<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q
                                   (Mark One)

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

                  For the quarterly period ended June 30, 1999

                                                      OR

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

                  For the transition period from            to

                  Commission file number            1-4315


                       ORANGE AND ROCKLAND UTILITIES, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
           New York                                            13-1727729
           --------                                            ----------
<S>                                                       <C>
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)

One Blue Hill Plaza, Pearl River, New York                       10965
(Address of principal executive offices)                      (Zip code)
</TABLE>


                                 (914) 352-6000
              (Registrant's telephone number, including area code)

                                      NONE
              (Former name, former address and former fiscal year,
                          if changed since last report)


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

     Consolidated Edison, Inc. ("CEI") owns all issued and outstanding shares of
registrant.  On July 8, 1999, registrant became a wholly-owned subsidiary of CEI
pursuant to an Agreement  and Plan of Merger,  dated May 10, 1998, by and among
registrant, CEI and a subsidiary of CEI.
<PAGE>   2
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                          PAGE
                                                                                                          ----
<S>               <C>                                                                                    <C>
PART I.           FINANCIAL INFORMATION
-------           ---------------------

ITEM 1.           Financial Statements

                  Consolidated Balance Sheets (Unaudited) at
                  June 30, 1999 and December 31, 1998                                                      3

                  Consolidated Statements of Income (Unaudited)
                  for the three months and six months ended
                  June 30, 1999 and June 30, 1998                                                          4

                  Consolidated Cash Flow Statements (Unaudited)
                  for the six months ended June 30, 1999
                  and June 30, 1998                                                                        5

                  Notes to Consolidated Financial Statements                                               6

ITEM 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                            11


PART II.          OTHER INFORMATION

ITEM 1.           Legal Proceedings                                                                       23

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

SIGNATURES                                                                                                25
</TABLE>
<PAGE>   3
                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS


              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                     ASSETS

<TABLE>
<CAPTION>
                                                           JUNE 30,      DECEMBER 31,
                                                             1999             1998
                                                             ----             ----
                                                            (THOUSANDS OF DOLLARS)
<S>                                                      <C>              <C>
UTILITY PLANT:
Electric                                                 $  639,867       $1,065,912
Gas                                                         254,378          246,845
Common                                                      104,149          103,064
                                                         ----------       ----------
     Utility Plant in Service                               998,394        1,415,821
Less accumulated depreciation                               335,769          498,652
                                                         ----------       ----------
     Net Utility Plant in Service                           662,625          917,169
Construction work in progress                                30,047           34,401
                                                         ----------       ----------
     Net Utility Plant                                      692,672          951,570
                                                         ----------       ----------

NON-UTILITY PROPERTY:
Non-utility property                                          6,790            7,780
Less accumulated depreciation, depletion
     and amortization                                         3,338              252
                                                         ----------       ----------
     Net Non-utility Property                                 3,452            7,528
                                                         ----------       ----------

CURRENT ASSETS:
Cash and cash equivalents                                    65,151            5,643
Temporary cash investments                                  217,268              500
Customer accounts receivable, less allowance for
     uncollectible accounts of $6,700 and $3,686             59,526           57,095
Accrued utility revenue                                      27,767           28,489
Other accounts receivable, less allowance for
     uncollectible accounts of $1,348 and $286               19,766           16,173
Materials and supplies (at average cost)                     11,256           34,161
Prepaid property taxes                                        6,968           22,768
Prepayments and other current assets                         38,364           30,019
                                                         ----------       ----------
     Total Current Assets                                   446,066          194,848
                                                         ----------       ----------

DEFERRED DEBITS:
Income tax recoverable in future rates                       42,212           79,966
Deferred revenue taxes                                       10,947           11,915
Deferred pension and other postretirement benefits           45,971            4,097
IPP settlement costs                                            639            5,330
Unamortized debt expense (amortized over term
     of securities)                                          11,179           10,840
Other deferred debits                                        38,330           52,748
                                                         ----------       ----------
     Total Deferred Debits                                  149,278          164,896
                                                         ----------       ----------


         TOTAL                                           $1,291,468       $1,318,842
                                                         ==========       ==========
</TABLE>



        The accompanying notes are an integral part of these statements.
<PAGE>   4
              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                         CAPITALIZATION AND LIABILITIES

<TABLE>
<CAPTION>
                                                           JUNE 30,        DECEMBER 31,
                                                             1999            1998
                                                             ----            ----
                                                             (THOUSANDS OF DOLLARS)
<S>                                                     <C>                <C>
CAPITALIZATION:
Common stock (13,529,931 & 13,519,988 shares
     outstanding)                                       $    67,650        $    67,599
Premium on capital stock                                    132,221            132,321
Capital stock expense                                        (5,392)            (6,045)
Retained earnings                                           160,298            186,520
                                                        -----------        -----------
     Total                                                  354,777            380,395
                                                        -----------        -----------
Long-term debt                                              301,476            357,156
                                                        -----------        -----------
     Total Capitalization                                   656,253            737,551
                                                        -----------        -----------

NON-CURRENT LIABILITIES:
Reserve for claims and damages                                5,501              4,078
Provision for rate refunds                                   26,830              1,223
Postretirement benefits                                      43,617              9,759
Pension costs                                                31,186             47,481
                                                        -----------        -----------
     Total Non-current Liabilities                          107,134             62,541
                                                        -----------        -----------

CURRENT LIABILITIES:
Notes payable and obligations due within one year           165,204            150,740
Preferred and Preference stock to be redeemed
 within one year                                                  0             43,516
Accounts payable                                             77,110             60,573
Accrued Federal income and other taxes                       72,064                 22
Deferred fuel costs                                          14,878              6,609
Refunds to customers                                          7,131              4,838
Other current liabilities                                    19,023             18,055
                                                        -----------        -----------
     Total Current Liabilities                              355,410            284,353
                                                        -----------        -----------

DEFERRED TAXES AND OTHER:
Deferred Federal income taxes                               109,204            197,698
Deferred investment tax credits                               7,571             13,654
Other deferred credits                                       55,896             23,045
                                                        -----------        -----------
     Total Deferred Taxes and Other                         172,671            234,397
                                                        -----------        -----------


         TOTAL                                          $ 1,291,468        $ 1,318,842
                                                        ===========        ===========
</TABLE>



        The accompanying notes are an integral part of these statements.








