Board for approval,  unexecuted copies of
agreements  related to LIPA's  proposed  acquisition  (via the  purchase  of the
Company's common stock) of the Company's  transmission  and distribution  system
and certain other assets and  liabilities  (LIPA  Transaction).  Prior to LIPA's
acquisition of the common stock, the Company's gas assets,  electric  generating
facility assets and certain other assets and liabilities  will be transferred to
affiliates of the holding  company to be formed in  connection  with the binding
share exchange with Brooklyn Union Gas Company (Brooklyn Union).

      While the specific allocation of assets and liabilities has not
yet been finally determined, it is currently contemplated that the

                                   - 21 -

<PAGE>



holding company would,  subject to obtaining all required  consents,  assume the
Company's (i) 7.30%  Debentures  due July 15, 1999;  (ii) 8.20%  Debentures  due
March  15,  2023;  and  (iii)  Preferred  Stock,  7.95%,  Series  AA. It is also
contemplated  that each issued and  outstanding  share of preferred stock of the
Company that is subject to optional  redemption  at or before the closing of the
LIPA  Transaction will be called for redemption by the Company no later than the
date of the closing. Each issued and outstanding share of preferred stock of the
Company  not  subject to  optional  redemption  (other than the Series AA) will,
subject to obtaining all required consents,  be acquired by the Company for cash
pursuant to the terms of the LIPA Transaction agreements.

      The Company is unable to determine  when or if the  agreements  related to
the LIPA  Transaction will be executed by the parties or when or if all consents
and approvals required to consummate the LIPA Transaction will be obtained.  For
additional  information concerning the LIPA Transaction and the proposed binding
share exchange with Brooklyn  Union,  see the Company's  Forms 8-K/A dated March
24, 1997 and Form 8-K dated December 30, 1996, respectively.

BROOKLYN UNION TRANSACTION

For a further  discussion on the Brooklyn Union  Transaction see Note 3 of Notes
to Financial Statements.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements which, to the extent they are not recitations of
historical fact, constitute  "forward-looking  statements" within the meaning of
the Securities  Litigation Reform Act of 1995 (Reform Act). In this respect, the
words "estimate,"  "project,"  "anticipate,"  "expect,"  "intend," "believe" and
similar  expressions are intended to identify  forward-looking  statements.  All
such  forward-looking  statements  are intended to be subject to the safe harbor
protection  provided by the Reform Act. A number of important  factors affecting
the  Company's  business and  financial  results  could cause actual  results to
differ  materially from those stated in the  forward-looking  statements.  Those
factors  include  the  proposed  transactions  with  Brooklyn  Union and LIPA as
discussed under the heading "Long Island Power Authority  Proposed  Transaction"
and "Brooklyn Union Transaction", state and federal regulatory rate proceedings,
competition,  and certain environmental matters each as discussed herein, in the
Company's Annual Report on Form 10-K/a,  for the Year Ended December 31, 1996 or
in  other  reports  filed  by the  Company  with  the  Securities  and  Exchange
Commission.



                                   - 22 -

<PAGE>



PART II.    OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

            None.

ITEM 2.     CHANGES IN SECURITIES

            None.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            None.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None.

ITEM 5.     OTHER INFORMATION

          On March 27, 1997,  the Company's  Board of Directors  voted to change
          the  Company's  fiscal  year end to March 31. The  Company  previously
          reported results of operations on a calendar year basis.

          On April  23,  1997,  the  Company,  The  Connecticut  Light and Power
          Company   (CL&P)  and  the  Long   Island   Soundkeeper   Fund,   Inc.
          (Soundkeeper)  jointly  filed a  Stipulation  of  Dismissal in Federal
          District Court,  which settled a lawsuit  previously  commenced by the
          Soundkeeper  alleging that fluid leaks from the electric  transmission
          cable located under the Long Island Sound (Sound Cable), jointly owned
          by the Company and CL&P, violated the Clean Water Act. The settlement
          of the Soundkeeper  lawsuit will not have a material adverse effect on
          the financial  condition of the Company.  For  additional  information
          concerning  the  Sound  Cable  see  Note  11  of  Notes  to  Financial
          Statements in the Company's Annual Report on Form 10-K/A, for the Year
          Ended December 31, 1996.


                                   - 23 -

<PAGE>



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      a.    EXHIBITS

            Exhibit 10

            (1) Executive Employment Agreement by and between the Company
            and Michael E. Bray dated as of March 1, 1997.

            (2) Indemnification Agreement by and between the Company and Michael
            E.  Bray  dated  as  of  March  1,  1997  which agreement is
            substantially the same as  Indemnification  Agreement by and between
            the  Company  and certain  officers  dated as of  February  23, 1994
            (filed as an Exhibit to the Company's Form 10-K for the Year Ended 
            December 31, 1994) which is incorporated herein by reference.

            Exhibit 27 - Financial Data Schedule UT for the  three-month  period
            ended March 31, 1997.

      b.    REPORTS ON FORM 8-K

            In its  current  report on Form 8-K dated  February  25,  1997,  the
            Company filed the  following:  (i) audited  financial  statements of
            Brooklyn Union as of September 30, 1996 and 1995 and for each of the
            three years in the period ended  September 30, 1996;  (ii) unaudited
            interim  financial  statements  of Brooklyn  Union as of and for the
            three months and twelve months ended December 31, 1996 and 1995; and
            (iii) unaudited pro forma combined condensed  financial  information
            for the Company  and  Brooklyn  Union,  after  giving  effect to the
            Binding  Share  Exchanges  as a pooling of interest  for  accounting
            purposes.

            In its  current  report  on Form 8-K dated  March 20,  1997 and Form
            8-K/A dated March 24, 1997,  the Company  reported  that the Company
            and LIPA entered  into an  Agreement in Principle  pursuant to which
            LIPA  would,  among  other  things,  acquire  certain  assets of the
            Company through the purchase of the Company's  outstanding shares of
            Common Stock.

            In its current  report on Form 8-K dated April 11, 1997, the Company
            reported that it changed its fiscal year-end to March 31.









                                   - 24 -

<PAGE>



                                      SIGNATURE

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



                                        LONG ISLAND LIGHTING COMPANY
                                                (Registrant)


                                          By /s/ ANTHONY NOZZOLILLO
                                          -------------------------
                                              ANTHONY NOZZOLILLO
                                          Senior Vice President and
                                          Principal Financial Officer


Dated:  May 15, 1997

                                   - 25 -

<PAGE>



                                 EXHIBIT INDEX
                                 -------------
                                 
                                                                        PAGE NO.
                                                                        --------
Exhibit 10

(1) Executive Employment Agreement by and between the Company and            27
Michael E. Bray dated as of March 1, 1997.

(2)  Indemnification  Agreement by and between the Company and Michael       --
E. Bray dated as of March 1, 1997 which agreement is substantially the
same as  Indemnification  Agreement  by and  between  the  Company and
certain  officers dated as of February 23, 1994 (filed as an Exhibit to
the Company's Form 10-K for the Year Ended December 31, 1994) which is
incorporated herein by reference.


Exhibit 27

Financial Data Schedule UT for the three-month  period ended March 31,       40
1997.