CORNING NATURAL GAS CORPORATION AND SUBSIDIARY

Consolidated Statements of Income

For theYears Ended September 30, 2000 and 1999

Utility Operations

2000

1999

Operating revenue:

Residential, commercial and industrial

$12,489,634

$12,668,536

Transportation

3,914,389

3,479,189

Capacity assignment

92,818

128,445

Total operating revenue

16,496,841

16,276,170

Operating expenses and taxes:

Natural gas purchased

9,574,415

9,459,613

Operating and maintenance

3,801,668

3,593,462

Taxes other than federal income taxes

1,508,090

1,570,206

Depreciation

503,248

488,631

Federal income taxes

12,077

42,835

Total operating expenses and taxes

15,399,498

15,154,747

Operating income from utility operations

1,097,343

1,121,423

Unregulated Operations

Unregulated revenue

7,807,053

6,692,216

Unregulated expenses(includes interest expense of

7,428,065

6,483,914

$177,360 for 2000 and $156,382 for 1999)

Operating income from unregulated operations

378,988

208,302

Other income (including net realized gains on

marketable securities of $30,500 and $25,375

76,483

63,353

in 2000 and 1999)

Income before interest expense

1,552,814

1,393,078

Interest expense - regulated

1,081,362

955,130

Net income

$471,452

$437,948

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Weighted average number of shares outstanding-

basic and diluted

460,000

460,000

Basic and diluted earnings per common share

$1.02

$0.95

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See accompanying notes to consolidated financial statements.