<PAGE>   5
              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


<TABLE>
<CAPTION>
                                                              THREE MONTHS                        SIX MONTHS
                                                               ENDED JUNE 30,                     ENDED JUNE 30,
                                                            1999             1998             1999            1998
                                                         --------------------------------------------------------------
                                                                            (THOUSANDS OF DOLLARS)
<S>                                                      <C>              <C>              <C>              <C>
OPERATING REVENUES:
Electric                                                 $ 115,409        $ 115,748        $ 224,323        $ 221,844
Gas                                                         26,485           23,602          100,553           82,428
                                                         ---------        ---------        ---------        ---------
     Total Utility Revenues                                141,894          139,350          324,876          304,272
Diversified Activities                                         543              199              616              358
                                                         ---------        ---------        ---------        ---------
     Total Operating Revenues                              142,437          139,549          325,492          304,630
                                                         ---------        ---------        ---------        ---------
OPERATING EXPENSES:
Operations:
     Fuel used in electric production                       23,960           25,875           43,589           42,149
     Electricity purchased for resale                       10,384           10,183           23,064           26,170
     Gas purchased for resale                               14,981           12,510           57,044           43,465
     Other expenses of operation                            66,109           34,146          103,732           68,371
Maintenance                                                  9,653           10,737           18,610           18,029
Depreciation and amortization                                9,733            8,740           19,221           17,301
Taxes other than income taxes                               21,458           21,532           46,255           45,336
Federal income taxes                                        (4,712)           3,114            2,493            9,615
                                                         ---------        ---------        ---------        ---------
     Total Operating Expenses                              151,566          126,837          314,008          270,436
                                                         ---------        ---------        ---------        ---------

INCOME FROM OPERATIONS                                      (9,129)          12,712           11,484           34,194
                                                         ---------        ---------        ---------        ---------
OTHER INCOME AND (DEDUCTIONS):
Allowance for other funds used during construction               6                6               15                3
Other - net                                                 (1,789)              27           (1,954)             648
Taxes other than income taxes                                 (201)             (68)            (158)            (138)
Federal income taxes                                          _188              143              330               92
                                                         ---------        ---------        ---------        ---------
Total Other Income and(Deductions)                          (1,796)             108           (1,767)             605
                                                         ---------        ---------        ---------        ---------

INCOME BEFORE INTEREST CHARGES                             (10,925)          12,820            9,717           34,799
                                                         ---------        ---------        ---------        ---------

INTEREST CHARGES:
Interest on long-term debt                                   6,734            6,016           12,801           11,961
Other interest                                               1,832            1,927            3,945            4,484
Amortization of debt premium, expense-net                      304              285              599              568
Allowance for borrowed funds used
     during construction                                       (70)            (484)            (118)          (1,094)
                                                         ---------        ---------        ---------        ---------
     Total Interest Charges                                  8,800            7,744           17,227           15,919
                                                         ---------        ---------        ---------        ---------
NET INCOME (LOSS)                                          (19,725)           5,076           (7,510)          18,880
Preferred and preference stock requirements                    187              699              886            1,399
                                                         ---------        ---------        ---------        ---------
Earnings (Loss) applicable to common stock               $ (19,912)       $   4,377        $  (8,396)       $  17,481
                                                         =========        =========        =========        =========
Avg. number of common shares
     outstanding (000's)                                    13,530           13,519           13,526           13,520
                                                         =========        =========        =========        =========
Earnings (Loss) Per Average Common Share
     Outstanding                                         $   (1.47)       $     .32        $    (.62)       $    1.29
                                                         =========        =========        =========        =========
Dividends declared per common share outstanding          $    1.29        $    1.29        $    1.94        $    1.94
                                                         =========        =========        =========        =========
</TABLE>


The accompanying notes are an integral part of these statements.






<PAGE>   6
              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED
                                                                              JUNE 30,
                                                                        1999            1998
                                                                        ----            ----
                                                                        (THOUSANDS OF DOLLARS)
<S>                                                                   <C>              <C>
CASH FLOW FROM OPERATIONS:
Net income (loss)                                                     $  (7,510)       $  18,880
Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation and amortization                                       18,932           17,076
     Deferred Federal income taxes                                      (17,450)             776
     Deferred investment tax credit                                      (6,083)            (385)
     Deferred and refundable fuel and gas costs                          11,688             (671)
     Allowance for funds used during construction                          (133)          (1,098)
     Other non-cash charges                                                 577               78
     Changes in certain current assets and liabilities:
         Accounts receivable (net) and accrued utility revenues          (5,302)          20,612
         Materials and supplies                                           5,721            7,566
         Prepaid property taxes                                          15,800            9,108
         Prepayments and other current assets                            (8,345)         (16,841)
         Operating accounts payable                                      16,537           (9,501)
         Accrued Federal Income and other taxes                          (7,696)            (867)
         Accrued interest                                                 1,606              185
         Refunds to customers                                             2,293              627
         Other current liabilities                                       10,908           (4,425)
     Pension liability                                                  (14,311)             443
     Other-net                                                           41,326              508
                                                                      ---------        ---------
     Net Cash Provided from Operations                                   58,558           42,071
                                                                      ---------        ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to plant                                                      (18,211)         (21,740)
Net proceeds from the sale of the electric generating assets            339,272               --
Temporary cash investments                                                   --               --
Allowance for funds used during construction                                133            1,098
                                                                      ---------        ---------
     Net Cash Provided By (Used In) Investing Activities                321,194          (20,642)
                                                                      ---------        ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from:
     Issuance of long-term debt                                          45,000               --
   Issuance of capital lease obligations                                     --               --
Retirements of:
     Common stock                                                            --           (3,225)
     Preference and preferred stock                                     (43,516)              --
     Long-term debt                                                      (2,341)             (19)
     Capital lease obligations                                           (1,472)             (79)
Net borrowings (repayments) under
     short-term debt arrangements*                                      (82,403)           4,285
Dividends on preferred and common stock                                 (18,744)         (18,857)
                                                                      ---------        ---------
Net Cash Used in Financing Activities                                  (103,476)         (17,895)
                                                                      ---------        ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                 276,276            3,534
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          6,143            3,513
                                                                      ---------        ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $ 282,419        $   7,047
                                                                      =========        =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
     Interest, net of amounts capitalized                             $  14,224        $  15,729
     Federal income taxes                                             $  11,000        $  14,500
</TABLE>


*Debt with maturities of 90 days or less

The accompanying notes are an integral part of these statements.





<PAGE>   7
              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   On May 10,  1998,  Orange and Rockland  Utilities,  Inc.  (the  "Company"),
     Consolidated  Edison,  Inc. ("CEI") and C Acquisition Corp., a wholly owned
     subsidiary  of CEI ("Merger  Sub"),  entered into an Agreement  and Plan of
     Merger ("Merger  Agreement")  providing for a merger  transaction among the
     Company,  CEI and the Merger Sub.  The Merger  became  effective on July 8,
     1999 when the Merger Sub merged  with and into the Company  (the  "Merger")
     and  the  Company  became  the  surviving  corporation  and a  wholly-owned
     subsidiary  of  CEI.  As  provided  in  the  Merger  Agreement,  all of the
     Company's then  outstanding  Common Stock, $5 par value, was converted into
     the right to receive the merger  consideration and each of the 1,000 issued
     and outstanding  shares of the Merger Sub Common Stock, $.01 par value, was
     converted into one share of the Company's  Common Stock, $5 par value.  For
     accounting purposes, the Merger is being deemed by the Company to have been
     effective July 1, 1999.


2.   The  consolidated  balance  sheet as of June  30,  1999,  the  consolidated
     statements  of income for the three month and six month  periods ended June
     30, 1999 and 1998, and the  consolidated  cash flow  statements for the six
     month  periods  then ended have been  prepared  by the  Company  without an
     audit. In the opinion of management,  all adjustments (which include normal
     recurring  adjustments  and  certain  adjustments  related  to the  Merger)
     necessary  to  fairly  present  the  financial   position  and  results  of
     operations at June 30, 1999, and for all periods presented, have been made.
     The amounts in the consolidated  balance sheet as of December 31, 1998 have
     been derived from audited financial statements.


3.   Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles  have  been  omitted.  These  unaudited  consolidated  financial
     statements,  notes to consolidated  financial  statements and  management's
     discussion  and analysis of financial  condition  and results of operations
     should be read in conjunction with the consolidated  financial  statements,
     the review of the Company's  results of operations and financial  condition
     and  the  notes  to  consolidated  financial  statements  included  in  the
     Company's  December 31, 1998 Annual Report to Shareholders,  which material
     is  incorporated  by reference to the Company's Form 10-K Annual Report for
     the year ended  December 31, 1998. The results of operations for the period
     ended  June 30,  1999 are not  necessarily  indicative  of the  results  of
     operations for the full year.

4.   The consolidated  financial statements include the accounts of the Company,
     all  subsidiaries  and the  Company's  pro rata share of an  unincorporated
     joint  venture.  All  inter-company  balances  and  transactions  have been
     eliminated.






<PAGE>   8
5.   Contingencies  at  June  30,  1999  are   substantially  the  same  as  the
     contingencies described in the "Notes to Consolidated Financial Statements"
     included in the Company's  December 31, 1998 Annual Report to Shareholders,
     which material is incorporated  by reference to the Company's  December 31,
     1998 Form 10-K  Annual  Report,  and in Item 3,  Legal  Proceedings  of the
     Company's  Form 10-K Annual  Report for the fiscal year ended  December 31,
     1998, except changes in the status of regulatory  matters which are updated
     in Part I, Item 2 under the caption "Regulatory  Activities" and the status
     of certain Legal  Proceedings  which are updated in Part II, Item 1, "Legal
     Proceedings".

6.   The Merger resulted in liabilities for  contractual  termination  benefits,
     workforce  reductions and curtailment  losses under employee  benefit plans
     triggered by the  consummation  of the business  combination.  Statement of
     Financial  Accounting  Standards  No.  88  ("SFAS  No.  88"),   "Employers'
     Accounting for  Settlements  and  Curtailments  of Defined  Benefit Pension
     Plans and for  Termination  Benefits,"  applies to any employer that offers
     benefits to employees in connection  with their  termination of employment.
     In  accordance  with  Emerging  Issues  Task Force  96-5,  "Recognition  of
     Liabilities for Contractual  Termination  Benefits or Changing Benefit Plan
     Assumptions  in  Anticipation  of  a  Business  Combination,"  the  Company
     recognized  SFAS No.  88 costs as of June 30,  1999.  At June 30,  1999 the
     charge to income for these costs was approximately $20.9 million.

7.   On November 24, 1998,  the Company  entered into four separate  Asset Sales
     Agreements   ("ASAs")   with   subsidiaries   of  Southern   Energy,   Inc.
     (collectively,  with its subsidiaries, "Southern Energy"),  a subsidiary of
     The  Southern  Company,  for  the  sale  of all of the  Company's  electric
     generating assets,  including the two-thirds  interest in the Bowline Point
     generating  facility owned by Consolidated Edison Company of New York, Inc.
     The sales were completed on June 30, 1999.




<PAGE>   9

The total gross proceeds from the sale amounted to approximately $486.2 million,
of which  approximately  $349.3  million  was  attributable  to the  Company and
approximately  $136.9 million was  attributable to Con Edison for its two-thirds
ownership share of the Bowline Point Plant.  The net book value of the Company's
generating  facilities sold was approximately  $258.2 million,  and the value of
certain fuel and other plant  inventory  included in the sale was  approximately
$17.2  million  for a total  combined  net book  value of assets  sold of $275.4
million. After deducting  approximately $7.1 million of direct selling costs and
approximately $11.3 million of employee retraining, retention and severance pay,
the  pre-tax  gain on the sale  amounted to  approximately  $55.5  million.  The
provision for income taxes-net amounted to approximately $40.8 million,  and the
net gain on the sale was, therefore, approximately $14.7 million. As required by
regulatory  orders  approving the sale,  the net gain from the sale was deferred
pending final review by the New York State Public Service Commission  ("NYPSC"),
the  New  Jersey  Board  of  Public  Utility  Commissioners  ("NJBPU")  and  the
Pennsylvania Public Utility Commission  ("PAPUC") of the calculation of the gain
as well as final disposition of the net gain, and did not, therefore, impact net
income.  The  Company's  reported  net income  for the three  months and the six
months ended June 30, 1999 were adversely impacted by approximately $3.6 million
(before tax) as a result of regulatory adjustments included as part of the NYPSC
order  approving the sale.  These amounts will either reduce  previous  deferred
regulatory assets or will be passed back to customers.

The  divestiture   triggered   curtailment  and  special  termination   benefits
accounting as required by SFAS No. 88. The Company's  Transition Program for its
generation  employees  contains special  provisions that allow early vesting and
enhancements to the benefit plans for those employees not offered  employment or
who are  involuntarily  terminated  by the new owner  within five years from the
date of  transfer.  The  expected  costs of these  enhancements,  together  with
curtailment   costs,   is  estimated  to  result  in   additional   pension  and
post-retirement  benefit costs of $1.6 million and $0.8  million,  respectively.
These  estimates  are  included  in the  $11.3  million  of  employee  costs  in
determining the cost of the sale. The Company will retain the pension assets and
liabilities as well as the




<PAGE>   10
         obligation relating to the employees which were employed by the Company
         prior to the sale. The Company made a $10.0 million settlement payment
         to Southern Engergy with respect to certain pension calculations and
         reduced the Company's pension and other post-retirement benefit
         liability by $10.0 million.


8.      In accordance with the requirements of SFAS No. 131, "Disclosures about
        Segments of an Enterprise and Related Information," the Company defines
        its principal business segments as utility (electric and gas) and
        diversified activities. The diversified segment includes energy services
        and land development.


<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,                            1999             1998
                                                    ---------------------------
                                                      (THOUSANDS OF DOLLARS)
<S>                                                 <C>               <C>
Operating Information:
  Operating revenues:
  Sales to unaffiliated customers:
    Electric                                        $ 115,406         $ 115,746
    Gas                                                26,480            23,602
  Other sales:
    Electric                                                3                 2
    Gas                                                     5                 0
      Total Utility Operating Revenues                141,894           139,350
  Diversified activities                                  543               199
        Total Operating Revenues                    $ 142,437         $ 139,549
                                                    ---------         ---------

Operating income before income taxes:
   Electric                                         $  (7,264)        $  17,184
     Gas                                               (6,472)             (928)
      Diversified activities                             (105)             (430)
                                                    ---------         ---------
        Total Operating Income Before
         Income Taxes                               $  13,841)        $  15,826
</TABLE>


9.  Certain amounts reported for the prior year have been reclassified to
    conform with the current year presentation.







<PAGE>   11
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The  Company,  upon the  completion  of the  Merger  on July 8,  1999,  became a
wholly-owned subsidiary of CEI. This discussion and analysis relates to the June
30,  1999  interim  consolidated  financial  statements  of the  Company and its
subsidiaries  in Item I, Part 1 of this report and should be read in conjunction
with the  discussion  and  analysis in Item 7 of the  Company's  1998 Form 10-K.
Reference is also made to the Notes to Consolidated Financial Statements in Part
I, Item 1 of this report, which notes are incorporated herein by reference.


FINANCIAL CONDITION:

                              FINANCIAL PERFORMANCE

The Company's consolidated earnings per average common share outstanding for the
second  quarter of 1999 were $(1.47) as compared to $0.32 for the second quarter
of 1998. The earnings for the six-month  period ended June 30, 1999 and June 30,
1998 was $(0.62) and $1.29, respectively.  Earnings for both the quarter and the
six month period were significantly impacted by the Merger.  Fluctuations within
the  components  of earnings are discussed in the "Results of  Operations".  The
average number of common shares  outstanding  was 13.5 million for each of these
periods.


                         CAPITAL RESOURCES AND LIQUIDITY

At June 30, 1999, the Company and its utility subsidiaries had unsecured bank
lines of credit totaling $155.0 million. The Company borrows under the lines of
credit through the issuance of promissory notes to the banks. However, the
Company primarily utilizes such lines of credit to fully support commercial
paper borrowings. The aggregate amount of borrowings through the issuance of
promissory notes and commercial paper cannot exceed the aggregate lines of
credit. The average daily balance of short-term borrowings for the six months
ended June 30, 1999 amounted to $131.5 million at an effective interest rate of
5.1% as compared to $119.7 million at an effective interest rate of 5.9% for the
same period of 1998. The average daily balance of temporary cash investments for
the six months ended June 30, 1999 was $2.9 million with an effective interest
rate of 4.7% compared to $0.6 million at an effective interest rate of 5.2% for
the same period of 1998. The non-utility subsidiaries of the Company and of
Rockland Electric Company ("RECO"), a wholly owned utility subsidiary of the
Company, had no bank lines of credit at June 30, 1999.





<PAGE>   12
The Federal Energy Regulatory Commission ("FERC") regulates the issuance of
short-term debt by the Company and by RECO. The Company and RECO have received
authorization from FERC sufficient to issue up to $150 million and $15 million,
respectively, of short-term debt from time to time through 2001.

The Company's cash position was affected by the sale of the Company's electric
generating facilities, which was completed on June 30, 1999. The gross cash
proceeds from the sale amounted to $349.3 million. After making an
employee-benefit related payment to Southern Energy of
approximately $10.4 million and making tax payments related to the sale of
approximately $82 million, the Company paid all short-term debt outstanding, as
it became due and payable, while investing the proceeds in the interim. At July
31, 1999 the Company had no short-term debt outstanding and temporary cash
investments amounted to approximately $123 million.

The Merger Agreement required that the Company call for redemption all of its
outstanding Preference Stock and Preferred Stock. The Company's $1.52
Convertible Cumulative Preference Stock, Series A, no par value, the only
Preference Stock outstanding, was redeemed on April 6, 1999. All
outstanding series of the Company's Cumulative Preferred Stock, par value $100
per share, were redeemed on April 20, 1999. The aggregate redemption price of
the Preferred and Preference Stock, including call premiums was $43.5 million.

To fund the redemptions, the Company on March 9, 1999 issued $45 million of 7%
Debentures due 2029, Series G (the "Series G Debentures"). The Series G
Debentures were sold by means of competitive bid at a price of 98.458%.







<PAGE>   13


REGULATORY ACTIVITIES

MERGER WITH CEI

Reference is made to Item 1, Business, under the caption "Merger with
Consolidated Edison, Inc." in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, for information regarding the various regulatory
bodies from which approval of the Merger was required.

On April 1, 1999, the NJBPU issued an order approving the Merger Agreement
subject to certain conditions, including the following: (1) the Company must
file a cost allocation manual with the NJBPU by January 1, 2000; (2) net merger
savings will be allocated between ratepayers and shareholders on a 75%/25%
basis; (3) costs to achieve the Merger will be amortized by RECO over a ten year
period effective upon consummation of the Merger; (4) upon consummation of the
Merger, RECO will reduce its electric base rates by $1.434 million or 1.05%,
which represents 75% of the average annual net merger savings allocated to RECO
over the first four years following the consummation of the Merger; (5) this
electric base rate decrease will be applied on an equal percentage basis across
all rate classes and shall be included in the percentage rate reduction required
by the restructuring legislation signed into law on February 9, 1999; and(6)
simultaneous with the merger related base rate decrease, RECO will increase its
deferred fuel balance recovery component of its Levelized Energy Adjustment
Charge ("LEAC") rate by a dollar amount equal to that of the base rate decrease.
The NJBPU also found that there will be no adverse impact on competition as a
result of the Merger. On April 15, 1999, RECO submitted a letter to the NJBPU
advising it of its plan to implement the NJBPU's Order by reducing the LEAC
deferred balance without the need to reduce rates. RECO has not received any
objection to its plan.

On March 8, 1999, the Company, CEI, the staff of the New York Department of
Public Service (the "NYPSC Staff") and several other parties submitted a
settlement agreement in the Merger proceeding to the NYPSC ("Settlement
Agreement"). The Settlement Agreement provides for the approval of the Merger
Agreement subject to certain conditions, including the following: (1) On
December 1, 1999, the Company will reduce its electric base rates by $5.8
million, or 1.9%; (2) The Company will not seek to effectuate an increase in its
base electric rates prior to January 1, 2003; (3) The Company's electric
operations will no longer be subject to an earnings sharing mechanism which
currently requires sharing with electric customers equity




<PAGE>   14
returns in excess of 11.4%; (4) the Company will reduce its gas base rates by
$1.0 million, or 0.7%, effective in the month following consummation of the
Merger; and (5) The Company will withdraw its December 1998 gas rate filing upon
consummation of the Merger and may not file to increase its gas rates prior to
December 1, 1999.

On April 2 and April 14, 1999, the NYPSC issued orders authorizing the Merger
and adopting the Settlement Agreement.

The Company has also received approval to complete the Merger from the PAPUC.
The PAPUC settlement agreement, which was approved by an Administrative Law
Judge ("ALJ") and the PAPUC, allows the Company to retain all merger savings,
net of costs to achieve, until its next electric and gas rate case at which time
the treatment of net merger savings will be determined.

On May 13, 1999 the Securities and Exchange Commission issued an order
authorizing the completion of the Merger. On July 2, 1999 the Department of
Justice announced the resolution of antitrust concerns regarding the Merger.

On July 8, 1999 the Merger was completed.

NEW YORK COMPETITIVE OPPORTUNITIES PROCEEDING

Reference is made to Item 3, Legal Proceedings, under the caption "New York
Competitive Opportunities Proceeding" in the Company's Annual Report on Form
10-K for the year ended December 31, 1998 for a description of the NYPSC's
Competitive Opportunities Proceeding.

On August 13, 1998, the Company, NYPSC Staff and interested parties reached an
agreement to establish production related revenue requirements for the purposes
of unbundling the Company's electric tariffs in the revenue requirement phase of
the New York Unbundling proceeding. On September 18, 1998, a settlement
concerning the rate design and all other issues had been reached as well. The
settlements were submitted to an ALJ for review. The NYPSC approved the
settlement agreements by Order issued February 4, 1999. As a result, unbundled
rates became effective on May 1, 1999.

As provided for in the Settlement Agreement in Case 96-E-0900, the Company has
divested its generating assets. See Note 7 of Notes To Consolidated Financial
Statements in Item I, Part 1 of this report.


NEW JERSEY ENERGY MASTER PLAN

Reference is made to Item 3, Legal Proceedings, under the caption "New Jersey -
Energy Master Plan" in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998, for information regarding the NJBPU order "Adopting and
Releasing Final Report in its




<PAGE>   15
Energy Master Plan Phase II Proceeding to Investigate the Future Structure of
the Electric Power Industry (Docket No. EX 94120585Y)." The Order required RECO
and other New Jersey investor owned electric utilities each to file unbundled
rates, a stranded cost proposal and a restructuring plan.

In July 1997, RECO made such filings and hearings on RECO's unbundled rates and
stranded cost filings were held before an ALJ while hearings on the
restructuring filing were held before the NJBPU. Legislation was passed in New
Jersey on February 9, 1999 which provides the NJBPU the requisite authority to
make generation a competitive service. The legislation provides for (1) the
implementation of full retail access for all customers by August 1, 1999, and
(2) a reduction in aggregate rate levels for each customer class of at least 10%
relative to the aggregate level of bundled rates in effect as of April 30, 1997.
The NJBPU may allow the 10% reduction to be phased in over 36 months, provided
that the electric utility shall implement a reduction in rates of at least 5%
effective with the implementation of customer choice. The maximum level of
reduction must be maintained at least until the 48th month following the
starting date for implementation of full retail access. On July 13, 1999, RECO
filed a proposed Plan for Resolution of Proceedings for the Board's
consideration in full and final resolution of all issues involved in RECO's
fillings. On July 20, 1999, RECO filed a Stipulation of Settlement
("Settlement") by and among RECO and New Jersey Transit which incorporates the
Plan for Resolution of Proceedings in its entirety. As required by the
legislation, the Settlement provides for a 5% reduction in overall rates
effective August 1, 1999 and an additional 6.6% reduction effective August 1,
2002. The additional reduction of 6.6% reflects a reduction of 11.6% from
current rates and 10% from rates effective at April 30, 1997 as required by the
legislation. The Settlement also separates RECO's rates into the following
unbundled charges: a Basic Generation Service Charge/Shopping Credit
("BGS/Shopping Credit"), an Energy Cost Adjustment ("ECA"), a Market Transition
Charge ("MTC"), a Delivery Charge and a Societal Benefits Charge ("SBC")for each
class of customers served.

On July 28, 1999, the NJBPU issued a Summary Order approving the Settlement with
modifications. The rate reductions were modified to provide reductions of 5%
effective August 1, 1999, 7% effective January 1, 2001 and 11.6% effective
August 1, 2002. Moreover, the residential BGS/Shopping Credit was increased to
the fourth year level included in the Settlement with an offsetting reduction in
the residential ECA. The additional 2% reduction effective January 1, 2001 will
consist in part of an additional permanent reduction to Delivery Charges of $1
million (0.7%) and in part from the implementation of a temporary rate refund
consisting of RECO customers' pro-rata share of net divestiture proceeds.




<PAGE>   16
PENNSYLVANIA - COMPETITIVE LEGISLATION

Reference is made to Item 3, Legal Proceedings, under the caption "Pennsylvania
- Competition Legislation" in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 for a description of the "Electricity Generation
Customer Choice and Competition Act". The Company's subsidiary, Pike County
Light & Power Company ("Pike") is a Pennsylvania electric and gas utility
company.

On July 23, 1998 the PAPUC issued an Order approving the Joint Petition for
Complete Settlement of Pike's Proposed Restructuring Plan. This Joint Petition,
dated May 15, 1998, was supported by all parties in Pike's electric
restructuring proceeding and provides for full retail access for all customers
as of May 1, 1999. The settlement provides for the recovery, through a
competitive transition charge, of stranded costs relating to non-utility
generator ("NUG") contract, other postemployment benefit costs, NUG contract
buyout costs previously incurred and deferred fuel costs incurred to May 1,
1999. Pike's share of any net gains from the divestiture of the Company's
electric generating facilities will be used to offset stranded costs.
The settlement does not provide for any rate reductions.


                                YEAR 2000 UPDATE

Since 1996, the Company has been working to address Year 2000 ("Y2K") issues.
Y2K issues arise as a result of a computer programming standard that
traditionally recorded a year as two digits (e.g., 99) rather than four digits
(e.g., 1999). With the change in the century, software and embedded chip
technology that use a two-digit field to record a year may malfunction or
provide inaccurate results.

Overall responsibility for the Company's Y2K efforts resides with an Executive
Sponsorship Committee ("Committee") which includes several members of senior
management and which monitors the Company's Y2K progress and is responsible for
ensuring that appropriate plans are implemented and adequate resources are
available.

The Company has developed a Y2K Plan ("Y2K Plan")which details the actions the
Company is taking to mitigate the impact of the century change. The Company
believes that with the full implementation of its Y2K Plan, the possibility of
significant Y2K problems will be greatly reduced, if not eliminated. However,
the failure of the Company, or one or more of the Company's key suppliers or
vendors, to correct a material Y2K problem could result in the interruption of
service to customers




<PAGE>   17
or the failure of certain normal business operations. Accordingly, the Company
is unable to determine at this time whether Y2K issues will have a material
adverse effect on the Company's results of operations, liquidity or financial
condition.

In accordance with its Y2K Plan, the Company has completed an inventory and
assessment of its information technology and embedded technology and prioritized
such inventoried technology as either Mission Critical or Business Critical.
Pursuant to the definitions adopted by the Company, the malfunction of a Mission
Critical system or device could directly contribute to the interruption of
electric or gas service or could adversely affect the safety of the general
population and/or employees. Similarly, the malfunction of a Business Critical
system or device could directly contribute to the loss of a department's
capability to perform its function (e.g., customer service, accounting).
Consistent with the target date established for the energy industry, the
Company's Mission Critical systems/devices were Y2K ready as of July 1, 1999,
and its Business Critical systems/devices will be Y2K ready by October 1, 1999.

The Company has evaluated and replaced various computer applications, including
its electric and gas Energy Management Systems, Customer Information Management
System, Fixed Asset System and other core accounting and management systems.
This effort was undertaken to provide additional functionality, automated
processing, and improved access to information, as well as to address Y2K
issues. The Company's remaining computer applications and hardware have been
remedied and approximately 64% of the integrated testing has been completed as
of June 30, 1999.

As noted above, an inventory and assessment of embedded technology throughout
the Company has been completed. The assessment indicates that a relatively small
number of critical systems require further testing or remediation. These
embedded chips have been substantially remediated and the Company has met the
targeted completion dates of July 1, 1999 and will meet the October 1, 1999 for
Mission and Business Critical systems, respectively.

The Company's systems may be vulnerable to its critical suppliers should such
suppliers themselves not be Y2K ready. The Company has identified and contacted
its critical suppliers. Each such supplier has provided assurances that they are
taking appropriate steps to address Y2K issues.

The Company is working with the New York Power Pool("NYPP") and the North
American Electric Reliability Council to ensure that




<PAGE>   18
appropriate steps are being taken to address the reliability of the power grid.
The Company successfully participated in a nationwide drill designed to test
contingency communication networks on April 9, 1999 and will participate in a
second drill on September 9, 1999. The drill will simulate the partial loss of
voice and data communications between the NYPP, the Company's Energy Control
Center, power plants and critical substations and require participants to
utilize two-way radios and cellular and satellite telephones to transmit
readings which ordinarily are transmitted instantaneously via computers.

The Company has procedures in place should a system failure occur. The Company
has developed contingency plans based on the results of its testing and critical
supplier assessments and has reviewed existing emergency plans and procedures
which were modified as appropriate to address Y2K-specific issues. Contingency
plans for Mission Critical systems and suppliers were completed as of July 1,
1999, and will be completed for Business Critical systems by October 1, 1999.

The total estimated cost to execute the Company's Y2K Plan is approximately $7.5
million, of which approximately $6.5 million has been incurred through June 30,
1999. These expenditures include costs related to the replacement of certain
core accounting systems so as to provide enhanced functionality while also
addressing Y2K issues; however, such expenditures do not include costs related
to other systems that were replaced in the normal course of business for
operating reasons, even though such replacement also addressed Y2K issues. The
Company has and will continue to fund these costs from the operations of the
Company.

                              QUARTERLY COMPARISON

RESULTS OF OPERATIONS

The Company's total  consolidated  earnings per average common share outstanding
for the second quarter of 1999 were $(1.47) as compared to earnings of $0.32 for
the  second  quarter of 1998.  This  decline  is  primarily  the result of costs
associated  with the  Merger and the  divestiture  of the  Company's  generating
assets and costs  associated  with the Company's  customer  information  system,
offset by lower taxes  compared  with the same period a year ago.




<PAGE>   19
ELECTRIC AND GAS REVENUES

Electric and gas operating revenues, including fuel cost and purchased gas cost
recoveries, increased by $2.5 million during the second quarter of 1999 as
compared to the same quarter of 1998, primarily as a result of increased retail
electric and gas sales, offset by regulatory adjustments and lower sales to
other utilities.

Electric operating revenues during the current quarter were $115.4 million as
compared to $115.7 million for the second quarter of 1998, an decrease of $0.3
million.

Total sales of electric energy to retail customers during the second quarter of
1999 were 1,200,352 megawatt hours ("Mwh"), compared with 1,182,936 Mwh during
the comparable period a year ago, an increase of 1.5%. Revenues from these sales
were $116.0 million for the second quarter of 1999 compared with $110.4 million
for the same period in 1999. Sales to other utilities for the second quarter of
1999 amounted to 71,400 Mwh with revenues of $1.9 million compared to 198,585
Mwh and $4.7 million in 1998. Revenue from these sales are primarily a recovery
of costs, and under the applicable tariff regulations, have a minimal impact on
earnings.

Gas operating revenues during the second quarter of 1999 were $26.5 million
compared to $23.6 million for the second quarter of 1998, a increase of $2.9
million. This increase is primarily the result of a increase in the volume of
gas sold and the timing of fuel cost recoveries.

Sales to firm customers totaled 3,023 million cubic feet ("Mmcf"), compared with
2,878 Mmcf during the same period a year ago, an increase of 5%. Gas revenues
from firm customers were $23.1 million, compared with $20.3 million in the
second quarter of 1998. The level of revenues from gas sales in New York is
subject to a weather normalization clause that compares actual gas heating
season sales levels as measured by heating degree days to the number of
forecasted degree days used to establish gas base revenue requirements.
Interruptible gas sales were 1,178 Mmcf for the second quarter of 1999 compared
to 696 Mmcf for the same period of 1998. Revenues from interruptible customers
were $2.6 million in 1999 compared to $2.3 million in 1998.

FUEL, PURCHASED ELECTRICITY AND PURCHASED GAS COSTS

The cost of fuel used in the production of electricity and purchased electricity
costs amounted to $34.3 million for the





<PAGE>   20
second quarter of 1999 compared to $36.1 million for the second quarter of 1998,
a decrease of $1.8 million. This decrease reflects lower sales to other
utilities and lower fuel cost recoveries, offset by the change in fuel prices.

Purchased gas costs for utility operations were $15.0 million in the second
quarter of 1999 compared to $12.5 million in 1998, an increase of $2.5 million.
This increase in gas costs is attributable to the higher volume of gas purchased
for resale to satisfy the higher demand in the current period.

OTHER OPERATING AND MAINTENANCE EXPENSES

The Company's total operating and maintenance expenses excluding fuel, purchased
power and gas purchased for resale for the second quarter increased by $24.0
million compared with the same period in 1998. Utility operating expenses
increased $23.9 million of which $21.7 was attributable to the costs associated
with the Merger. Diversified operating expenses increased by $0.1 million.

The increase in utility operating expenses is the result of costs associated
with the Merger (includes employee severance, pension costs, etc.), higher
depreciation expense due to normal plant additions and the amortization of the
Company's customer accounting system, offset by a decrease in Federal income
tax.

DIVERSIFIED ACTIVITIES

The Company's diversified activities consist of energy services and land
development conducted through wholly owned non-utility subsidiaries.

Revenues from diversified activities were $543,407 for the second quarter of
1999 compared with approximately $199,000 a year ago. This increase is the
result of land sales within the current period.


OTHER INCOME, DEDUCTIONS AND INTEREST CHARGES - NET

Other income, net of interest charges and other deductions, decreased by $3.0
million during the second quarter of 1999 when compared to the same quarter of
1998 due primarily to the write-down of assets to fair market value in
diversified operations.




<PAGE>   21
                             YEAR TO DATE COMPARISON

RESULTS OF OPERATIONS

Earnings  per  average  common  share  outstanding  for the  first  half of 1999
amounted  to $(0.62)  per share as compared to $1.29 per share for the first six
months of 1998.  The  decrease in the first six months of 1999 when  compared to
the same period of 1998  primarily  reflects  various  valuations and regulatory
adjustments  related  to  the  Merger  and  the  divestiture  of  the  Company's
generating assets.


ELECTRIC AND GAS REVENUES

Electric and gas operating revenues, including fuel cost and purchased gas cost
recoveries, increased by $20.6 million in the first six months of 1999 as
compared to the same period of 1998.

Electric operating revenues during the current period were $224.3 million as
compared to $221.8 million for the first six months of 1998, an increase of $2.5
million.

Total sales of electric energy to retail customers during the first six months
of 1999 were 2,365,609 Mwh, compared to 2,312,447 Mwh during the comparable
period a year ago, an increase of 2.3%. This increase is attributable to warmer
than normal weather when compared to the same period a year ago. Revenues from
these sales during the first six months of 1999 were $222.3 as compared to
$212.0 for the same period in 1998. Sales to other utilities for the first six
months of 1999 amounted to 108,230 Mwh with revenues of $2.7 million compared to
319,563 Mwh and $8.1 million in 1998. Revenue from these sales are primarily a
recovery of costs and under the applicable tariff regulations, have a minimal
impact on earnings.

Gas operating revenues during the first six months of 1999 were $100.6 million
compared to $82.4 million for the first six months of 1998, an increase of $18.2
million. Revenues increased due to fuel cost recoveries and higher sales volumes
when compared to the same period a year ago.

Sales to firm customers during the first six months of 1999 totaled 12,484 Mmcf,
compared with 10,738 Mmcf during the same period a year ago, an increase of
16.3%. Gas revenues from firm customers were $92.3 million, compared with $74.9
million in the first six months of 1998. The level of revenues from gas sales in
New York is subject to a weather normalization clause that




<PAGE>   22
compares actual gas heating season sales levels as measured by heating degree
days to the number of forecasted degree days used to establish gas base revenue
requirements.

FUEL, PURCHASED ELECTRICITY AND PURCHASED GAS COSTS

The cost of fuel used in the production of electricity and purchased electricity
costs decreased by $1.7 million during the first six months of 1999 when
compared to the same period of 1998. This decrease reflects a decrease volume
requirements (including Sales for Resale) and the lower fuel cost recoveries,
offset by the increase in the cost of fuel and purchased power.

Purchased gas costs were $57.0 million in the first six months of 1999 compared
to $43.5 million in 1998, an increase of $13.6 million. This increase in gas
costs is attributable to a higher volume of gas purchased for resale and the
higher gas costs recoveries offset by lower price of gas purchases.

OTHER OPERATING AND MAINTENANCE EXPENSES

The Company's total operating and maintenance expenses, excluding fuel,
purchased power and gas purchased for resale for the first six months of 1999
increased by $31.7 million compared with the same period in 1998. The increase
in expenses associated with utility operating expenses amounted to $31.8
million. The change in diversified operation and maintenance expenses was a
decrease of $0.1 million.

The increase in utility operating expenses is primarily the result of costs
associated with the Merger (includes employee severance, pension costs, etc.)
which resulted in a $21.7 million of the increase. The amortization of the
Company's customer accounting system and depreciation expense also contributed
to the increase which was offset by a reduction in taxes.

DIVERSIFIED ACTIVITIES

Revenues from diversified activities increased by $259,292 for the first six
months of 1999 as compared to the same period of 1998. This increase is the
result of land sales that took place in the second quarter of 1999.

OTHER INCOME, DEDUCTIONS AND INTEREST CHARGES - NET

Other income, net of interest charges and other deductions decreased by $3.7
million during the first six months of 1999 when compared to the same period of
1998, primarily as a result of the write-down of assets to fair market value in
diversified operations and lower investment revenues.





<PAGE>   23
                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On June 25,  1999,  five  shareholders  of the Company  filed a purported  class
action on behalf of all persons  who owned the  Company's  common  stock "at the
time [the Company] and  Consolidated  Edison,  Inc.  signed a definitive  merger
agreement  under which  Consolidated  Edison will acquire all of [the Company's]
common stock." The complaint  asserts  various claims against  certain former as
well as then current  directors  and  officers of the Company and certain  other
defendants,  alleging that the actions of the defendants resulted in a reduction
in the  price  paid  by CEI for  the  Company's  stock  pursuant  to the  Merger
Agreement.  Plaintiffs filed the action, entitled Suzanne Hennessy, et al. v. D.
Louis Peoples,  et al., in the Supreme Court of the State of New York, County of
New  York.  The  plaintiffs  are  seeking  various  types of  relief,  including
compensatory  damages in the  approximate  amount of $81 million.  In connection
with  this  action,   the  defendant   officers  and  directors  have  requested
indemnification  and  advancement  of expenses from the Company  pursuant to the
provisions of the Company's  By-laws.  The Company  cannot  predict the ultimate
outcome of this proceeding.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The Company has made forward-looking statements in this Form 10-Q Quarterly
Report with respect to the financial condition, results of operations and
business of the Company in the future, which involve certain risks and
uncertainties. Forward-looking statements are included in Item I of Part I in
the Notes to Consolidated Financial Statements and in Item 2 of Part I,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, under the captions "Capital Resources and Liquidity," "Regulatory
Activities," and "Year 2000 Update" and "Quarterly Comparison." Actual results
or developments might differ materially from those included in the
forward-looking statements because of factors such as competition and industry
restructuring, changes in economic conditions, changes in laws, regulations or
regulatory policies, uncertainties relating to the ultimate outcome of the
Merger and the sale of the Company's generating assets, the outcome of certain
assumptions made in regard to Year 2000 (Y2K) issues and other uncertainties.
For all of those statements, the Company claims the protections of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.






<PAGE>   24
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a) Exhibits

     3.1.1   Certificate of Amendment of the Certificate of Incorporation of
             the Company, dated July 14, 1999.
     3.1.2   Restated Certificate of Incorporation of the Company, dated May 7,
             1996.  (Incorporated by reference to Exhibit 3.4 to the
             Quarterly Report on Form 10-Q for the quarterly period ended
             March 31, 1996 - File No. 1-4315.)
     3.2     By Laws of the Company, as amended on July 8, 1999.
     27      Financial Data Schedule

(b) Reports on Form 8-K

         On July 13, 1999, the Company filed a report on Form 8-K dated July 8,
1999 regarding the completion of the Merger and the change in the Company's
certifying accountant.










<PAGE>   25
                                   SIGNATURES

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




                                           ORANGE AND ROCKLAND UTILITIES, INC.
                                           -----------------------------------
                                                       (Registrant)





Date:      August 13, 1999                 By     ROBERT R. STELBEN
                                                  Robert P. Stelben
                                                  Vice President and Treasurer
                                                  and Duly Authorized
                                                  Officer


Date:      August 13, 1999                 By     EDWARD RASMUSSEN
                                                  Edward Rasmussen
                                                  Acting Vice President and
                                                  Controller and Chief
                                                  Accounting Officer